Mining is a conservative sector in which innovation occurs slowly over time, and rarely does one set out to be leading edge. There are many valid reasons for this attitude, although one must wonder if the same philosophy of conservative management of mining enterprises also applies to governance of mining companies.
Perhaps a reason for the sector not to lead in board and governance innovation is that it relies on critical, but niche, skillsets, such as mining engineers, geologists, and metallurgists, so historically the approach to governance has been limited predominately to those specialties, a comparatively small group.
Yamana Gold did not set out to be leading edge when we committed to enhancing and improving our Board of Directors. However, once we began to execute on our plans, we realized that for our Board to be better equipped to provide the necessary oversight in today’s environment and into the future required that we consider leading governance practices. We saw an opportunity in our plans to refresh our Board, a practice that should occur every once in a while, to also enhance the diversity of perspectives coming from our Directors.
As mining companies increasingly look to include Environmental, Social, and Governance (ESG) analysis in their decision making, we want to show that Yamana Gold thinks long term about what will make a mining company sustainable, a company that will excel regardless of the direction of commodity prices. Realizing that there was some truth to the stereotype that mining is a conservative, perhaps even a bit insular, industry, we determined that we should apply innovative ways of thinking to the Board governance model.
A Sustainable Philosophy
Our corporate approach starts with our philosophy. Since Yamana Gold was founded in 2003, we have aimed to maintain an entrepreneurial spirit. This means continuously looking for new ways of doing things and for new opportunities in pursuit of our mission to mine precious metals profitably and responsibly. As a company with assets in four countries doing business in four languages and selling products to a global market, our entrepreneurism and mining philosophy need to transcend geographic and cultural boundaries and resonate with our entire stakeholder group.
A Board is made up of individuals, so our philosophy recognizes that we need to establish protocols and an environment that encourages as many individual perspectives as possible, while at the same time ensuring that, collectively, the Board shares the same fundamental principles—in essence, a common language. For us, that has meant explicitly endorsing a set of values that all Directors must share, which we cultivate throughout the organization. Running a sustainable business requires individuals who can clearly demonstrate they are ethical, have integrity, and are committed to transparency. These traits are valued by our stakeholders, including communities, employees, family members, and, as a public company, shareholders.
Prisms of Experiences
With a common language well established, we recognized that each one of us sees things through the prism of our experiences, and the more diverse the experiences we draw from, the more diverse our views. We would see more and better. We are embracing diversity, particularly gender diversity. We have accelerated our progress and targeted 40 percent female representation on our Board, not as an end goal, but rather a near-term effort to reach a level of representation that more closely represents our society. We have nearly reached our goal. By broadening our pool of expertise and talents, we have put together a collection of Board members who exercise decision-making power with the benefit of a broader range of experiences and insights. We are affirming the value in having a diversity of perspectives. We have distinguished between people being equal and being treated equally and focused on the different contributions that would be made because of the prisms of our experiences.
We want the highest quality directors. The four female Directors we have appointed since 2014 have incredible skills and experience, and their individual achievements speak volumes about their caliber and expertise. These directors all come from a variety of backgrounds outside the mining industry and, with experience in finance, oil and gas, and power utilities, they bring fresh perspectives that enhance the quality of the conversation we have and challenge conventional thinking in our industry.
Emeritus Directors Ensure Continuity
That does not mean there is no room for conventional thinking or wisdom. On the contrary, we also realized the value in ensuring new additions to our Board are able to learn from those who were here when prior decisions were made. We saw an opportunity when we began our refreshment program to ensure that we broaden the diversity of perspectives while not losing the institutional knowledge and perspectives of our existing Directors.
In 2017, we established an emeritus position for retiring Directors. Two Directors announced plans to step down from the Board this year, and we looked at what is the best way to have continuity and not lose their respective corporate, mining, governance, and Yamana-specific legacy experience.
We strive for predictable and reliable operations from our mines, and we realized a similar commitment to a stable, evolutionary process is appropriate for our Board refreshment program. Recognizing this, the emeritus role is a non-voting role with a mandate to mentor new directors and to support reviews and other company matters. Our new Directors are now able to bring their fresh perspectives to bear while also understanding what brought us to where we are.
This brings us full circle, back to our values. Our retiring Directors and their desire to stay on in the emeritus role show another set of characteristics we value: passion and commitment. Boards need to be passionate about the company they are overseeing, and that includes a commitment to the long-term success of the business.
Speaking the Same Language
Earlier this year, we created a compilation of views provided by our Directors on governance. Directors were interviewed individually, and Yamana Gold created a compilation from the recorded interviews. This was not rehearsed or scripted. The compilation recording was then posted on our website. We wanted each Director to speak for themselves and, through that, demonstrate the diversity of perspectives we are cultivating while also showing we all speak a similar language. We welcome you to visit our website to hear directly from our Directors and see their passion as they discuss what it takes to be on the Board of a mining company.
Governance may not be at the forefront of everyone’s mind when we think about innovation, but the value of fresh thinking is increasingly apparent at our Board meetings, and investors will see the benefits of this as companies with better practices are able to run more sustainable businesses in the long term.
About the Expert:
Peter Marrone founded Yamana Gold in July 2003 and serves as Chairman and Chief Executive Officer of the company. Since Yamana was founded, it has become a major gold and silver producer from mines in the Americas. Mr. Marrone has more than 30 years of mining, business, and capital markets experience and has been on the boards of a number of public companies and advised companies with a strong South American presence. Prior to Yamana, Mr. Marrone was the head of investment banking at a major Canadian investment bank and, before that, practiced corporate law in Toronto with a strong focus on corporate law, securities law, and international transactions.