Editorial: Anglo CEO presses ‘eject’ button

Late October was notable for the sudden and unexpected resignation of Cynthia Carroll as CEO of London-based mega-miner Anglo American, widely seen as a giving in to strong shareholder pressure to step down. It brings to an end this particular chapter in the rise of the highest-achieving woman so far in mining’s corporate big leagues.

An American, Carroll, now 55, obtained a B.Sc. and M.Sc. in geology in the U.S. before earning an M.B.A. in 1989 from Harvard University. From there, she joined Alcan’s head office in Montreal, working her way up to president and CEO of Alcan Primary Metal Group, where she made a name for herself by modernizing, growing and globalizing the group’s profitable activities.

In March 2007, she became the first-ever female CEO of Anglo American — the epitome of an old-school, old-world, global mining behemoth that was riding high at the time thanks to buoyant commodity prices. In an industry that in some cases within living memory didn’t even allow women underground, it showed that a talented and driven woman could reach the peak of corporate life.

The good times didn’t last too long, though, as the 2008–2009 recession forced Anglo into retrenchment mode, culminating in the board’s decision in early 2009 to axe 10% of the company’s workforce.

That same year, Forbes magazine had ranked Carroll as the world’s fourth most powerful woman, though by 2012 she’d slipped to No. 55 (German Chancellor Angela Merkel regularly tops the list).

Within Anglo’s corporate history, she may be remembered foremost for making Anglo put greater emphasis on miner safety and improved labour and political relations, especially in southern Africa. Going forward, her absence will perhaps be most felt as Anglo grapples with the current labour turmoil in South Africa’s platinum fields.

Carroll had been criticized from all sides during her reign, with some arguing that she’d pushed too hard and too fast to modernize a company set in its outdated ways, while others lamented the lack of bold M&A moves seen in its three main competitors: Rio Tinto, BHP Billiton and Vale.

In terms of share and earnings performance, Anglo during her tenure comes in around the middle of the pack. Shares have declined by a third during her watch, and perhaps most grating of all in the world’s financial centres, she suspended Anglo’s dividend for the first time in the company’s 95-year history.

On this side of the Atlantic, Carroll’s profile was tinged with at times overly personal criticism from North American environmental activists owing to Anglo’s joint-venture participation in the controversial Pebble copper-gold project in Alaska, something Anglo signed onto in the first few months of her CEOship.

There were of course much bigger deals than that on her watch, the most notable being the relatively smooth and full absorption of De Beers into the Anglo fold.

The old saying “the bigger they come, the harder they fall” could easily have “the slower they fall” as an addendum, judging by the slow demise of some of the world’s largest investment banks.

This week it was UBS, that tarnished former symbol of Swiss banking excellence and prudence, which announced it would fire another 10,000 employees and wind down its massive fixed income business as it focuses on wealth management and small investment banking.

UBS racked up US$50 billion in mortgage losses in 2007–2008 and took a Swiss government bailout in 2008. Adding to the tragicomedy, UBS suffered a US$2.3-billion loss in 2011 owing to the machinations of London trader Kweku Adoboli, who is on trial for fraud.

The latest cuts will bring UBS’s staffing down to 54,000, from 83,500 in 2007. (A bitter joke among employees over the years is that UBS stands for “U’ve been sacked.”)

Plus, like so many of its competitors, UBS is tied up in the slowly unfolding Libor-rigging scandal, which promises to curtail banking profits for years to come, as banks stop scamming customers and face a wall of lawsuits that will crawl through courts in a multitude of jurisdictions.