‘There’s no one around to replace him’: Hunt on for new Mineral Resources chief after Chris Ellison exits

Just like Tesla has become synonymous with Elon Musk, finding someone to step into the shoes of the man who built Mineral Resources from scratch will be a difficult task, according to a leading business expert.

UWA’s Raymond da Silva Rosa spoke to The West Australian after bombshell revelations on Monday that Mineral Resources founder Chris Ellison had used company resources for his personal benefit, as well as a litany of other governance breaches, and would step down as managing director within 18 months.

The finance professor said it was a question of “what next” for the mining business, with major shareholders seemingly divided over what a Mineral Resources without Mr Ellison at the helm looks like.

“The main issue here seems to be a dilemma of the modern kind of economy, whereby ... there are certain people with a particular vision and a drive and a plan who can take a company and build it up from scratch,” Mr da Silva Rosa said.

“The paradigm example here is Elon Musk ... because they have skills that are almost unique or certainly very hard to replicate or find somewhere else, the company becomes beholden to them.”

US billionaire Mr Musk joined as Tesla’s biggest shareholder in 2004 and was made CEO in 2008, and has since led the company to become one of the largest by market capitalisation on the planet.

“They’re given a lot more leeway, simply because they are, in some real sense ... economically indispensable (to) the company. “No one’s in doubt about the seriousness of what’s gone on. But then the question is, what do we do next?”

In its statement to the market on Monday MinRes said it had been working with US recruitment firm Spencer Stuart “for some time” to “identify a suitably qualified successor to Mr Ellison”.

“That process will be accelerated so that it can be completed within the next 12-18 months,” it read.

“The Board and Mr Ellison consider that diversifying governance and management will generate long-term value for shareholders.”

Mr da Silva Rosa said the fall in MinRes’ share price following the news of Mr Ellison’s departure could either be read as a response to revelations of unethical behaviour by its managing director, or a response to the fact his is leaving.

The stock was down 9.6 per cent to $36.70 by market close.

“A key driver of the wealth of the company is leaving, and there’s no one around to replace him,” he said.

The professor also said the complex structure of MinRes, which comprises mining services, lithium and iron ore, would also need to be considered in finding a replacement.

“The range of contacts, Mr Ellison’s understanding of the market in WA is probably without parallel. There might be a few other people in, BHP and maybe Fortescue who share this, but not many people do, so finding a replacement for him would be difficult.”

The board will also need to consider whether they hire internally or externally. Some investors might want to see an outsider step in, the professor said.

“If an investor’s main concern is ESG ... then there’s no doubt that kind of investor would be hoping that Mineral Resources would go external and have a have a clean out.”

The saga also highlighted the importance of having a good succession plan, according to Mr da Silva Rosa.

“It speaks more to the fact that this is really, in some senses, a one-person company, and maybe that’s the broader context for this.

“Maybe that was the bigger failure in, in a way, not having an orderly succession plan.”

MinRes chair James McClements will also exit the business and is due to step down before the company’s annual general meeting in 2025.