Mineral Resources: A savage rebuke, so why is the board giving Chris Ellison time to walk?
Mineral Resources’ board has gone the semi-nuclear option.
Chair James McClements and his fellow directors could have tried to squib it on Chris Ellison, the tough-talking founder chief executive seen as the beating heart of the mining and services company.
They haven’t, he’s been booted.
Sign up to The Nightly's newsletters.
Get the first look at the digital newspaper, curated daily stories and breaking headlines delivered to your inbox.
By continuing you agree to our Terms and Privacy Policy.But some shareholders will still question the board’s “orderly transition” that will see Ellison retain the helm for up to another 18 months, despite the company’s extraordinary public condemnation of his behaviour.
There’s no shortage of ASX200 boards who talk a big game about ethics, integrity and culture until the time comes to make hard calls on people. Dragging out management exits just means it takes longer to get into clean air.
Mineral Resources was late to rein in Ellison, but when confronted with the extent of his related-party dealings, this group of directors — five of the nine have been appointed since 2021 — have rightly ruled his position is untenable.
The board’s litany of concerns with their chief executive’s behaviour makes for a statement that is damning as any issued in recent memory by a major Australian company.
Its external probe found Ellison sometimes ran the listed company as a personal fiefdom — using employees to work on his boat and properties, and manage his affairs — didn’t always declare his conflicts of interest and kept the board in the dark.
The public denunciation was savage.
Ellison, the clearly angry board said, “has not acted with integrity”.
McClements and Co tried to minimise the share price hit to shareholders from Ellison’s exit by suggesting he would have been gone in the next couple of years anyway as part of a planned handover.
Pull the other one, it has bells.
As it is now, McClements has fallen on his sword and will step down before next year’s annual meeting and Ellison will be succeeded by a new chief executive within 12 to 18 months as part of the “orderly” transition.
That timeline appears extremely ambitious and will be questioned by shareholders and proxy advisers.
