Board game on to rescue MinRes as Super fund HESTA airs concerns about Chris Ellison’s long goodbye

Headhunters are sounding out Perth directors about taking the helm of Mineral Resources as pressure grows on the beleaguered company’s board to take tougher action over chief executive Chris Ellison’s misconduct. It is understood that two recruitment firms have been calling potential candidates for the chair role and putting together lists in preparation for bidding for the search mandate. Touted names from Perth’s small pool of directors include former Fortescue boss Nev Power, Wesfarmers chair Michael Chaney, Fortescue deputy chair Mark Barnaba and Crown Perth chair John Van Der Wielen. MinRes’ chair of nearly 10 years, James McClements, has pledged to step down within a year as part of the widening fallout from Mr Ellison’s tax evasion and his related-party dealings with the mining and services group he founded. However, given corporate precedence, it would not be a surprise if the investment banker called it quits by early next year, handing the reins to a replacement who would likely take a harder line on MinRes’ “orderly” transition of Mr Ellison out of its executive ranks. The pending search for a chair will run simultaneously alongside another for a new chief executive by global executive recruitment firm Spencer Stuart, which is said to have been working on succession planning at MinRes for some time. The miner revealed on Monday that Mr Ellison, pictured below, would stand down within the next 12 to 18 months after it released damning findings of a long-running probe that discovered “at times Mr Ellison has not acted with integrity” and that he “failed to be as forthcoming with the board as he should have been”. The board’s investigation was launched late last year over a secret deal that Mr Ellison struck with the Australian Taxation Office after voluntarily disclosing a scheme involving equipment sales through a British Virgin Islands company. But despite support for Mr Ellison staying on from several major shareholders, other investors want him to go earlier. Superannuation giant HESTA on Friday placed MinRes on a governance watch list, saying it “remain(s) disappointed with the company’s response to date”. “Our concerns include that the managing director’s succession timeframe does not reflect the seriousness of the issues and that the issues identified indicate a systemic failure of governance at the senior management and board level,” chief executive Debby Blakey said. “As a result, HESTA has placed MinRes on our watchlist, and subject to our engagement escalation framework. Watchlist companies are the focus of closer direct engagement and monitoring. “Our engagement escalation framework also considers voting against director elections, supporting or filing of shareholder resolutions, and consideration of divestment where HESTA considers there is inadequate evidence of progress to address risks and it is in members’ best financial interests.” HESTA, which has 0.9 per cent of MinRes, also has Woodside and Santos on its watchlist. The super fund’s comments come just days after powerful proxy adviser CGI Glass Lewis called for long-time members of MinRes’ board to be more accountable for Mr Ellison’s tax dodging. The US-based firm also wants the board to name others who may have benefited from co-owned offshore companies that allegedly profited on equipment sold to MinRes. AustralianSuper and the Future Fund have also been critical of the board’s response. While the CEO search is the priority, the next chair will be crucial in driving change and restoring investor confidence by fixing corporate governance and likely overseeing the appointment of Mr Ellison’s successor. In Perth, “there’s probably only half a dozen (directors) who investors would trust to have the steely strength to sort through this” at MinRes, one business observer said on Friday. Mr Power, whose name has also been linked to the chief executive role at MinRes, navigated Fortescue through a debt crisis that nearly sent it to the brink of collapse, before guiding the group on a relentless efficiency drive that turned the miner around. “He’s worked with Forrest — another strong founder — he knows operations and costs, and he’s as hard as nails,” said one businessperson who has worked with Mr Power. Mr Chaney, pictured, is seen as a firm hand at the tiller, but his age and busy chairmanships at Wesfarmers and Northern Star Resources would likely rule him out. Mr Barnaba also has a busy card, what with his Fortescue role and chairing Greatland Gold and data centre company Airtrunk. Mr Van Der Wielen has built a portfolio of directorships since stepping down as HBF boss two years ago. MinRes’ share price is yet to stage a meaningful rebound from a market collapse triggered by media reports of the tax avoidance scandal, which Mr Ellison called “a poor decision and a serious lapse of judgment”. The company’s market value has plunged from $9 billion to just over $7.2b in under two weeks.