Business Maverick
Chris Griffith falls on his sword, quits as Gold Fields’ CEO over failed Yamana transaction
Chris Griffith is taking the fall for the company’s failure to execute its proposed all-share, $6.7-billion acquisition of Canadian mining company Yamana Gold. The company said on Tuesday that Griffith had taken responsibility for the failure and offered to step down.
Unlike in ANC circles, some South African corporate executives actually hold themselves accountable for their actions and strategies. And so Griffith, a highly rated mining executive who has also been at the helm as CEO of Anglo American’s South African iron ore and platinum units, decided to step down as Gold Fields’ CEO after the unraveling of the Yamana deal.
“The Board and I agree that the company’s strategy, including growing the value and quality of the portfolio, continues to be the right one, but we also felt that the Yamana setback should not be allowed to impede the company’s strategy. So, as CEO I felt that I should take responsibility and allow the company to move forward under new leadership unencumbered by the Yamana transaction,” Griffith said in a statement.
Martin Preece, who runs Gold Fields’ South African operations — effectively its last productive asset here, the South Deep mine in western Gauteng — will take over from the New Year as interim CEO while the board searches for Griffiths’ replacement.
On a conference call with journalists, Gold Fields Chairperson Yunus Suleman said that could take up to nine to 12 months. In response to questions, he also said there was no falling out between the board and Griffith and that he had approached the board last month to depart over Yamana.
The proposed Yamana deal looked good on paper and was in line with Gold Fields’ strategy to lift its production profile, which is now global, with fresh new assets. But it was greeted with scepticism by major shareholders, underlining the point that current valuations have perhaps made 2022 not the best year to pursue major mining deals.
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Then along came Agnico Eagle and Pan American in November with an unsolicited $4.8-billion bid, which included $1-billion in cold hard cash. Yamana declared the bid “superior” to Gold Fields’ and gave it five business days to sweeten its offer, but the company would not be drawn into a bidding war — a decision that Suleman said had full board approval.
Griffith assumed the top job at Gold Fields in April of 2021 after Nick Holland retired, and he certainly seemed a natural fit. Both Gold Fields and Griffith’s previous company Anglo American Platinum (Amplats) had embarked on mechanisation and automation drives to improve safety while boosting productivity and profits.
https://www.dailymaverick.co.za/article/2021-01-24-safety-first-gold-fields-a-natural-destination-for-new-ceo-chris-griffith/
In hindsight, it appears that Griffith may have been overeager to secure a big deal but to his credit, he has fallen on his sword over the botched bid for Yamana. One can hardly imagine an ANC cabinet minister, most of whom preside over failing ministries, taking such responsibility. One suspects that Griffith, with his highly technical cast of mind and track record — he set Amplats on the road to record profits — will not be unemployed for long. A keen angler, he now has a bit of time to throw a fly line while he also casts around for a new job.
Meanwhile, Gold Fields is in the capable hands of Preece, who has overseen a turnaround in the fortunes at South Deep, where a tough geology 3 kms underground thwarted past efforts to bring the mechanised operation to profit. An interim CEO is unlikely to pursue a big global deal but in the wake of the Yamana saga, Gold Fields is unlikely to be in a hurry to propose another one anytime soon. DM/BM
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Oh my, how outdated. The CEO as hero myth is surely long overdue for burial? If the company does well, the CEO gets all the credit. If the company does poorly, the CEO gets all the blame. Sounds a lot like politics, doesn’t it.
We all know that companies are made up of teams of people, and that a project of this size and the analysis that went into the decision was the work of many people. So if you want a ritual sacrifice, all of them must go.
Futhermore, they should think about the message they send to the markets about their company culture: “We punish people who try to innovate or grow the company if they fail”. It ignores the fact that no growth or innovation comes without failure – trying stuff out to see what happens is the essential definition of innovation. I would be careful about putting my money into a company that picks one scapegoat and punishes them for their failure, as I would not be convinced that they have what it takes to survive in the VUCA world that is the new normal (VUCA = volatile, uncertain, chaotic, ambiguous).
Maybe we should read an article about whether we can afford to lose talented leaders with experience at this point in our country’s story?
In my experience of Griffith the flip side to his charm and ability is his propensity to bully. He bullied and bungled his way through a miners strike a couple of years ago and garnered some very bad press. Odd that he didn’t (golden) parachute his way out then.
I understand the sentiment Christo, but in most cases it is not the heroes who lose out when companies fail, it is the retrenched employees. So speaking of ‘outdated’ – isn’t it about time that employees are cast as assets rather costs/liabilities on corporate balance sheets.
Good to see that old fashioned chivalry is not dead. I wish Mr Griffith well…I don’t know him personally but his reputation as a reliable straight shooter who can be trusted should never be underestimated, especially in these uncertain times. Wish there were more like him in this country!