An internal review at Eurasian Natural Resources Corp, launched after of a corporate governance debacle that saw two directors ousted at the mining company’s annual meeting, has left the management and board almost unchanged.
Johannes Sittard, chairman and former chief executive, remains chairman. Felix Vulis, who resigned in February citing commitments in his family life, has been restored as permanent chief executive.
The three-month review of corporate governance at the embattled FTSE 100 company, which has lost almost half its stock market valuation in 2011, includes the board appointment of Terence Wilkinson, a former chief executive of Aim-quoted Ridge Mining and Lonrho.
The review, which concluded on Wednesday night, focused on whether the board of ENRC, a company that is largely controlled by three central Asian entrepreneurs with no board seats, should remain fully independent of the three men or become a more actively family-controlled miner akin to Vedanta, Fresnillo, and Antofagasta.
The elevation of Alexander Mashkevich, one of the company’s three founders and major shareholders, to the chairmanship would have signalled ENRC’s shift to a less independent company. Mr Mashkevich has been campaigning for the chairmanship, but after Wednesday’s board meeting he agreed to remain off the board, according to a person close to the company.
Mr Sittard and Mr Vulis are both employees of the founding shareholders from before ENRC’s 2007 flotation.
“We are committed to a strong and independent board,” Mr Sittard said in a statement.
The company made minor changes in the boardroom. Mehmet Dalman, an investment banker and ENRC board member, becomes senior independent director. He replaces Sir Richard Sykes, who was ejected in June when the three founding shareholders voted against the re-election of Sir Richard and Ken Olisa, a fellow board member at the time.
Mr Wilkinson’s appointment to the board takes the total number of independent non-executives in the 11-strong board from five to six. Two non-independent directors resigned in June alongside Sir Richard and Mr Olisa.
Mr Dalman said ENRC’s problems were not about boardroom rules. “It was never about corporate governance; it was about personalities and power vacuums,” he said. “We have had teething problems and what we need is a cohesive board pulling in one direction.”
One analyst, who asked not to be named, said the review left “question marks” over the company’s corporate governance.
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