The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
The unusual new management structure at Barrick Gold Corp. signals two things – that John Thornton is now clearly in command of the world’s largest gold miner, and that more changes lie ahead.
The company announced Wednesday that president and CEO Jamie Sokalsky will be resigning in September, after only two years in the post. He was a favourite of company founder Peter Munk and his departure suggests that Mr. Thornton, who was named chairman only three months ago, is eager to put his own stamp on the company.
The question is precisely what form that stamp will take. One possibility is that Barrick will attempt to reopen merger talks with Newmont Mining Corp. of Colorado. Discussions between the two mining giants blew up in April, with both sides slinging accusations at each other.
Another possibility is that Barrick will strike a deal in China, a country where Mr. Thornton has extensive contacts from his days as chairman of Goldman Sachs Asia and as a business professor at Tsinghua University in Beijing.
A move in either direction would cheer Barrick investors, who have seen the company’s share price cut in half over the past couple of years as gold prices tumbled and heavy debts weighed on the miner’s bottom line.
During those tough years, Mr. Sokalsky earned applause for slashing operating costs, selling marginal mines and trimming debt. But his skill as a financial Mr. Fix-It doesn’t seem to fit into Barrick’s new vision.
In a surprising move, the company did not name a new CEO to replace Mr. Sokalsky and instead appointed two executives as co-presidents. Mr. Thornton appears likely to take over many of the CEO’s duties himself, particularly in setting the strategic direction of the company, although he was quick to deny on Wednesday that his role had changed or that he harboured any ambitions to be CEO.
The company said that Kelvin Dushnisky and Jim Gowans, the new co-presidents, will “have overall responsibility for execution of the company’s strategic priorities and operating plans.” Missing from that description was any mention of a role for either executive in setting the strategy they will be implementing.
For the rest of this column, click here: http://www.theglobeandmail.com/report-on-business/rob-commentary/rob-insight/barrick-shakeup-signals-more-changes-ahead/article19641724/#dashboard/follows/