Robert Yalden is the Stephen Sigurdson Professor in Corporate Law and Finance at Queen’s University and previously a senior partner at Osler, Hoskin & Harcourt LLP, where he served as co-chair of its M&A Group.
The year 2019 has barely begun, yet some have already started wringing their hands in public about the fate of corporate Canada. This time, the focus is a set of changes that are unfolding at Barrick Gold Corporation, a Canadian company that the legendary Peter Munk built into one of the world’s largest gold-mining businesses.
The changes include Barrick’s decision to acquire Randgold Resources Ltd., announced in September, 2018, and completed on Jan. 1, 2019, after receiving shareholder and regulatory approvals. The transaction forms part of Barrick’s plan to refocus its business and implement other related initiatives that have now suddenly caught people’s attention: revamping Barrick’s board of directors, so that instead of having several resident Canadian directors, it will have only one with Canadian roots; and reducing the number of positions in Barrick’s Toronto head office from the 150 or so that were there in September to approximately 65 to 70.
Pierre Lassonde, chair of the board of Franco-Nevada Corp., was quoted in The Globe and Mail on Jan. 4 as saying that he thought Mr. Munk, Barrick’s founder, “is going to roll over in his grave 10 times.”
Mr Lassonde went on to observe: “Don’t tell me in the Canadian mining industry there’s not great people to run a company like Barrick.” A day later, The Globe’s Eric Reguly bemoaned Barrick’s fate, suggesting that it may eventually take further steps to disconnect from Canada.
Public hand-wringing of this kind is rarely productive unless it ultimately leads to some clear-eyed analysis of the public-policy issues at play. In this case, we are not off to a good start. Allusions are being made to the fate of companies such as Inco, Falconbridge and Alcan and to the spectre of a hollowed-out mining sector in Canada, all of which risks overshadowing questions that warrant careful analysis.
For the rest of this article: https://www.theglobeandmail.com/business/commentary/article-what-lessons-does-barrick-golds-fate-really-teach-us/