MinRes walks back Ellison exit plan

[Ben Graham]

Mineral Resources (ASX: MIN) founder and managing director Chris Ellison will remain in his role indefinitely after the company scrapped a previously announced succession plan.

A year ago, it was announced that Ellison would step down by mid-2026 after an investigation found he misused company funds and evaded taxes.

Addressing shareholders for the first time in Perth on Thursday since being appointed as chairman in May, Malcolm Bundey said the board had reviewed the status of the succession plan.

“While the former board had announced a target date for succession, the support program for this was outdated and, in our view, could not confidently deliver the intended outcomes of a smooth transition without creating unnecessary risk for the company and its shareholders,” he told the company’s annual general meeting.

“Chris and I are fully aligned that this leadership transition must be a rigorous, well managed process rather than an ‘event’, which it had become.”

Bundey said finding the right person to lead a founder-led business like MinRes was complicated and described it as a “change-management process rather than a standard search and selection”.

Recruitment firm Korn Ferry and human relations consultancy Xperience have been appointed to help MinRes design and implement a three-stage leadership succession program.

The first stage is implementing a structure that supports a more traditional CEO-led approach, followed by the establishment of robust executive leadership team operating practices.

The third stage is identifying internal candidates alongside an external process.

“By undertaking this transition in a considered and methodical way, we will ensure the company, its people and our shareholders get a lasting, high-quality outcome, rather than rushing to meet an arbitrary deadline,” Bundey said.

“We will measure success by putting in place the right leader, the right organisational structure and the right foundations for MinRes to thrive long after the transition. The success of this transition will be Chris’ legacy and he is committed to it.”

‘Ignore the noise’

More than a year after the scandal broke, Ellison and MinRes have remained in the headlines for the wrong reasons.

Last week, it was reported that the Australian Tax Office was looking into Ellison’s affairs.

Speaking to shareholders on Thursday, Ellison remained defiant.

“There’s no doubt the last 12 months have been incredibly tough – tough on the business, tough on me personally,” he said.

“Very early in the piece, I decided to do what I do best. I’ll ignore all of the remarks that are coming at us. You can’t fight that.

“All I’ll do is make sure we continue to run the businesses we have for the last 30 years, and we’ll continue to do what we do good and that’s deliver to our shareholders.

“That’s our focus going forward, and that’s never going to change, no matter what happens.”

MinRes is currently focused on ramping up its Onslow Iron project in the Pilbara and reducing debt.

Last week, the company announced the US$765 million sale of 30% of its lithium business to POSCO Holdings.

Ellison briefly addressed succession planning.

“I’m not getting any younger, and it’s nothing that’s really accelerated by the newspaper, just time for me to make sure that we’ve got someone else stepping into the breach that can continue this forward,” he said.

“We’ve got a great management team in the business, and we’re going to make sure that this thing’s around in 40 or 50 years’ time.

“We’ll ignore the noise. It’ll eventually go away.”

Board renewal

Bundey was named as former chairman James McClements’ replacement in May.

He told shareholders his top priority was raising governance standards and the company has undergone a complete board refresh this year.

Susie Corlett and Jacqueline McGill resigned in early April and were followed out the door by Denise McComish a few weeks later, and Justin Langer in August. Zimi Meka stepped down at the conclusion of the AGM.

In July, the company appointed former Origin Energy (ASX: ORG) chief financial officer Lawrie Tremaine and former Macmahon Holdings (ASX: MAH) CEO Ross Carroll as independent directors and last month, appointed former National Australia Bank (ASX: NAB) people and culture lead Susan Ferrier and Ramelius Resources (ASX: RMS) director Colin Moorhead as independent directors. All four, as well as Bundey, were formally elected to the board during the meeting.

Bundey said it was his aim to build a “blue-chip, blue-collar” board.

“Today, I am pleased to say we have established a strong, independent and well-balanced board,” he said.

“This is a board focused on transparency, accountability and maintaining a collegiate, success driven culture in the boardroom.”

To further boost governance, the company appointed Kate Barker to the newly created role of director of governance and compliance, reporting directly to Bundey, and appointed Sarah Standish as company secretary and Nick Rohr as director, legal and commercial.

Despite the scandals plaguing the company, shareholders overwhelmingly voted in favour of multimillion-dollar incentive packages for Bundey and Ellison.

MinRes shares fell to a five-year low in April, but have strongly rebounded since, reaching a one-year high of A$52.69 this month.