Having forecast that a failure to secure the $6bn takeover of Yamana Gold would not be a reason to quit Gold Fields, CEO Chris Griffith did exactly that. Five weeks after accepting defeat to rival companies for Yamana, Griffith "jumped out of a window", proverbially speaking. But was it defenestration?
Probably, it was. Analysts have submitted a number of theories for Griffith going quietly, but they all swim upstream of his formidable track record. Ever since becoming a CEO in 2008 at Kumba Iron Ore, Griffith has been a guy for the hard yards. He turned Anglo’s miner around and managed a huge restructuring at his next post, Anglo’s 80%-owned Anglo American Platinum.
Force of personality was required for both jobs and no little amount of conflict management. In 2013 Griffith clashed with then mines minister Susan Shabangu, who accused him of arrogance and threatened to remove Amplats’s mining licence. A year later, Griffith crossed swords with unions over executive pay. And less than 12 months in at Gold Fields, he launched a huge step-out in strategy by announcing the Yamana offer — a transaction that was to have vaulted Gold Fields into the top three of world gold producers by volume.
However, Gold Fields’ strategy wasn’t tethered, as Griffith had been by Anglo American, the parent company of Kumba and Amplats. The Gold Fields board also appeared more pliable than Anglo would have been. Griffith landed his growth strategy for Gold Fields a mere six months into the job. A stronger board may have objected to the haste.
Gold Fields chair Yunus Suleman tried to paint Griffith as the self-appointed sacrificial lamb
While the new strategy seemed acceptable to the board, it proved too much for others. Just over a month before the group’s offer for Yamana was to close, Gold Fields' lead executives for strategy, legal, and corporate affairs announced plans to resign. Combined, that accounts for about two-thirds of the firm’s nerve centre — a hollowing-out of core competence that may have threatened to snowball. In vowing to press on regardless, Griffith risked losing the company entirely. This, if anything, seems a more likely reason for his departure than some cooked-up notion that he should bear responsibility for the Yamana failure.
Yet Gold Fields chair Yunus Suleman tried to paint Griffith as the self-appointed sacrificial lamb. “We agreed the Yamana setback should not be allowed to impede the company’s strategy so, as CEO, Chris felt he should take responsibility and allow the company to move forward under new leadership unencumbered by the Yamana transaction,” he said on December 13. That’s not what Griffith was saying. “The board has given its complete support to our strategy of increasing Gold Fields’ portfolio quality,” he said a month earlier.
In any event, Gold Fields is now at an unwanted turning point with Griffith leaving immediately, ceding his 12-month notice period. In steps Martin Preece, GM of the firm’s South Deep mine, who will be interim CEO until a replacement is found — a process that Suleman said could take up to nine months. The vacuum in senior skills from April adds “another layer of strategic uncertainty at the firm,” say analysts for RMB Morgan Stanley.
Preece is a solid operator, credited with helping to extract strong performance from South Deep, but he remains a relative unknown as a CEO, especially among offshore investors. Important issues lie before him in 2023. These include the commissioning of the firm’s Salares Norte mine in Chile, where inflation threatens to push capital expenditure far beyond the initial $840m guidance.
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