Barrick Gold Corp. announced the details of a major boardroom overhaul, as founder Peter Munk and two other long-standing directors set plans to step down, and the company appointed a new chief operating officer in one of the biggest shakeups in its 30-year history.
Bowing to shareholder demands for new independent directors, Barrick's board nominated Ned Goodman, the chief executive officer of Dundee Corp.; Nancy Lockhart, a senior manager at a property development firm; David Naylor, a former University of Toronto president; and Ernie Thrasher, a mining executive, to serve as directors. The company also appointed former De Beers Canada Inc. CEO Jim Gowans as its new chief operating officer.
The new directors will replace Howard Beck, who has been with the company since its inception, and former Canadian prime minister Brian Mulroney, who joined the board in 1993.
Mr. Munk, Mr. Beck and Mr. Mulroney will step down at the company's annual meeting next spring, when Mr. Munk will hand over the chairmanship to former Goldman Sachs Group Inc. president and Barrick co-chairman John Thornton.
If shareholders approve the nominees, Barrick's board will expand to 14 members, with 10 independent directors. Currently seven of the 13 board members are independent.
"I think that will be very well received by shareholders," Mr. Thornton told reporters after Barrick made the announcement.
Like other mining companies, Barrick has been under pressure to improve operations after the price of gold plummeted nearly 35 per cent to about $1,250 (U.S.) an ounce from the highs of $1,900 reached in 2011. The company faced additional pressure to revamp its board, which has been accused of not exercising enough independence from Mr. Munk.
Some of Barrick's institutional shareholders had agitated for new blood in the boardroom and changes to the company's executive compensation plans.
They voted against the board's decision to award Mr. Thornton with a $11.9-million signing bonus.
"We're encouraged by the steps the company seems to be taking to enhance the role of independent directors. We look forward to meeting with the company to better understand these and the further steps they will be taking to improve the governance of the company," said Maxime Changnon, a spokesman for the Quebec pension fund, the Caisse de dépôt et placement du Québec.
Barrick's stock has lost half of its value since this time last year. On Wednesday, it closed at $16.72 on the Toronto Stock Exchange.
Mr. Thornton joined Barrick in 2011, and served on its international advisory board before being appointed to the main board of directors in 2012. The former banker became co-chairman when Barrick ousted its chief executive officer, Aaron Regent, and replaced him with chief financial officer Jamie Sokalsky in June, 2012.
A sometimes cheerful and sometimes melancholic Mr. Munk told reporters that Barrick was everything to him, but that he was leaving his company in good hands with Mr. Thornton, Mr. Sokalsky and the rest of Barrick's management team.
Mr. Thornton said he was interested in diversifying Barrick beyond gold and copper, but said first the company had to get its house in order.
Wednesday's announcement comes after Barrick has taken multiple steps to rein in costs, including revamping mines with production costs of more than $1,100 an ounce, halting work at its Pascua Lama gold mine in South America, and raising $3-billion in equity to pay down its debt.
Mr. Gowans has more than 40 years of experience in the mining industry, including as executive vice-president of Placer Dome's Canadian operations and as a senior manager at a number of Canadian base-metal companies.
Mr. Gowans will start Jan. 20, 2014, and will replace Mark Fisher, the company's regional director of copper, who became acting chief operating officer after Barrick's chief operating officer Gary Halverson resigned in October.