ACSI demands answers on sudden departure of Mineral Resources ethics and governance directors

Mineral Resources’ board has been plunged into turmoil with the abrupt departure of two independent directors charged with lifting the battling company’s governance standards after a series of scandals. The immediate resignations of Jacqueline McGill and Susie Corlett as non-executive directors of MinRes were announced on Wednesday, dealing another blow to the mining and services group’s credibility. The suddenness of the departures, which wiped another 7 per cent from MinRes hemorrhaging shares, raised questions about both the progress of MinRes’ promise to address major shortcomings in its governance and the timelines for the agreed exits of founder and chief executive Chris Ellison and chair James McClements. Ms McGill and Ms Corlett formed the majority of the three-person independent ethics and governance committee formed in February to improve MinRes’ behaviour after a disastrous 2024 marked by revelations about related party deals struck by Mr Ellison. The influential governance adviser to Australia’s big industry superannuation funds said MinRes needed to come clean on the circumstances behind the departures. “The simultaneous resignation of two independent directors on the MinRes governance and ethics committee raises a major question for investors - what prompted their departure?” Ed John, executive manager of stewardship at the Australian Council of Superannuation Investors, said. “Today’s announcement is particularly concerning in the context of the board’s work to address governance failures and rebuild investor trust,” Mr John said. “The company needs to explain to its shareholders what has happened to prompt the departure of the directors and what this means for plans to improve independence and transition the roles of board chair and managing director.” MinRes provided no reasons for the departures but Ms McGill has been with the company for little more than a year. Mr McClements said both directors had both “contributed an enormous amount to the MinRes board over their respective tenures”. “Both Susie and Jacqui have dedicated substantial time and effort over recent months in our efforts to improve governance and procedures across the business, whilst navigating their significant other professional commitments,” he said. “On behalf of the board, I want to thank Jacqui and Susie for their contribution and wish them the best for the future.” Ms McGill, who is also a director of Goldfields, New Hope Group, 29 Metals and the Royal Automobile Association of South Australia, joined MinRes in only January 2024. Addressing a fiery MinRes annual meeting in Perth in November, she admitted her short time at the company had been unexpectedly challenging given the scandals that surfaced after her arrival. “It’s been full of unexpected turns and challenges and things, frankly, I couldn’t have contemplated when I came on board,” Ms McGill told shareholders as she reaffirmed her commitment to “strong outcomes”. “I’m now playing a central role in the process to ensure MinRes has the strongest possible governance processes and arrangements. “I’m proud to be part of that, and I’m committed to achieving strong outcomes.” Ms Corlett has this week been in the sights of Ownership Matters over her directorship of Iluka Resources, with the proxy adviser telling its clients not to re-elect her because of the MinRes connection. It said that her 4½ years at the Ellison company had coincided with “material corporate governance shortcomings ... particularly regarding related party transactions and board oversight”, MinRes and Mr Ellison have been under intense pressure since revelations the founder was involved in historic tax evasion on co-owned offshore companies and used MinRes for personal benefit via a series of related party transactions. His fellow directors, with the help of external lawyers, have looked into his conduct. The Australian Securities and Investments Commission is also investigating. Mr Ellison has apologised for his “mistakes” and has undertaken to step down as chief executive before mid-June, 2026 once a replacement has been named. The company is also looking for a new chair, with McClements pledging to step down before the next annual meeting. The board has also introduced a range of policies and processes aimed at tightening up MinRes’ governance. Part of its action plan included the ethics and governance committee, which was founded “to oversee the company’s compliance efforts and ensure that (MinRes) meets the highest legal and ethical standards”. The governance crisis hit the group as it was already dealing with weakening revenue and profits off the back of lower iron ore and lithium prices. The scandals have further savaged its share price, which was above $98 two years ago, heightening investor concerns about its large debt load. The stock has lost 76 per cent to $16.61 over the last 12 months, reducing MinRes’ market value to just $3.3 billion, or little more than half of its $5.8 billion in debt.