The world around us is changing rapidly, and while the impact of this change is not limited to mining and resources, the international nature of this sector makes it particularly susceptible.
“Mining organisations continue to feel the impact of change in diverse and challenging ways geopolitically; environmentally; technologically; through social activism and changing shareholder expectations,” explains Nona Sichinava, a Partner for Gerard Daniels. “To survive, mining companies, irrespective of their size, simply must evolve no matter their stage of development.”
Here we consider some of the changes that are having an impact on mining and resources organisations; how this change is shaping the role of CEO and MD; and the type of leaders that are needed to futureproof this sector.
The green energy transition
“Growing momentum around the green energy transition is prompting many resource-producing nations to examine their own critical minerals, and to define how they fit into the new energy landscape. Meanwhile, this shift is putting pressure on some of the developed nations that lack critical minerals, to secure the supply chains they need to deliver on their net zero commitments and stay competitive,” says Nona.
“The emergence of criticality around the minerals and materials needed to support the green energy transition is also leading to growing resource nationalism and shifts in the global power centres, as developing nations realise the value of their own resources and the significant economic opportunity that they represent,” she continues. “The ability to design and implement strategies to harness these new opportunities and to guide organisations through this transition, will therefore be intrinsic to the role of all future CEOs and MDs.”
Expanding stakeholder relations
As the circle of influence around the resources sector and its social licence to operate expands, the ability to identify and build relations with increasingly diverse stakeholders will become critical to the role of CEO.
“With the challenge this sector faces to meet demand, there will be a growing need to collaborate more across industry and geography, to deliver on the significant green energy transition challenge that lies ahead. This requires leaders with the ability to build and maintain mutually beneficial relationships with diverse stakeholders,” says Nona. "Joining relevant mining industry organisations can help aspiring executives to build these relationships, and can introduce leaders with excellent technical and operational experience to the complex world of Government relationships and political policy."
Along with the growing number of internal and external stakeholders, CEOs must also navigate increasingly complex relationships between different levels of local and regional governments - who may have competing priorities and agendas - and industry organisations.
“Where historically many western governments facilitated the development of mining operations, today fewer governments proactively build the domestic partnerships to make permitting easier,” Nona continues. "And although there may still be alliances where a country’s national economic or defence interests are involved, this shift has made stakeholder relations even more important for CEOs to navigate."
Futureproofing resources sector leadership
Given the breadth of change affecting the mining and resources sector, many organisations are now tightly focused on futureproofing. To thrive through this change, CEO’s and MDs are expected to be able to think and expertly strategise about future challenges, however, Nona believes that this ability is not always easy to capture from an applicant’s resume or previous experience, creating a recruitment challenge for appointing these roles.
“Previously, CEO selection was comparatively backward-looking. Mandates were narrowly defined, and it was clear what type of person was suitable for delivering on these roles,” says Nona. “Professionals with strong technical and operational foundations climbed the corporate ladder quickly, and often their track record was sufficient to prepare them for the CEO role, where they repeated previous experience on a larger scale.”
However, today’s forward looking approach to selection is much more challenging. “It requires nominating committees to identify professionals with a strategic mindset and the ability to anticipate future issues, which means looking into someone’s track record is no longer sufficient,” says Nona. “Today’s CEOs must possess strong strategic intent because half of their job is now future looking. But they are also expected to deliver, and this mix of delivering on present operational needs and shaping future/strategic vision, can be hard to find in one person.”
Building capable and diverse executive and management teams
Building strong leadership teams to deliver on the future of the resources sector will be another challenge for future leaders. “There is so much change happening with future remaining uncertain, and keeping up with all of this change can’t necessarily be done by just one person, hence, CEOs and MDs can’t be expected to have deep experience in all areas required to lead mining organisations,” says Nona. “Instead, it requires leaders to delegate some of their portfolio to the right people within their own teams, and to accept the need to partner with others to deliver on some aspects of their role.”
“To be able to do this, future leaders will need the proven ability to build and manage strong executive teams to deliver on their strategic vision,” says Nona. “Having teams with the right skills and experience to back leaders in the right areas, and to deliver on the organisational objectives, is an important part of this remit. The ability for CEOs and MDs to delegate, to develop and lean on executive leadership teams will also be essential for the success of an organisation.”
What will future resources sector leaders look like?
Nona describes many characteristics that successful resources sector leaders will likely possess. “Future CEOs will need to be nimble, diverse in their skill set, highly ethical, and somewhat stress resistant to endure the pressure that comes with leading in an industry that’s subject to a constant state of change,” says Nona. “Modern CEOs must also have exceptional communication and stakeholder engagement skills, to reconnect the workforce and manage the diversity of influencers that determine the social licence to operate.”
“While it’s unfair to expect CEOs to have deep understanding and expertise across the vast factors that will shape the mining industry, this role does require great intellectual curiosity to want to learn,” Nona concludes.
Partnering with an executive search firm that understands the industry and its challenges, and has deep and diverse networks, can be a powerful strategy for future proofing the leadership and performance of your mining organisation. For advice on CEO succession planning, executive search or advanced executive assessments, contact Nona or connect with your local Gerard Daniels team.
