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Late challenger

3 April 2014 By Chris Hughes

Blythe Masters’ exit from JPMorgan with the sale of its physical commodities business could solve Glencore’s longstanding search for a chairman. The brains behind the credit default swap has the expertise to join the trading house’s board, whose all-male roll makes it an anachronism in the FTSE-100. But there is one big obstacle to her leading this or any board – she has never run a company before.

Time is short. Glencore has committed to filling the chairman vacancy before its annual meeting on May 20. The group is at the stage of discussing three candidates with shareholders. It is not surprising the search has dragged on – there are few people who carry all the skills for the job. The key personal attribute is the ability to act as both a support and a balance to Chief Executive Ivan Glasenberg, who has more influence than most bosses since he owns an 8.3 percent stake. The candidate also needs to have the backing of British institutional shareholders. That argues for someone whose curriculum vitae is heavy with UK company experience. Knowledge of commodities is also essential if the chair is to participate fully in strategic and technical discussions.

Masters ticks some but not all the boxes. Her main handicap is that she has not been a chief executive herself, even though she has had many senior leadership positions at JPMorgan. That would make her appointment to the role especially brave. True, the Glencore board already has some former CEOs on it – including ex-Morgan Stanley chief John Mack. But it might be hard for Masters to run the board authoritatively without comparable experience herself. Mack’s presence also dilutes the value of Masters’ financial perspective.

There is also the question of what is in it for Masters. Non-executive chairs may be relatively well paid by the standards of UK business – Tony Hayward received $742,000 as Glencore’s interim chairman and senior independent director last year. But the rewards of finance are usually much higher, and this job would put Masters offside for other lucrative opportunities.

If Glencore finds a better chair who satisfies the multiple criteria for the role, it will be well-served. And it may still have vacancies for a masterful new non-executive.


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