Barrick Announces a New Management Strategy



Current Barrick Gold CEO Jamie Sokalsky will step down in mid-September.
Toronto-based Barrick Gold CEO Jamie Sokalsky will step down during midSeptember, the first management shake-up since John Thornton replaced Peter Munk as chairman of the world’s largest gold miner in April. A 20-year Barrick veteran, Sokalsky, who was CFO at the time, replaced Aaron Regent as CEO during June 2012. The company credited Sokalsky for introducing a strategy to prioritize returns and free cash flow over production growth and leading a company-wide portfolio optimization program during his tenure as CEO.

Opting not to name a new CEO, the company has decided to split the duties between two co-presidents (See People, p. 12): Kelvin Dushnisky, senior executive vice president responsible for corporate and government affairs and chairman for African Barrick Gold plc, and Jim Gowans, executive vice president and COO. This model, according to a company statement, “reflects the interconnected nature, and strategic importance of jointly managing day-to-day mining operations and the company’s relationships with host governments, local communities and other external stakeholders.”

“These structural changes put an even greater emphasis on operational excellence, and will accelerate our portfolio optimization and cost reduction initiatives, while fostering a partnership culture both inside the company and externally,” said Thornton.

Munk and Thornton are two different types of leaders. Munk founded Barrick in 1983, growing the company from a small junior producer with one mine into a global gold industry leader and a Canadian champion, with operations on five continents. He had a reputation for making changes at the top, including the firing of three CEOs in 10 years.

Before he was appointed chairman of Barrick, Thornton served on the boards of several international public companies. He retired as president of Goldman Sachs in 2003 and is currently a professor and director of the Global Leadership Program at the Tsinghua University School of Economics and Management in Beijing. He is also chairman of the board of trustees of the Brookings Institution in Washington, D.C.


John Thornton, chairman,
Barrick Gold, has no
intention to act as CEO.

Analysts in the business press view the move as unusual, saying it will lead to Thornton taking a more active role in running the company. In a recent interview, Thornton dismissed that point of view and said he didn’t see his role changing that much and he had no intention of acting as CEO.

When the merger talks between Barrick and Newmont Mining broke down in April, there was speculation that a change at the top would be imminent. The proposal to combine the two companies called for Sokalsky to leave the merged company to run a set of assets that would have been spunoff.

As gold prices dropped to $1,300/oz today from highs of $1,700/oz in the last two years, Barrick has paid the price for takeovers and ambitious projects with massive writedowns. Barrick has lost 60% of its market value in the past two years, according to the Wall Street Journal. The company still carries a high level of debt and it recently placed the Pascua Lama project, which straddles the border between Chile and Argentina on hold.


As featured in Womp 2014 Vol 08 - www.womp-int.com