Two of Barrick Gold Corp.'s independent directors resigned suddenly on Tuesday, the company said in a surprise announcement that came less than two weeks after it overhauled its board and nominated four new independent board members.
Robert Franklin and Donald Carty had been in charge of talking to Barrick's institutional investors about their concerns regarding the company's governance. They joined Barrick in 2006 when the gold producer bought Placer Dome, where they served on the board. Mr. Carty is currently the chairman of Porter Airlines Inc.
They had led the search for the new slate of independent Barrick directors, which culminated in a board revamp announced early this month that included the planned exit of chairman Peter Munk along with two other long-standing directors. Major Barrick shareholders had clamoured for boardroom changes after it awarded Barrick co-chairman John Thornton with a $11.9-million (U.S.) signing bonus, which he used to buy Barrick stock.
The unexpected departure of two more Barrick directors signals that institutional investors continued to look for governance improvements even after the board overhaul. earlier this month. At the time, major shareholders applauded the moves, but indicated more could be done.
Caisse de dépôt et placement du Québec spokesman Maxime Chagnon said at the time the fund looked 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."
It is unclear when or whether Barrick will choose two more independent directors to replace Mr. Franklin and Mr. Carty.
A Barrick spokesman declined to comment.
Barrick nominated four directors in early December, including Bay Street veteran Ned Goodman and coal-mining executive Ernie Thrasher.
Barrick's 86-year-old founder and chairman Peter Munk is set to hand over the chairmanship to Mr. Thornton at the upcoming annual meeting of shareholders in 2014.
As well, the company said two of Barrick's longest-serving directors, former prime minister Brian Mulroney and lawyer Howard Beck, would not stand for re-election.
If Barrick's board decides against replacements, the company will have a 12-member board including eight independent directors. Currently, there are 13 board members and seven independent directors.
Barrick's boardroom shuffle comes after a difficult year for the company.
Like other miners, Barrick has had to retool operations in order to weather the 30-per-cent drop in bullion prices.
The company, the world's biggest gold producer, has recorded nearly $14-billion in writedowns, suspended one of its key gold projects, Pascua Lama, cut jobs and reduced its dividend.
The signing bonus, which was made public in the spring, became a tipping point for investors rankled with the 50-per-cent drop in Barrick's share price.
Mr. Franklin and Mr. Carty could not immediately be reached for comment.