Goldcorp boss on gold driving economies: CEO Series
Nov 05, 2013
The fall 2013 series of “The Chief Executives” concluded with Charles Jeannes, President & CEO of Goldcorp, discussing the significant impact the extractive sector has on the Canadian economy, which has resulted in gold becoming Canada’s number one export – totaling some $14.5 billion a year.
Jeannes was speaking with Bill Good as part of an ongoing partnership between the Beedie School of Business at Simon Fraser University and prominent Vancouver radio station CKNW News Talk 980 to bring advice and strategy insight from some of the province’s top executives to the Segal Graduate School.
After starting out as a lawyer, Jeannes always envisioned his career path taking him into the extractive sector, having grown up in a mining community in Nevada. After ten years of practicing law, in which time he facilitated a number of deals for mining corporations, he grew tired of only working as the mechanic in the transactions, and accepted an offer with Placer Dome that started his career in mining.
“I had a great law practice, but took a 50 percent pay cut in order to get into general management and business development,” he said. “My family thought I was crazy, but I thought it would work out for us and it did. Sometimes you have to take a risk and be willing to jump a bit. I’d recommend to anyone that you have to be willing to take risks in your career.”
With mines across both North and South America, Jeannes spends a lot of his time examining new opportunities. While Goldcorp has not purchased any new assets in some three years now, he explained that both he and the board are in no rush to do so, and are simply biding their time waiting for the right investment opportunity.
One new venture that has yet to bear fruit for the organization, however, is the new mine in Argentina. Now set to open in summer 2014, some six months behind schedule, it has been beset by a number of problems delaying the launch, such as foreign exchange and labour issues.
Jeannes revealed that Goldcorp’s capital costs for the last quarter were several hundred million dollars higher than normal, something he attributed to “Keeping the lights on in Argentina.” He did, however, stress the importance of looking at the big picture in business, not just in terms of mining, but also in the entire organizational culture.
“If you don’t need that immediate gratification you will prosper,” he said. “Developing a new HR or communications policy for example – these things take time. It has to be a long-term investment. The theory is that gold withstands inflation, but you can have off periods in long term cycles. You need to be in it for the long haul with mines, so that you see a return on your investment eventually.”
As the largest mining company in the world measured by market capital, and with over 16000 employees under his watch, recruiting the right staff is understandably a priority for Jeannes.
“People are the most important thing we have to do right in order for the company to be successful,” he said. “We have a fairly decentralized and autonomous structure where offices around the world are empowered to make decisions, but that can be a little messy at times. You have to hire the right people who are comfortable with uncertainty, who can be left on their own to manage their business.”
Questioned about Goldcorp’s increasing emphasis on corporate social responsibility, Jeannes revealed that it is a core value of the company, and that they actually allocate one percent of their pre tax earnings to philanthropic efforts each year.
“We have made a real effort in the downtown eastside in recent years, and right now are focused on the core issues of mental health and addiction,” he said. “I sit on a board that deals with specific issues with respect to addiction. I just think it is the right thing to do. Vancouver is a great place, and we want to make it better.”