‘Double-outsider’ status weakened Carroll

Cynthia Carroll had a tough task from the outset when she took over as Anglo American chief executive in 2007.

Not only was she the first non-South African to head Anglo, but she was also the first woman – which some big investors said counted against her from the start.

One top 20 investor in the global mining group said: “We have always rated her, but the old male guard have never really taken to her. Wildcat strikes in South Africa and problems with Codelco [the Chilean mining group] were good excuses to get rid of her.”

Other big investors agreed that Ms Carroll was probably more a victim of circumstance rather than her lack of ability, with strikes in South Africa hitting the group’s platinum production and the dispute with Codelco last year, which ended up with the two companies reaching a deal in August over the South African group’s Anglo Sur unit.

Another top 20 investor said: “Cynthia Carroll had a double-outsider status of being non-South African and being a woman. It revolutionised the company and she was good, but the latest problems have made it difficult for her to hold on.

“I don’t blame her for the problems at the company, but the fact is the share price is down about 50 per cent since the start of last year. If you are a chief executive and your share price has fallen that sharply and your return on equity is the worst for a long time, then you are going to be very exposed.”

Analysts agreed that Ms Carroll was not entirely to blame for the poor performance with some privately accusing Sir John Parker, chairman, of getting too close to the day-to-day running of the group.

“She’s had a lot of criticism over the years and a lot of it is not duly deserved,” said Jeffrey Largey, analyst at Macquarie, adding that Ms Carroll had performed an admirable job in improving health and safety, and government relations in South Africa. “I think she deserves some credit there,” he said.

But analysts at Citi said: “We believe Ms Carroll’s departure will be seen as a positive catalyst for Anglo American. It is commendable, in our view, that Anglo’s board acted on shareholder discontent with Ms Carroll’s leadership.”

If you are a chief executive and your share price has fallen that sharply and your return on equity is the worst for a long time, then you are going to be very exposed

Lurking in the background has always been dissatisfaction with the poor share price performance. The group’s share price has suffered during her six-year tenure, declining some 25 per cent.

Mr Largey said this frustration had grown in recent months, with the “the blame falling more and more squarely on her shoulders”.

He added: “The perception became that anything and everything that went wrong was laid at her feet.”

As well as problems last year with Codelco and striking miners in South Africa, criticism was directed at her over the purchase of a stake in Kumba Iron Ore, which was seen as ill-timed in terms of valuation.

Another source of contention has been Anglo’s Minas Rio iron ore mining development in Brazil – a project that has been mired in permit and licensing problems.

“Anglo paid a very full price for the asset and it’s been trouble ever since. The capital expenditure has only continued to rise. It’s more a Brazil issue than an Anglo issue, but it was a marquee acquisition for her,” said Mr Largey.

Ms Carroll also oversaw Anglo American taking full control of De Beers, the diamond miner, in a deal that was worth $5.2bn and completed in August.