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Listed|Mining PDAC 2014

The Directors Chair

Eira Thomas

Engage early and often

In The Directors Chair with David W. Anderson: Eira Thomas, storied geologist turned founder, director, CEO
and chair, says sharp stakeholder relations and smart governance are making winners in mining today
Photography by Brian Howell

Eira Thomas burst onto the Canadian mining scene in the 1990s, leading
the Aber Resources Ltd. field exploration team that discovered the Diavik
diamond project pipes in the Northwest Territories. By the time Diavik went
into production in 2003, as Canadas second diamond mine, Thomas had
been a director at Aber (now Dominion Diamond Corp.) for five years. In
2006, she added large-cap energy governance to her tool kit, becoming
a director at Suncor Energy Inc. Since then, shes held numerous directorships
while continuing to build and run her own companies. Here, in conversation
with governance adviser and Listed contributing editor David W. Anderson,
Thomas shares insights shes gleaned in her various mining roles, and
weighs in on the major trendsfrom First Nations relations to board
diversitynow shaping the sectors future.

Eira Thomas
Primary role
President and CEO, Kaminak Gold Corp.
Additional roles
Director, Suncor Energy Inc.; Director, Dundee Precious Metals Inc.; Director, Lucara Diamond Corp.; Director,
University of Toronto Alumni Association; Director, Lassonde Advisory Board of the University of Toronto;
Member, University of Toronto Presidents Internal Advisory Council
Former leadership positions
President, CEO and Director, Stornoway Diamond Corp.; CEO and Director, Stornoway Ventures Ltd.; President,
Navigator Exploration Corp.
Former chair and director
Executive Chairman, Stornoway Diamond Corp.; Director, Prospectors and Developers Association of Canada;
Director, Aber Resources Ltd.
Education
University of Toronto, Bachelor of Science in Geology, 1990
Honours
kCanadas Top 40 Under 40, 2004

kThe William Harvey Gross Award, 2007

kTop 100 Canadas Most Powerful Women, 2007

kYoung Global Leaders, 2008

kCanadian Institute of Mining, Metallurgy and Petroleum (CIM) Past Presidents Memorial Medal, 2009

kMinerva for B.C. Women Natural Resources Award, 2010

Current age
45
Years of board service
16

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Mining PDAC 2014|Listed

The Directors Chair

Eira Thomas

David W. Anderson Youve spent your entire career in the mining

business and know it intimately. How important is it for a corporate leader to have come from the field?
Eira Thomas It is very important to learn a business from the bottom
up. I went from being a geologist collecting dirt samples to being CEO
reporting to my board. If you aspire to be a leader in business, its essential to have a strong background in how the business worksand
to get your experience on the frontlines. Demonstrating that I understand the building blocks of my business gives me credibility with
my board. That hard-won knowledge of the business gives me extra
insight to better explain and position my decisions with my team
and with my board. I think an executive who hasnt grown up in the
business can use experiences from related businesses for insight, but
theres no way around the fact that growing up in a business and seeing
first hand its many facets make you better informed and able to understand the consequences of your decisions.
David W. Anderson What does your frontline experience in years

past mean to your executives today?


Eira Thomas That early experience has allowed me to build a strong

leadership dynamic with my team. I think theres a certain respect that


comes from been there, done that. Among my younger group of leaders, my experience in the field makes for a particularly strong bond, as
they have aspirations for their own paths.
David W. Anderson How does field experience affect your deci-

sion-making as a leader?
Eira Thomas I dont spend much time in the field now, but my prior

experience remains relevant and helps me make the right decisions for the business today. The experience of working directly
with samples and field data means that I can interpret the data
unfiltered, see the relevance of the information and quickly distil
the bottom line results. While thats useful as the CEO, whats at
least as important is that my experience allows me to choose good
people who are current in a variety of specialties the business requires. I cant stay on top of all the scientific disciplines that make
for a successful mining company. I need that cross-disciplinary
approach to succeed; with the right team in place, I can then rely
on their expertise to meet our companys objectives. In fact, I
need to remain open-minded to technical innovation and not let
my experience keep me in the past.

business development is vital to understand. Its a valuable education


for me to witness and participate in how these leaders manage a wide
range of issuessocial, political, regulatoryand keep their companies on a strong growth path.
David W. Anderson Youre a young CEO, yet even in your tenure

as an executive youve seen significant pressures transform how


the business of mining is carried out. What has been the most
important change in your view?
Eira Thomas Its clear that mining companies here and abroad
have had to think hard about the context and consequences of our
industry. Its a fast-evolving area. The manner in which we think
about our business, communicate our goals and create tangible
benefits for local communities has become essential. The mining
industry has not been known for engaging early with stakeholdersprincipally because when were starting the process of exploration, were thinking about science and discovery. But in my
career, it has become important for even the smallest explorers to
think about the communities and stakeholders theyll be interacting with as they grow. Much of this thinking and language stems
from corporate social responsibility, but from my point of view as
a business leader, it just makes sense to make sure our stakeholders are informed and understand that we want to maximize the
value of the project for the communities were operating in. This
is particularly true in the North where we have every incentive to
maximize the involvement of local people, as transporting labour
from the South is so expensive. Even though 99% of the time a site
doesnt make it to development, its still useful to communicate
the successes and failures.
David W. Anderson First Nations play a unique and vital role in

Canada and their interests are often affected by the mining


industry, particularly in remote regions of the country. What
responsibility do mining companies have to engage with First
Nations?
Eira Thomas Its imperative for companies to establish good relations and identify opportunities for partnership with First
Nations. We always look for ways to make business benefit the
community members in the vicinity. Government has a critical
role to play because of treaty rights, but the reality is that the federal governments duty to consult has not been discharged well.
This makes our work more difficult.

David W. Anderson While being an active CEO, you also serve on

several noteworthy boards as a director, seeing businesses from


the top down. Has this vantage point given you insight into your
own CEO leadership?
Eira Thomas Yes, every board I serve on helps me be a better CEO.
Its fascinating as a CEO to sit on a board and interact with another
CEO and his or her executive management team. I observe how those
CEOs interact with their executives and board, how they take advice
and how they operate. Leading a small company as I do, its instructive
for me to see how CEOs of larger companies have built their organizationsthe skill sets theyve put together and how they strategize about
growth. I come from a place of having started companies motivated by
an entrepreneurial agenda, but how you grow an idea or a discovery
into an operating entity that employs people and contributes to economic growth is important. The path from discovery to full-blown

David W. Anderson Youve led from the front in this new era of
engagement with First Nations and other local communities.
Whats motivated you to see these communities as important
stakeholders?
Eira Thomas The communities in which we are located are important because they give us our social licence to operate. We
purchase that license with our honest engagement and provision
of community benefits. As the world becomes smaller, were all
more aware of how we affect each other. While these are good
things to do they are also business necessities. Our approach is
to create dialogue and keep our communities knowledgeable and
comfortable as we progress. We think about how to maximize the
opportunities and benefits with stakeholders to make it meaningful and productive for the bottom line.

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Mining PDAC 2014|Listed

The Directors Chair

Eira Thomas

David W. Anderson What specifically are the means by which you

work with local communities to achieve productive business ends?


Eira Thomas Our mantra is engage early and often. We want to understand the interests of all our stakeholders and be clear in communicating what were about, our objectives and where we see ourselves
in 10 years. The challenge we face in dealing with local communities
is uncertainty; we dont want to build up unrealistic expectations. A
sampling doesnt mean there will be employment for hundreds of local people. So we balance communicating why were there, what were
doing and the possible economic benefits to the community. Finding
that right balance in engagement means we dont want to overconsult,
either. We earn trust when we show transparency, listen to stakeholders, understand their concerns and incorporate those concerns into
our strategy.
David W. Anderson Whats an example of where this business

strategy to engage local communities as stakeholders has been


successful?
Eira Thomas The Diavik Diamond Mine in the Northwest Territories
is a case study in both the evolution over 20 years in how business
works with First Nations communities, and just how profitable meaningful engagement and cooperation can be for all. Im most excited to
reflect on aboriginal employment in the development of that mine,
because few opportunities exist in the North for high-paying skilled
labour. Investments were made to train local people in the necessary
industrial skills. With the communitys support, Diavik has the greatest First Nations participation, at 40%, of any industrial employer in
the country, when most industrial employers struggle to get a few percent of their workforce drawn from the aboriginal community. Lots of
associated industries have also sprung up, multiplying the economic
advantage to the community. These achievements are a huge benefit
to the local First Nations people and the mining businesses. Economic
development in the resource sector is one of the rare opportunities in
many regions; its important then to engage early and work hard to ensure that if and when a new mine is developed, local communities can
participate and benefit.
David W. Anderson Are there changes youve witnessed in the
governance and management of smaller mining companies
worth noting?
Eira Thomas Yes, weve seen a huge evolution in the role and functionality of junior mining company boards, particularly in how their
boards are selected. Traditionally, a strong CEO assembled around
him or her a board based on who the CEO knew and who was willing
to serve in a narrow, advisory capacity. No effort was put into building a board based on a relevant skills matrix, so they lacked diversity.
Most companies now recognize that smart governance practices lead
to more functional board dynamics. Companies are now run differently because changing boards has changed how decisions are made.
Its that fundamental.
David W. Anderson Its often said that governance is a big com-

pany preoccupation that wears at the nimbleness of small companies, but youre offering a different view?
Eira Thomas I think its about matching the right level of governance rigour to where the company is at. We need to understand
that success at the outset rests on the shoulders of the entrepre-

neur singularly committed to an idea. That unique entrepreneurial


drive can lead to initial success. Having reached that early milestone, governance can move a company from having proved a good
idea to operational excellence. The time to focus on governance
comes earlier than many imagine; the sophistication of governance
then scales with the business, setting up the conditions to catalyze
and sustain successful growth. Traversing the path from an idea to
a start-up to managing the business and planning for growth also
requires leadership. Its not easy for an entrepreneur to shift gears
from lean and mean to being a leader managing thousands of
people and a corporation focused on quarterly revenue targets. A
strong and diverse board can help.
David W. Anderson Many CEOs value industry expertise on their

boards and are reluctant to see it traded off for generalized


knowledge in the pursuit of diversity. Whats more valuable to
you on a board and is such a trade-off necessary?
Eira Thomas My view is that industry expertise is really important
on a board so that the board can be of value to the CEO. Theres
also no question we need greater diversity, broadly defined, on
our boards, but I dont support quotas as it does a disservice to the
board to appoint solely for gender diversity. I want a board where
everyone knows they were selected on experience and skills and
thus can make a contribution.
David W. Anderson How does a board do that well?
Eira Thomas Each board needs to establish the criteria for what its

looking for on the board, remembering that the point is to create a


board for the greatest benefit to the business strategy. Any board that
is considering new board candidates has to use a skills matrix to determine the gaps and thus where it would benefit from additional skill
and expertise.
David W. Anderson What should be done if women are still underrepresented?
Eira Thomas If were not finding enough women, we have to understand why this isand redouble efforts to identify and develop female
candidates. Boards are often made up of people with a track record of
success who are at the end of careers. There may not be a large enough
talent pool of female executives at that advanced stage [to fill the current demand]. I just went through a board search and the qualified
women we saw were not available. That said, as women are now in
high demand by boards, some are giving up their careers to take directorshipsand do better financially and enjoy greater flexibility to
meet their family priorities. But even that has a downsidewere seeing qualified female CEOs opting out of active executive leadership
in their prime. This is not a positive trend for industry to have women
move prematurely to boards because we lose their leadership in the
active business community.

David W. Anderson, MBA, PhD, ICD.D is president of The


Anderson Governance Group in Toronto, an independent
advisory firm dedicated to assisting boards and management teams enhance leadership performance. He advises
directors, executives, investors and regulators based
on his international research and practice. E-mail:
david.anderson@taggra.com. Web: www.taggra.com

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Mining PDAC 2014|Listed