HESTA Divests Remaining Stake in Mineral Resources Amid Governance Concerns

Australian superannuation fund HESTA has announced the complete divestment of its remaining stake in Mineral Resources Limited (MinRes), citing serious governance concerns. This decision follows a series of controversies involving MinRes’s founder and managing director, Chris Ellison, and the resignation of key board members.

HESTA, managing approximately A$90 billion in assets, had previously placed MinRes on its watchlist due to governance issues. The fund’s CEO, Debby Blakey, expressed disappointment with MinRes’s response to these concerns, particularly the extended 18-month transition period for Ellison’s departure. Blakey emphasized that the succession timeframe does not reflect the seriousness of the issues and indicates a systemic failure of governance at the senior management and board level.

The governance crisis intensified after the resignation of three independent directors—Denise McComish, Jacqueline McGill, and Susie Corlett—who formed the company’s Ethics & Governance Committee. Their departure followed an internal investigation that revealed Ellison’s misuse of company resources for personal benefit, including directing employees to work on his private projects and using company funds for personal purchases.

In response to the findings, MinRes imposed financial penalties on Ellison totaling A$8.8 million and required him to forfeit up to A$9.6 million in remuneration. Despite these measures, HESTA remained unsatisfied with the company’s actions, leading to the decision to divest its holdings.

HESTA’s divestment underscores the growing emphasis on corporate governance and ethical practices among institutional investors. The fund has also flagged concerns with other companies, including Woodside Energy and Santos, reflecting a broader commitment to responsible investment strategies.

As MinRes navigates this governance crisis, the company’s leadership faces increased scrutiny from investors and regulators alike. The Australian Securities and Investments Commission has initiated a formal investigation into the company’s affairs, further highlighting the need for robust governance reforms.