WORLDVIEW: Anglo American AGM – Leadership culture is not fit for purpose

Investors who live to enjoy the power of compounding returns need to apply both science and art. First comes patience and its mathematically-based logic. Then there's the art of intuitive ability to read people. Or, in the case of companies, accurately calling whether the leadership team is fit for purpose.

The late great US West Coast wealth builder Phil Fisher introduced "scuttlebutt" to the investment lexicon, refining informal observations about businesses into an art form. A modern successor, Warren Buffett, takes a Mid-Western "better to have loved and lost" approach – trusting the morality and honesty of those running companies unless he discovers something to change his opinion.

Their advice was uppermost while I absorbed Anglo American Plc's AGM. The resultant feeling was uncomfortable. Very uncomfortable. Anglo's leadership referred often to its operational restructuring as work in progress. A far bigger but apparently unrecognised challenge is a deeply embedded hierarchical culture long past sell-by date. Something starkly obvious to outsiders.

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