independent directors, page-8

Zinc

I appreciate your concerns. I don’t believe the issues I have raised are of concern only to small shareholders, if anything, adequate board size, director independence and sound corporate governance are more important to the larger funds than they are to individuals. My objective in seeking election to the board is to work hard and assist the company in whatever way I can, not to be obstructive or divisive. Keep in mind that any director is required to seek re-election after 12 months in office, so my performance would be carefully scrutinised by the shareholders and board, and a failure to work constructively with the board would result in fairly rapid ejection.

One of my concerns with boards in general is that they tend to be made up of specialists in one particular subject. It is rare to find engineers with strong business backgrounds, and it is equally rare to find people from an accounting or legal background who are genuinely capable of understanding the in-depth technical issues. I view myself as being an unusual combination of someone with an extremely strong technical and scientific background, who also has extensive business experience. I don’t mean the sort of business experience you get working as a middle manager for a multinational, I mean the sort of business experience you get from creating and developing a company, where the decisions you make and the negotiations you participate in can truly make or break the business. The concept of risk management takes on new meaning when it is your own business that is on the line.

I pride myself on being able to pick up almost any technical subject and develop a good understanding (although I still admit a certain frustration with some of the concepts of quantum physics). My specific areas of technical knowledge include geometric modelling and computational geometry, hydrostatics and hydrodynamics, optimisation, particularly stochastic optimisation methods, as well as the use of neural networks for non-linear regression. On the financial side, and in my own time, I have looked at the application of neural networks to the modeling of an analog of the Black-Scholes equation in order to cope with non-normal distributions (in particular, leptokurtotic and heteroskedastic distributions), as well as their application to non-linear time series modeling. I actively trade options and have an excellent knowledge of options strategies, particularly hedges.

The technical side of the oil business is not rocket science, my understanding of the technicalities of oil exploration is already good and, thanks to boards such as HC and TMF, my knowledge of the details of Hardman’s business is also excellent. However I also have the experience that comes from creating and building a decent sized company, travelling to and doing business in most of the countries of the world, and serving as a director of both Pty. Ltd. or unlisted public companies for the past 18 years.

In other words, I’m a generalist, but a good one, and in the absence of any nominations from the theoretically perfectly qualified directors that we would all like to have, I feel I can make a valuable contribution. Don’t underestimate the value of people capable of understanding all sides of a business to a board.

I have quoted this on my web page but it is worth re-quoting the views of the Australian Institute of Company Directors on the subject –
"An Australian board must have the appropriate mix of skills and competencies that are required to maximise the company’s performance.
Ensuring the correct skills mix means that different business backgrounds, experiences and approaches may need to be considered and sought.
Diversity in boardrooms enriches debate, promotes independence of thought and gives companies a competitive advantage. This in turn will contribute to Australia’s economic competitiveness.
The AICD encourages its membership and wider business community to ‘look outside the box’ at options other than traditionally accepted criteria, such as the ex-CEO pool, for talent when considering new directors. This will enable groups less represented on today’s boards to be accessed."


Andrew Mason

http://hdragm.squarespace.com/