Listed | Spring 2017
The Director’s Chair
Warren Holmes

Share success, shoulder the blame
In The Director’s Chair with David W. Anderson: After nearly a decade as chair of Hudbay Minerals and a
career in Canadian mining, Warren Holmes has learned a few things about leadership and creating a culture
that puts company performance ahead of personal ego
Photography by Jeff Kirk

It takes all kinds of skill sets and personalities to make the business world go
around. But when Warren Holmes talks about lessons learned and his
accumulated wherewithal as an executive, a board chair and a corporate
director, it’s clearly rooted in the things he’s absorbed through working
with others—whether underground or in the C-suite. Don’t misunderstand:
Holmes has the requisite MBA you expect of executives of his stature, but
embedded in the stories he tells and the insights he shares here in conversa-
tion with leadership adviser David W. Anderson, are things learned in the
real world, not in the classroom. From topics like innovation and environmental
responsibility, to board renewal and strategy, Holmes offers a primer on the
value of common sense and sound, straightforward thinking.

Warren Holmes
Primary role
Chair, Hudbay Minerals Inc.
Additional chair and director roles
Lead director, Foraco International SA; lead director, Wallbridge Mining Company Ltd.
Former chair
Nuinsco Resources Ltd.; Victory Nickel Inc.; Ontario Mining Cluster (co-chair); Mining Association of Canada (vice-chair)
Former director
Altanta Gold Inc.; Campbell Resources Ltd.; Kirkland Lake Gold Ltd.
Former executive leadership roles
Executive vice-chair and interim CEO, Hudbay Minerals Inc.; president, Canadian Institute of Mining, Metallurgy and Petro-
leum; SVP, Canadian Mining Operations, Falconbridge Ltd.; VP and GM, Pamour Porcupine Mines Ltd., Noranda; president,
Ontario Mining Association; VP, Mining Association of Canada
BSc, Mining Engineering, Queens University; P.Eng; MBA, Ivey Business School, University of Western Ontario
kCanadian Institute of Mining, Metallurgy and Petroleum Past Presidents’ Medal
Age when first became a director
Years of board service

Spring 2017 | Listed
The Director’s Chair
Warren Holmes

David Anderson What did you learn as a miner that makes you a setbacks along the way. The board and management have to learn
better director today? from the past and stay focused on the future. We have to identify
Warren Holmes I spent a long time working underground as a min- the trends, and the changes necessary to improve competitiveness,
er. Early in my career, two things caught my attention with lifelong and be constantly working towards achieving these.
effects. First, the average miner was clever and capable. Though
often without a lot of formal education, they knew what they were David Anderson Exactly how has your leadership philosophy
doing and how to do the job better. I didn’t know much, so I learned been operationalized at Hudbay?
early on to listen to the people who did the work. This understand- Warren Holmes Hudbay is highly conscious of safety, the environ-
ing is critical to everything I’ve done since. Second, at age 25, on ment and our social responsibilities. Our expectation is that every
day two as a new mine superintendent, there was a fatality. This year our performance in each area will improve, as measured by
had an immense impact on me. I learned you have to be working on a range of metrics. This comes through in our CSR reports. The
safety all the time. The status quo was not acceptable to me, even basic business is mining. Efficient operations generate profits for
if it was to others. In time, I saw this applied equally to driving im- shareholders, which is as it should be. To remain cost competi-
provements in our approach to the environment and corporate so- tive, it’s important that things like safety, environment, commu-
cial responsibility. nity, reputation and responsibility are not given a back seat. This
is a role of the board, with a broad and general view of not only
David Anderson Cost reduction in the pursuit of profit is a com- the financial side but also the broader mandate and functioning
mon objective in business, framed at times in opposition to of the corporation.
environmental, social or safety issues. How do you view cost
management? Many will tell you that people don’t like
Warren Holmes You always have to be lowering your costs. The
rationale for cost reduction, safety and corporate social respon- change, but that’s not true. People
sibility is rooted in basic business survival. It’s important because
it ends up being your competitive stake in the world. In mining,
don’t love being the subject of change,
many would say your competitiveness is a result of the quality of but they do like an opportunity to make
your ore, and while that’s important, anyone who ignores their cost
structure will eventually get in trouble. When I was running a gold
changes in their work that they think
operation in Timmins—the lowest grade ore in the world—we were should be made.
able to make it profitable because we were focused on costs con-
stantly. A low-cost operation has to be safe and good environmen- David Anderson As a student of human nature, what are some
tally. Part of keeping your costs down is listening to employees to observations you’ve made that have informed your approach
learn how to do things better and to remain focused on safety. For to leadership?
me, I learned these things through experiences, not out of a text. Warren Holmes I found that listening to and helping people sort
Any of us can cut costs by 10% tomorrow, but that’s not a long-term through their own issues goes a lot further than trying to come up
solution. You can’t run on poor safety and be careless with the envi- with solutions on my own in isolation. People buy into their own
ronment and expect to be low cost for long. solutions. Similarly, relying on and working with colleagues yields
the best results and was necessary for me to get done what was
David Anderson What’s the link, then, between business strat- needed in all of my management roles. You can’t demand coopera-
egy, corporate social responsibility and profit? tion, though some think they can!
Warren Holmes You have to look ahead. It’s not just about meeting In my early days, I quickly developed an ability to talk to people.
expectations of customers, society and government today, it’s look- I spent a lot of time on the shop floor, underground and in the pro-
ing to see where they’re headed and moving in that direction today. cessing plant asking people what they were doing and what was
It sounds like this is costly, but it is much less expensive when you going on. In a position of leadership, I prefer to credit someone else
can anticipate, and work out a long-term plan to accomplish ob- for success and accept the blame when it’s going around. People
jectives. Work this understanding into your normal activities and know the reality. You don’t have to spell it out. Understanding hu-
make people throughout the company conscious of it. Get it done man nature is very important. None of us are very good at it, but the
as a way of life, not as a project that costs you money. better you do, the better off you are.

David Anderson Being conscious of these responsibilities might David Anderson The leadership you’ve come to exhibit over
slow business decision-making down in a time when much is your career is a study in ego management. How have you disci-
made of the need to act fast. How do you think of this trade- plined your ego to stay out of the way?
off? Warren Holmes I like to pretend I don’t have an ego! Big egos get in
Warren Holmes We think of business as moving quickly, and while the way. I had little or no training when I started in the mines. You
occasionally I get a surprise, I see change within organizations learn quickly you don’t know very much and I’ve kept that perspec-
happening gradually. Creating change by choice—implementing tive. I have had experience working with people with big egos and
an improvement initiative—is like trying to lose weight: the most I recognized how often they were wrong, which cost big money.
permanent change comes slowly and as a result of discipline, with Ego has very little to do with ability. We need lots of ideas and very

Spring 2017 | Listed
The Director’s Chair
Warren Holmes

little is black-and-white in the world. I put this into practice: if you over gives us frequent opportunities to rebalance our skill sets for
and I had our own ideas but you were the one working with it, if I what’s required over the next three to five years. New eyes and
didn’t think you were making a mistake, I’d go with your idea be- fresh energy is how we show management and our stakeholders
cause you’d make it work. If it was my way, you’d be less inclined to our value.
make it work. Many will tell you that people don’t like change, but
that’s not true. People don’t love being the subject of change, but David Anderson In the absence of codified service limits, how
they do like the opportunity to make changes in their work they do you ensure that on average you have one person leave each
think should be made. year—your engine of renewal?
Warren Holmes We have a shared commitment to performance
David Anderson In your role as chair, how do you work to ensure over personal preference. Most people are able to self-assess
that your views on leadership and human nature get reflected their interest and contribution and realize when it’s time to go.
in your approach? Knowing the process, we’re all aware that someone is going to
Warren Holmes My goal is that we all understand where we’re go- leave every year. In the rare case when it’s necessary, I will ask
ing and why. The whole board needs to know where we’re going someone to leave.
together to have accountability. It is difficult work to get people
aligned. I make sure I involve both board and management, sum- As a board, we believe in board renewal.
marizing what’s been said along the way. I’ll check in with people
to ask what they’ve heard, what they’re thinking and what con- It’s not just me, or a committee chair,
cerns they might have. I make use of my sensitivity to body lan- but the board itself. We change out one
guage as I listen and watch participation around the board table
and draw people out if I see someone holding back. I will get to the person every year on average, to have
bottom of withdrawn behaviour over time, but not necessarily in
that meeting. I make a point of following up with people inside and
complete turnover each decade, without
outside the board meeting. resorting to term or age limits.
David Anderson What do you say to management to aid them in David Anderson That takes unusual chair leadership and an im-
interacting effectively with a board? pressive board culture to function that way. Many boards say
Warren Holmes It’s not easy for management to fully appreci- they have the discipline to sustain a performance culture but
ate what value a board can bring, or the centrality of the role almost none do in my experience. How do you sustain your
of chair in orchestrating the board. I didn’t fully appreciate culture?
these points myself until I became a director and chair. The val- Warren Holmes One way we stay fresh is by avoiding the dangers
ue comes through relationships. Board members I serve with of routine. A chair who stays around too long creates routine. Our
feel comfortable talking to management and vice versa. Value committee membership is fluid and the committee chairs also
comes from our vantage point one step removed from the busi- change up within four years. Each year we evaluate ourselves by
ness, looking in from the outside. We’re less likely to identify interviewing senior management and directors, looking for ideas
the individual trees that might crash down, but we’re good at to improve how we work together and conduct business. Every
recognizing the health of the forest. Value comes from the range year I learn something and implement substantive ideas that make
of expertise among directors. When the board and management a difference.
are working well together, both will recognize that individual The core of our performance culture is our internal discipline.
members of the board have experience, knowledge and skills It creates the expectation and commitment to our company and
that are unique and can be utilized to improve the overall per- our performance in the service of our company above personal
formance of the company. interests. Board chairs often get uncomfortable with a discussion
about performance at the board and director levels. Many boards
David Anderson As chair, you’ve not left your board’s effective- need term or age limits because they lack the backbone necessary
ness to chance. What are you doing to demonstrate gover- to renew the board on a regular basis. Self-preservation wins out.
nance value to management and your stakeholders? Our constant effort to refresh the board reinforces our focus on the
Warren Holmes A lot of thought has gone into determining the business and our drive for shareholder value. It’s this business fo-
skill sets required to make a good mining board. We’re known for cus that is the basis of our enjoyment in being directors and makes
emphasizing industry skills and knowledge. One half of the board it all worthwhile.
has extensive background in the business and its operations. This
is complemented with country knowledge where we operate and David W. Anderson, MBA, PhD, ICD.D is president of The
organizational skills such as finance, legal and HR. Anderson Governance Group in Toronto, an independent
As a board, we believe in board renewal. It’s not just me, or a advisory firm dedicated to assisting boards and manage-
committee chair, but the board itself is committed to continuous ment teams enhance leadership performance. He advises
renewal. With a 10-member board, we change out one person directors, executives, investors and regulators based
every year on average, to have complete turnover each decade. on his international research and practice. E-mail:
Without resorting to term limits or age limits, our annual turn- david.anderson@taggra.com. Web: www.taggra.com

Spring 2017 | Listed