Mellier’s replacement is striking a different tone than his predecessor
Philippe Mellier (pictured) was always an odd choice to head De Beers—he was not just the first outsider to serve as CEO, but he came from the transportation business and had no experience in either mining or marketing. What he did have was an impressive résumé, with extensive experience heading large organizations. (The division he led at rail transport company Alston oversaw $8 billion in turnover, which is more than De Beers does.) When then-chairman Nicky Oppenheimer picked him, he said he wanted a “fresh pair of eyes” to guide the company. His appointment followed that of another outsider, Cynthia Carroll, to head Anglo American. (She is also now gone.)
Mellier’s tenure was marked by tremendous change and turmoil. In the five years he presided over the organization, Oppenheimer’s family sold its shares to Anglo American, De Beers transferred sales to Botswana, the company settled its U.S. antitrust issues, and it decided to move from its longtime home on Charterhouse Street. Amid all this, the bottom fell out at parent company Anglo American, banks fled the industry, and the market in Asia crashed and burned.
For a while, Mellier was considered something of an Anglo American corporate star, always delivering good, if occasionally volatile, results for the parent company. (Even after tumultuous 2015, De Beers still posted $571 million in earnings.) In the trade, though, sightholders felt they weren’t sharing in the bounty. Last year saw widespread uncertainty in market, bringing it to the edge of disaster. Mellier felt unfairly blamed for this, and the company did cut back drastically last year. Now the market is, if not completely back to health, at least experiencing something resembling normalcy.
As CEO, Mellier made a series of bold moves, although the jury is still out on many of them. De Beers shut down the Snap Lake mine in Canada. It opened a grading lab and secondhand buying service. It changed the criteria for sightholders, requiring clients to have their businesses audited and placing a greater emphasis on online auctions.
His departure had been rumored for a while, after his name surfaced as a candidate to head Air France. (He didn’t get that job.) Still, while many sightholders were not always big fans of Mellier, some winced at the prospect of a new CEO. After all the turmoil last year, they felt they had arrived at something of an understanding with Mellier. They dreaded having to go through that with a new CEO.
That won’t happen with Bruce Cleaver. A button-down, hyperrational former lawyer with an applied mathematics degree (who is on Twitter), he has always been well regarded, and when he left De Beers for Anglo six months ago for what turned out to be a short-lived sojourn, some considered it a loss.
In an interview he gave for De Beers’ website following his appointment, Cleaver is already striking a different tone than his predecessor, specifically addressing De Beers’ sometimes-rocky relations with its clients. “Our sightholders are core stakeholders to De Beers,” he said. “If we succeed, they succeed.” By contrast, Mellier notoriously once said he was “not responsible” for his customers’ margins. Cleaver also says several times that De Beers “is a business of relationships”—language that also had been very much missing over the last few years.
Bruce Cleaver understands De Beers, the diamond industry, and the challenges both face. He does not have a fresh pair of eyes. But that may just be what the industry needs.
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