JOHANNESBURG (miningweekly.com) – With several major, junior and small minerals and mining services companies debt stressed, folding or in business rescue, former investment researcher Stephen Roper has come up with a longevity and success formula – with diamond consultant Dr John Bristow offering input.

Accountant Roper and geologist Bristow have found that a great deal of problems stem from a lack of robust capital management, poor capital allocation, inadequate financing provision and thin insurance cover.

On discovering that few adequately understand the risks, Roper has founded the new Integrated Thinking Laboratory (ITL), which he heads as CEO. (Also watch attached Creamer Media video).

ITL sets out to contribute to long-term success by integrating businesses optimally as an authorised financial services provider, in the belief that financial services providers should care about the long-term success of clients.

“But the anecdotal evidence is that they don’t,” Roper commented to Creamer Media’s Mining Weekly Online in the attached video interview.

Why it was necessary to care, Roper added, was clear from:
• the Santa Fe Institute calculating the average lifespan of a company to be ten years;
• Innosight reporting that the average tenure of S&P 500 companies had shrunk from 33 in 1965 to 20 years in 1990;
• only 74 of the companies on the S&P 500 in 1957 remaining 40 yeas later; and
• 61 of the companies on the original Forbes 100 of 1917 being no longer in the Forbes 100 of 1987.

Company mortality is rife and lessons need to be learnt from case studies about long-term company success.

“Whether a bank or a mining company, it’s about adopting a more integrated approach to business and analysing and developing a system,” said Bristow.

An understanding of what produced long-term success and a sharing of that message was essential.

“That’s what we would like to do with ITL and our entry point is as a financial services provider,” Roper explained.

ITL was engaging with mining and manufacturing companies and working on several projects, one of which had moved beyond design phase.

This involved the testing of alternatives as well as the feasibility of strategies.

A car made up of different individual best-of-brand parts would not necessarily translate into a car that performed best.

“What matters is how those components interact with one another, and so it is in business and social systems. There are tools and techniques for integrating businesses and it’s our ambition to help share that,” Roper added. (Also watch attached Creamer Media video).

The South African Institute of Chartered Accountants advocates integrated thinking on its website and draws attention to the 2009 King lll report on corporate governance
for South Africa, which includes a recommendation that organisations should issue integrated reports yearly.

It also points out that in 2010, the listings requirements of the Johannesburg Stock Exchange (JSE) were amended to adopt the King III principles on an ‘apply or explain’ basis, which meant that JSE-listed companies were required to issue integrated reports yearly, or explain why they did not do so.

Since then, the Integrated Reporting  Committee of South Africa had been formed to develop preliminary guidance on integrated reporting, so that listed companies could meet their requirements.