BHP recommends against activist board position

When mining heavyweight BHP Billiton (ASX: BHP) holds its annual general meeting in Perth on Thursday, board nominee Ian Dunlop will warn shareholders that the company must make the issue of climate change a key priority moving forward, having stated that it is one of the biggest “strategic risks” the company is facing.

The miner’s board has recommended against his election, given that he is regarded as a single-issue candidate who wouldn’t add to the board’s effectiveness. Dunlop recognises that he is unlikely to win the position but felt the issue had to be raised.

He will attempt to convince shareholders that BHP should stop, or at least greatly reduce, many of its mining operations moving forward and start to focus on the issue. Following extreme weather events and record high temperatures, he said “there comes a point when you have to say: we have to stop what we’ve been doing.”

Foolish takeaway

Shares in the miners, including BHP, Fortescue Metals Group (ASX: FMG) and Rio Tinto (ASX: RIO) have all delivered strong returns in recent months as confidence returns to the industry regarding ongoing demand from China. However, there are still strong headwinds facing the sector, and investors must consider whether they want to expose their portfolio to such risk.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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