March 02, 2021

Alchemist 100: Musical Chairs with all of Our Chairs

The Alchemist took the opportunity to catch up with all eight former (and current) LBMA Chairmen, whose tenures have covered the life cycle of the Alchemist from the first edition in June 1995 to the present. We invited them to tell us about the key market developments or their favourite stories from their time as Chair.

Alan Baker | Chairman to June 1997
What’s in a Name?

Perhaps my biggest concern with the introduction of the Alchemist was its name. It was quirky and I was dubious. Its connotations to the medieval image of one seeking to turn base metals into gold didn’t seem to fit with the image of LBMA. What impression would that give and what message did it present to the world? The name was suggested by Jeff Rhodes, Chair of the Public Affairs Committee, who was told by his boss at the time that “it’ll never catch on”. I was expected to introduce it in the Editorial of the first issue (Reaching Out, reproduced on page 4). I suggested it might be the catalyst through which we might turn informed information into gain, but I still wasn’t happy. From 1987 to 1994, LBMA had published a quarterly Newsletter addressing mainly the London market, a kind of club newsletter that ran to all of four pages. By 1994, we were looking to extend membership to the global market and, as part of that effort, a change from the more parochial Newsletter to something more ambitious was called for.

Another concern I had was whether we could attract sufficient contributors, and of the right calibre, to fill an enlarged publication. When I look at what the Alchemist has become, it’s good to see that was something I needn’t have worried about. LBMA at the time was supported by just two staff, Chris Elston, who I had just introduced as our first Chief Executive, and Stella Thompson, the Secretary. That meant that much of the work of LBMA had to be done by the Committee members and, along with our day jobs, how would we manage it? When I look at the 17 members of staff today, what a lot has changed, and how much London and LBMA have achieved because of that.

Looking back over old copies of the Alchemist, one sees that LBMA, then as now, was looking for ways to improve our marketplace. Following work to introduce the International Bullion Master Agreement in 1994, we went on to produce the Bullion Definitions to link bullion transactions to the ISDA Master Agreement in 1997 (see my Editorial in Alchemist 4, June 1996) and so incorporate derivatives into netting – documents I was pleased to find are still in use today. They entailed a lot of work at the time but hopefully have saved a lot more work in conducting business since.

We made the first moves in lifting the veil towards greater transparency with work on the compilation and publication of bullion clearing statistics (see Alchemist 6, January 1997, ‘Clearing Volume in the London Bullion Market’ by Peter Smith) – work that I see continues to be refined to this day.

We had to work with Reuters to extend the gold forward offered (GOFO) rate page with LGLR for gold lending rates, when we had to rely on its platform before the days of websites to publish our statistics. Things have changed. Finally, we organised the first overseas event for LBMA with a debate in Johannesburg on the motion ‘This house applauds the practice of hedging by producers’ (see the article by Sean Russo on Hedging and Finance on page 36). The motion was passed by 66 to 16.

And, as for the name, I’m sure that in the global bullion market of today, the image conjured by the word ‘alchemist’ means only one thing. And I congratulate all of those who have made LBMA and the

Alchemist what they have become, an organisation and a publication that bring the global bullion market together. Or perhaps a more recent definition of an alchemist, as someone who transforms things for the better, is more accurate in this case.

Peter Fava | Chairman June 1997 to July 1999

When I took over the Chairmanship of LBMA from my predecessor, Alan Baker, the Alchemist was a glossy magazine in three colours – gold, blue and black. Susanne Capano had been appointed our first full-time editor. She really started to make it look very professional. LBMA decided to instigate a new class of member the ‘International Associate’ and it was decided that one of the things we could offer our new members was the Alchemist. Susanne asked me if she could improve the copy by using more colours. I agreed that she could, provided that she paid for it out of advertising.

In Alchemist 13, we offered the market the opportunity to advertise business-to-business products. We published Alchemist 14 in February 1999 with five adverts and using multi-colour copy. The Alchemist is now the world-class publication on precious metals.

Martin Stokes | Chairman July 1999 to June 2002

It amazes me now, but I sat on the LBMA Management Committee for all the years from 1989 to 2006, including as Chairman from 1999 to 2002. During those 17 years, the Alchemist evolved from a parish magazine for the London members to a quality publication with an international reach.

There were four major initiatives during my tenure as Chairman, all of which were closely covered by the Alchemist: the engaging of a full-time Chief Executive, standardised documentation, introduction of International Associates/Members and the establishment of the LBMA Conference. We had several very high-class candidates for the post of Chief Executive, but after a series of interviews, it became clear that Stewart Murray was the person for the job (see page 19, Alchemist 17, October 1999). How fortunate we were to have engaged such a knowledgeable, loyal and hardworking man. Over the years, Stewart came to personify LBMA!

For many market participants, the words ‘standardised documentation’ bring on the need for a snooze – indeed, for some, it’s the dullest of topics! However, this initiative was one of the important ingredients in the cement that bound the Association together. Much Committee work and significant input from Allen & Overy resulted in bilateral agreements between members being made virtually redundant, thereby saving significant lawyer time. The record shows that I wrote some prosaic, but important, Alchemist articles to explain the advantages.

The International Associate initiative was sparked by a visit to JP Morgan’s office by an individual from an Australian counterparty. He complained to me, slightly tongue-in-cheek, that his firm had no representation at LBMA.

Over the following years, providing such access and support to counterparties from Ahmedabad to Zurich enabled LBMA to become truly international and to create an interdependence in the bullion market that gives significant support to local regulators. Until 2000, the annual Gold Conference, run by the Financial Times in various European cities, was a professionally run and popular event.

However, it was expensive and not always attuned either to the pulse of the market or to all of its aspects. While I was on a family holiday in Dubai in 1999, I noticed the first-class conference facilities in the Jumeirah Beach Hotel and the rest is history. It was a courageous leap for our small Executive office, but our very first Annual Conference in 2000 was a great success (see review by Susanne Capano, Alchemist 19, April 2000) – opened by Sheikh Mohammad and featuring Clifford Smout of the Bank of England explaining the UK Gold Auction programme (see photograph below). Twenty Conferences later, it’s clear that we made the right decision. As I recall, our outstanding Alchemist editor, Susanne Capano, wrote up the event with great brio, including a picture of a belly dancing demonstration by four LBMA Chairmen!

Julius Caesar and Winston Churchill knew that history would treat them well – for they wrote it! But no fake news here! Over the years, the Alchemist has provided a great forum for LBMA members and others to share their knowledge and to provide analysis of current and possible upcoming market activity. Perceptive and interesting articles have sprung from every facet of the precious metals business. I look forward to reading the next 100 editions!

Simon Weeks | Chairman June 2002 to July 2006

Evolution will always be a key theme for an organisation such as LBMA and it was clear to me during my tenure as Chairman that LBMA needed to evolve from being a London-based trade association into an international body that was at the core of the rapidly expanding global bullion markets. Hand in hand with this expansion came increased demand for international membership, something that LBMA was keen to promote as part of a fully encompassed offering to members.

As the internationalisation of the markets continued, LBMA grew alongside, which meant not just a requirement for larger offices but also a requirement to keep step with good business practice to ensure that members, regardless of where they were based on the globe, were party to the highest of standards. Initiatives included the appointment of five Good Delivery Referees as well as the introduction of Proactive Monitoring of Good Delivery List refiners (see Alchemist 33, December 2003, ‘Refereeing the Good Delivery System’ by Stewart Murray) – thus aiming to ensure that refining standards were both consistently high and universal.

One other area of change that required embracing was the increasingly fast-paced move away from traditional telephone-based trading to electronic platforms. Given the large number of platforms that were keen to provide their services, there was a period when this meant that liquidity was somewhat diluted; however, the markets soon found the most efficient trading routes and we moved onto the next chapter supported by the efforts of the now truly international LBMA (just a shame we never got around to changing the name to reflect this!)

Jeremy Charles | Chairman July 2006 to June 2009

My three-term period as LBMA Chairman coincided with two significant events, both of which had an enormous impact on the bullion industry. The first was the financial crisis, which resulted in the bankruptcy of Lehman Brothers and created considerable difficulties for London market participants around the world. It was thanks to the combined efforts of LBMA, the Bank of England and the industry participants themselves that a secondary crisis was averted in the bullion markets.

However, it was the creation and development of the gold ETF in the early part of this century that significantly increased my personal profile across the bullion industry worldwide (see article by Graham Tuckwell on page 21). My involvement in the development of these investment products was probably the reason that I was asked to become the LBMA Chairman in 2006.

This innovation connected LBMA to the world’s major stock exchanges, provided a huge boost to the London bullion markets and created a considerable number of jobs in the process.

Much has been written about these products in the Alchemist and there is no doubt in my mind that their creation changed the global bullion market landscape more than any other development over the last 50 years. For a fuller account of Jeremy’s time as Chair as well as his wider career in the market, see Alchemist 67, July 2012, ‘A Golden Future for the Bullion Market’, Editorial written to mark Jeremy’s retirement.

Kevin Crisp | Chairman June 2009 to June 2011

What a pleasure to turn the clock back a decade and recall friends and colleagues and their contributions to LBMA and the Alchemist. Scrolling through so many editions and excellent articles, my takeaway from 2009 to 2011 was the explosive increase in workload for the Executive and Committees.

Our agendas grew, meetings lengthened and the LBMA Executive needed to expand. The Management Committee expanded too and moved to a two-year term, while our membership and Good Delivery List refiner base grew alongside. Our foundations were strengthened by enhancing the Proactive Monitoring and availability of Reference Materials as we embraced new technologies such as electronic weighing.

We were on the cusp of what became a regulatory tsunami. REACH is indelibly etched on my memory, but there was much more as financial market reforms, environmental issues, supply chain security, taxation and more required close attention. Many of these financial and regulatory changes were summarised by Barbara Ridpath in her speech ‘Regulation: Financial Reform & the Gold Market’ at LBMA’s first ever Bullion Market Seminar (see the programme agenda opposite) in conjunction with the Biennial Dinner, on 25 November 2010. (You can read Barbara’s speech in Alchemist 61, January 2011.)

What we saw as the LBMA ‘Crown Jewel’ was celebrated in Timothy Green’s History of the Gold Good Delivery List. Commercialisation entered our vocabulary as we looked at LBMA data sets and established our first business relationships. We created a Commercial Director role filled by Ruth Crowell. Co-operation across the wider precious metals universe and outreach to a range of institutions East and West added to the workload. Conferences in Edinburgh and Berlin provided platforms for wider discussion and debate. All of this needed to be communicated and explained to our members.

Alchemist was a critical tool in those efforts, and this remains true a decade later.

David Gornall | Chairman June 2011 to July 2014

Each year, Martin Stokes used to pay me a visit to ask for a signature of support to remain a member of LBMA’s Management Committee. It was one of the few occasions that he ever bought a drink!!!

I didn’t know too much about LBMA, apart from when I attended the inaugural Biennial Dinner with Bob Guy and guest speaker Robin Leigh Pemberton, BoE Governor. I was inquisitive that day I met with Martin and asked who, why and what was LBMA all about. He turned and said, “You should stand for election yourself.” That day I secured the support required, and two weeks later I stood for election and lost!

The following year I had better luck having been co-opted, joining the Management Committee in 2005, subsequently becoming Vice Chair in 2010. I took the Chair in June 2011, following on from Kevin Crisp. The first major change witnessed that year was the launch of Responsible Sourcing. Kevin and Ruth had built most of the foundation stones of the Responsible Sourcing project in the previous years and, in early 2012, the LBMA Responsible Gold Guidance was launched (see Alchemist 65, January 2012, ‘Regulation Update’ by Ruth Crowell). Later that year, the proficiency testing scheme for gold fire assayers became live.

When the CEO Stewart Murray decided to retire, the next task was to appoint a successor. Ruth Crowell was duly appointed at the end of 2013 and took office in January 2014. Following Ruth’s appointment, later that year, we welcomed our first in-house legal counsel, Sakhila Mirza.

As the responsibilities of the Management Committee changed along with the market, work began on drawing up the new governance system, which would result in the appointment of the first independent Non-Executive Directors. With a new team came new ideas along with new initiatives. The interaction of the CEO directly at the OECD placed LBMA at the centre of the Responsible Sourcing initiative. Now in its ninth year, we will see the Responsible Gold Guidance version 9 launched in 2021.

The final days of my tenure saw the introduction of the new LBMA Silver Auction. In late April 2014, I was sitting at home watching a film, it was around 11pm, and I was paying absolutely zero interest to emails or social media and so didn’t realise what was about to unfold. My daughter was scanning her Facebook page and told me that Ruth had just instant messaged her asking if I could call the Vice Chairman as a matter of urgency.

The next day it was announced that Deutsche was giving notice to resign its Gold and Silver Fixing seats, such that from 15 August 2014, this would leave just two members of the London Silver Fixing.

The following day, in late April 2014, we began the task of creating a new daily price mechanism to take effect in three months’ time. As I had already decided to stand down by the next AGM in June, the task was left to Ruth, Sakhila and my good friend, the late, great Jon Spall (see obituary in Alchemist 93, April 2019, ‘A Man for all Seasons’), to complete.

To avoid a gap that could create market disruption, the whole process of creating the LBMA Auction could not overrun the 77 working day deadline. Sakhila penned a great Alchemist article covering this particular journey (see Alchemist 77, April 2015, ‘London Precious Metal Prices: Raising the Benchmark’).

Grant Angwin | Chairman July 2014 to September 2016 (and Co-Chair with Paul Fisher from September 2016 to January 2017)

At the LBMA Biennial Dinner at Goldsmiths’ Hall in 2010, I was fortunate enough to sit next to an industry great – Steve BrantonSpeak. Halfway through the event, he turned to me and said, “You should join the Management Committee.” I will admit that I didn’t think he was serious and neither did I take him seriously.

It wasn’t until June 2011 at an IPMI meeting that Kevin Crisp (then Chairman) and Ruth Crowell (then Deputy CEO) repeated the same words. This time, I thought they had had one too many, but 24 hours later, at the AGM, I was scrambling to get a Proposer and Seconder in order to secure a place on the Management Committee, and to my surprise, Simon Churchill and David Gornall stepped forward. Little did I know that four years later, I would become the first and, probably, the last Chairman from the Full Membership and a non-financial/trading organisation.

In my first Editorial for the Alchemist (see Alchemist 76, January 2015, ‘A Baptism of Fire’), LBMA was in the thick of internal changes and precious metals were facing unprecedented regulatory scrutiny. Discussion had commenced to change the governance of LBMA. The move from the London Fixes to independently run auctions, initially with silver, and then followed by the remaining metals, was a work in progress. Work was also beginning on the Global Precious Metals Code, which was successfully launched after my period as Chair in May 2017.

The Management Committee became the Board, with an independent Non-Executive Director (NED) as Chair, as well as another NED joining the Board, with the option of adding a third NED. To ensure continued representation from the membership, there would be three members from the Market Marker category and three members from Full Membership category. The management team was further enhanced with the addition of Neil Harby and Ed Blight as Chief Technical Officer and Chief Financial Officer respectively.

Further strengthening occurred, with the addition of support to all the Executive Committee members, thus ensuring that LBMA would maintain its pre-eminent position as the ‘world’s independent authority and standard setter’. Throughout all these upheavals, we continued to press forward with improving the Responsible Gold Guidance and development of the Responsible Silver Guidance. Not necessarily the easiest of tasks as you need to balance external expectations with industry realities.

The biggest change in the governance of LBMA occurred in 2016; when the introduction of an Independent Chairman and Non-Executive Director occurred. This was the beginning of a journey and not the end point. This change was driven by the misadventures of financial institutions and the continuing push for a more transparent industry. I doubt LBMA will have to wait nearly 30 years to enact the next major change.

Paul Fisher | Chairman September 2016 to present (and Co-Chair with Grant Angwin from September 2016 to January 2017)

Since I became Chair of LBMA in 2016, the world of private business has changed. Increasingly, the pressure is on all organisations to justify their social licence to operate. That is being reflected in issues as varied as gender and racial diversity, environmental impact, including climate change, and taking care of employee mental health. One might have expected the 2020 pandemic to divert such attention elsewhere, but in some respects, it has become even more focused. In the past, businesses might have complained that this agenda simply threatened to add unnecessary costs to production, adversely affecting the economy. But, increasingly, these ‘social’ issues are being treated as pro business.

It turns out that the most successful companies have the most diverse boards and the most engaged employees, and that the companies that generate high ESG scores (environmental, social, corporate governance) generate higher returns over the medium run, not lower.

The transition of the economy away from carbon emissions is creating huge business opportunities. These considerations have become as important to the precious metals industry as everyone else and, I am pleased to record, are increasingly being embodied in LBMA standards and codes. Back in 2016, sustainability was barely mentioned at our Annual Conference in Barcelona, by the 2019 Conference in Shenzhen, as well as at the Assay & Refining Conference, it had become a dominant theme, (see Alchemist 93, April 2019, ‘Refining in the Precious Metals Sustainability Chain’).

Perhaps the industry has not always had the best track record. It is undeniably energy intensive; in the wrong hands, it can be highly polluting and exploitative; and its financial markets, at least, tend to be male-dominated. But, thinking constructively, that means a great opportunity for positive change, for example, through the potential for reduced energy costs, improved access to talent and important contributions to new sustainable technologies.

We have a chance, collectively, to ensure that precious metals become part of the solution, rather than being seen as part of the problem, and I hope that’s the direction we continue to follow.