In a brief statement released last night, Mount Gibson said Readhead’s resignation was with immediate effect.

Readhead joined the board of Mount Gibson in December 2001 and was appointed as chairman in November last year.

In August, he was replaced by current chairman Geoffrey Hill after a majority vote by the board in which Readhead himself, Tonkin and director Ian Macliver voted against it due to doubts over Hill’s independence.

Readhead’s departure will only escalate concerns over the composition of the company’s board, which has long been a sticking point for Tonkin, shareholders, analysts and more recently, the Foreign Investment Review Board.

The issue of the lack of independent directors on the board is now even more prominent following Macliver’s decision not to seek re-election at last month’s annual general meeting.

The following day FIRB sent Mount Gibson a letter expressing concerns over the company’s corporate governance, which was followed by Tonkin’s resignation hours later.

Within days Mount Gibson’s share price had slumped to a 26-month low of $A1.175.

Tonkin was due to remain at the company for a six-month transitional period but he departed last week after being unable to reach agreement over a termination package.

The departures leave Mount Gibson on the hunt for a new MD plus two independent directors.

The company said it would give consideration to a replacement for Readhead in “due course”

Macquarie Private Wealth downgraded Mount Gibson last month after Tonkin announced his resignation and flagged further departures.

Analysts downgraded Mount Gibson to underperform with a 12-month price target of $1, from neutral with a target of $1.65.

“We believe the MD stepping down is a consequence of disagreements over board independence; the market will likely continue to perceive the board’s track record of addressing this as poor,” Macquarie said.

“Further, we think the risk of more departures is increased, given that the outgoing MD had built and led a longstanding and cohesive management team; in an environment of skills scarcity, this has potential to put at risk operational performance.”

Macquarie noted Mount Gibson was seeking ways to address the issues raised by FIRB.

“We believe MGX doing so swiftly and appointing a capable new MD could see the share price rallying closer to fundamental value,” Macquarie said.

Mount Gibson shares dropped 3c to $1.19 after earlier hitting an intraday low of $1.18.