Rio Tinto has published a damning 85-page document that catalogues an institutional culture of racism, sexism and bullying. More than 20 female employees said they were the victims of rape, actual or attempted, or suffered other sexual assaults.
Elizabeth Broderick’s report for Rio makes painful reading for bosses at the Anglo-Australian mining giant. But chief executive Jakob Stausholm has good reasons for full disclosure and acceptance of the recommendations.
Lifting the lid on mining’s toxic culture distances this newish boss from Rio’s past faults, including the destruction of a 46,000-year-old Aboriginal sacred site. The previous chief executive left in the aftermath of that scandal.
Poisonous corporate cultures extend from California to Hangzhou. Travis Kalanick stepped down from the helm at Uber after an inquiry into its workplace ethos. Alibaba, the Chinese tech group, vowed changes after a sexual assault scandal.
Mining, a male-dominated business operating in tough and far-flung environments, has so far avoided searching scrutiny of its workplace culture. Submissions to a Western Australia parliamentary inquiry showed sexual harassment of women in “fly in, fly out” mining camps is commonplace.
But movements such as Black Lives Matter and #MeToo are having a wide impact across business. Ethical funds are an associated agent of change. Money talks and ESG funds control $2.7tn worth of it, according to Morningstar.
Culture change in mining will be a project as lengthy as opencasting for copper. Together, Rio and peer BHP employ 125,000 people, more than the British army. Women make up 30 per cent of the workforce at BHP, which is aiming for gender parity by 2025. Four-fifths of Rio’s workforce is male.
Evidence is mixed on financial impacts from misconduct scandals. A Harvard Business Review study showed shares rose in a third of cases, pointing to investor indifference. In contrast, one academic survey found that instances of sexual harassment raised labour costs and reduced investor returns.
Stausholm holds some helpful cards. As a relative industry outsider, he is in a good position to push for change. Reform is easier for trouble shooters than it is for new hires at thriving businesses. Rio’s shares are lagging behind those of peers. The workers in outback mining camps may shrug at snakes, crocs and venomous spiders. But they fear redundancy as much as anyone else.
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This article was changed after online publication to correct the assertion that Rio’s chairman has left. He is stepping down in May.