Will Simon Thompson’s Resignation from Rio Tinto’s Board Help It Rebuild Its Image?

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Summary

  • Simon Thompson, Chairman of Rio Tinto Plc, has decided to step down from the board.
  • Thompson said he was accountable for the company’s call to destroy Australian indigenous sites in a bid to expand iron ore mines.

 

Rio Tinto Plc (LON: RIO)’s chairman and board of director of metals major Simon Thompson has decided to step down, following pressure from investors over the company’s alleged role in the destruction of sacred indigenous sites in Australia. 

A year ago, the company had allegedly blown up Western Australia’s Juukan Gorge caves to expand the mine. The locals of the area have been fighting for years to safeguard the caves, which were of immense archaeological significance and had cultural value for the aboriginals.

Thompson said that he is accountable for the decisions that the company took and would step down after the annual general meeting.

Also read: Rio Tinto (ASX:RIO) Introduces New Executive Team

His decision to put in his papers follows a string of high-profile resignations from the company over the issue. Thompson was chosen as the chairman in 2018 and has said he would not seek re-election in 2022. In September, CEO Jean-Sébastien Jacques, head of corporate relations Simone Niven and head of the iron ore division Chris Salisbury also had resigned.

Also read: Rio Tinto Begins Internal Review of Heritage Management Process

In his statement, Thompson said that the company discussed with investors, government authorities and representatives from indigenous communities to better understand the demolition. He also said that the company has tried to address the problem of risk management by appointing CFO Jakob Stausholm, who moved swiftly on creating a new executive team to win the lost trust of people. Stausholm replaced Jacques, who was forced to quit under immense pressure from investors.

 

Also read: Rio Tinto Inks Power Agreement With Mongolia For Oyu Tolgoi

The Australian Council of Superannuation Investors (ACSI) said that the change in leadership was welcome as its important to hold people accountable for cultural and operational failures. The announcement would help the company to renew their relationship with Traditional Owners, ACSI CEO Louise Davidson said. She also said that investors would want the Board to expand mining operations by connecting more closely with Australian communities and people.

The National Native Title Council (NNTC) too appreciated the announcement but also said that if the company was serious about understanding cultural issues, it would have replaced at least one of the outgoing board members with one Aboriginal or someone who is a Torres Strait Islander.

The NNTC also said it was a step towards right intent and though it was a huge achievement to replace the whole board within six months, but the company would be judged based on the actions they take henceforth.

 

 

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