Rio Chair to Exit After Failings on Aboriginal Site Blasts

Rio Tinto Group Chairman Simon Thompson became the latest high-profile casualty of the company’s destruction of an ancient Aboriginal site, saying that he’s accountable for the failings that led to the incident.

The fallout from Rio’s actions at Juukan Gorge in the Pilbara iron ore region of Western Australia last May has already led to the departure of former Chief Executive Officer Jean-Sebastien Jacques and other senior executives. Thompson had also come under investor pressure to step down.

Rio Chair to Exit After Failings on Aboriginal Site Blasts

“While I am pleased with the progress we have made in many areas, the tragic events at Juukan Gorge are a source of personal sadness and deep regret, as well as being a clear breach of our values as a company,” Thompson said in a statement. “As chairman, I am ultimately accountable for the failings that led to this tragic event.”

Thompson will not seek re-election at the miner’s annual meeting next year, while another director, Michael L’Estrange, who led an internal review into the destruction at Juukan Gorge, will leave in the coming months. The departure of three executives and now the chair and another board member highlights the rise of socially conscious shareholders, who are scrutinizing how companies interact with society at large.

That reality was acknowledged by Rio’s incoming CEO. Jakob Stausholm, who was appointed in December and shuffled his senior management ranks last month, says he wants to re-establish the company as a trusted partner for host communities. Thompson’s decision comes as Rio also faces fresh problems on a different continent over the development of a huge copper mine in Arizona involving Native American land.

“The decision today allows for a fresh perspective and a renewed board focus on repairing and building stronger links with indigenous communities in the countries in which Rio operates,” said Debby Blakey, CEO of $37 billion pension fund Hesta. “Rigorous board oversight and governance will be crucial to achieving future progress in this regard.”

AustralianSuper, the largest pension fund in the nation where Rio generates the bulk of its profits, in December called for “changes of personnel” on the firm’s board following its response to the Juukan Gorge incident.

Thompson in August initially backed Jacques and others leaders, saying they were the right executives to lead Rio’s effort to rebuild relations with Aboriginal Australian communities, only to reverse course weeks later under a barrage of pressure from investors. After a decision to replace the executives, Thompson said in a September interview he believed he should remain in the post to guide the tasks of appointing a new CEO and overhauling the miner’s procedures.

Juukan Gorge exposed Rio’s “blindness” on heritage protection, said Joe Dortch, a Perth-based spokesman for the Australian Association of Consulting Archaeologists Inc. “Across the company there’s a recognition that there was that blindness,” he said, adding that Rio was showing a readiness to communicate better and be more open in its dealings with indigenous landowners.

A spokesman for the PKKP Aboriginal Corporation, which administers the traditional lands that encompass Juukan Gorge, declined to comment on Rio’s announcement.

Senior independent directors Sam Laidlaw and Simon McKeon will lead the search for a new chair, the London-based company said.

Thompson, previously an executive director at Anglo American Plc, was appointed chairman in 2018 having previously served on the board since 2014. He was selected after shareholders rejected a plan to install Mick Davis to the role.

Rio shares rose 0.8% in London, after hitting a record high Tuesday. Despite the fallout from the destruction of Juukan, Rio has reported bumper profits and last month said it was paying a record $9 billion in dividends.

©2021 Bloomberg L.P.

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