RMIT experts available for comment on Rio Tinto resignations

RMIT experts available for comment on Rio Tinto resignations

Experts from RMIT University are available to talk about the resignation of Rio Tinto's CEO and top executives, saying they hide longstanding governance problems and years of institutional investor inaction.

Warren Staples (0407 584 564 or warren.staples@rmit.edu.au)
Topics: corporate governance, business ethics, CSR, business and government relations

"Rio will hope this is a circuit breaker.  But Rio Tinto boss JS Jacques is walking away with a generous financial package. So, whilst he has paid a price as the public fall guy - he has been paid to walk the plank."

"Native Title and other mining legislation are critical for bringing Indigenous land owners to the bargaining table before a mining operation begins. However, once the operation is underway they become dependent and when a miner wants to further develop an existing mining site, we've seen they will do that and just hope to ride out the negative PR storm.

"While shareholders might vent publicly, they don't exit profitable firms. Research shows investors largely refrain from using their voice in trying to influence firms to seriously tackle social issues.

"I doubt shareholders will exit Rio even while other highly significant sites remain under threat."

Warren Staples is a Senior Lecturer in the School of Management at RMIT University whose research focuses on corporate governance, corporate social responsibility, business ethics and business and government relations.

Andrew Linden (0401 086 326 or andrew.linden@rmit.edu.au)

Topics: corporate governance, business ethics, CSR, corporate strategy, strategic communication, country expertise: Germany/EU   

"This is a pyrrhic victory for institutional shareholders. They have three high profile executive heads on pikes, but the Juukan Gorge is gone.

“While it looks like shareholders are getting their way and holding senior executives to account, what we haven't seen is institutional shareholders taking a principled stand much earlier.  

“Rio has a chequered history in indigenous relations, labour relations and foreign bribery, and extensive lobbying and interference in politics. It was even blacklisted by Norway's sovereign wealth fund for a decade. 

“For years Australian institutional shareholders have loved Rio Tinto for its high and consistent dividends and have not exited the company despite its poor governance track record.

“The mining industry invented the ‘social licence to operate’ concept to convince governments and the community they could regulate themselves but have again fallen short."

Andrew Linden is a PhD researcher on German corporate governance and a sessional Lecturer in RMIT's School of Management in corporate governance, global business and business communication.

 ***

For media enquiries, please contact RMIT Communications: 0439 704 077 or news@rmit.edu.au

 

 

11 September 2020

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11 September 2020

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