Successful, sustainable and resilient mining companies require diverse and dynamic boards. As social, political and geographical events change the way firms operate, change and adaptability are of the utmost importance.
This quarter, Rowan Phendler, interviewed Dominic Barton, Chairman, Rio Tinto, Kaisa Hietala, Independent NED, Rio Tinto, Penny Bingham-Hall, NED Fortescue Limited, Rebekah Cheney, Climate Governance Lead, Deloitte, and Rohitesh Dhawan, President and CEO at ICMM, to discuss the key changes companies can make to diversify their thinking, utilise professionals from outside the sector and become more resilient.
Sourcing board-level professionals from alternative industries
While the role of a board isn’t fundamentally changing, the skillsets expected to oversee functions, develop and deliver a strategy and maintain governance is rapidly changing.
From Environmental, Social and Governance (ESG) to artificial intelligence (AI) and everything in between, boards need to have a clear grasp on social, political and technological advancements – something that’s easier said than done. Changing business needs requires different capabilities, and where boards have been used to relying on professionals all from the same industry, this strategy is no longer viable, particularly as talent pools become smaller.
Opening up the recruitment pool to include professionals from outside the traditional mining or mining-associated industries, and focusing more distinctly on skillset, can provide a wealth of opportunities. Those from other industries can provide new ways of problem solving, new points of view as well as their technical/role specific expertise. They have the potential to provide resources and ideas that may not normally be considered by those who have been in mining for the majority of their career and haven’t had the exposure other professionals have had.
Kaisa Hietala, joined Rio Tinto’s board in March 2023, having spent the majority of her career in oil and gas. It was having non-mining industry experience, her skillset and ability to challenge the status quo that made her an ideal board member.
“[Kaisa] had no experience of the mining sector, but a lot of experience in renewables through her work at Neste, and that was exciting. Her knowledge and experience are critical to what we need to achieve as the business moves ahead. Being able to challenge orthodoxies and mindsets is also important. That’s another skill that Kaisa brings from her role as an activist on the Exxon Mobil board.”
Dominic Barton, Chairman, Rio Tinto
Artificial intelligence and governance
While boards can’t add a new board member for every emerging skill required, companies do need to be clear on their priorities both collectively and individually. Working in partnership with external organisations, professionals and advisory groups can help fill any knowledge gaps and ensure the firm remains agile.
Where mining is a capital-intensive industry that works around the clock, utilising new technologies such as AI could have some distinct advantages to operational efficiency, reducing waste, becoming more sustainable, and of course, improving the bottom line.
The use of AI in any industry is still very much in its infancy, however, as the technology continues to grow, so will rules and regulations around its use. By developing an internal governance program to ensure it is as inclusive as possible without adopting any biases, this will help advance its use within a company and work alongside future laws and regulations.
“…regulation on AI is increasing in many jurisdictions. Boards need to be prepared for the introduction of soft law expectations with a global reach too.”
Rebekah Cheney, Climate Governance Lead at Deloitte, Australia
Incorporating sustainability and Indigenous groups
The majority of mining companies have set themselves ambitious targets to reduce emissions, increase diversity, equity and inclusion as well as freshwater usage, just to name a few. To achieve these targets and identify new opportunities, oversight and guidance procedures will need to be implemented and offers boards an excellent opportunity to foster a company-wide sustainability mindset. Board members from outside the industry can play an important part in this as a new voice in the company and provide additional insight from prior experience where they may have come from firms that are further along in their sustainability journey.
“When you’re used to looking at these challenges through the lens of different industries, you can start to ask: ‘why can’t we do that here too?’”
Penny Bingham-Hall, NED, Fortescue Limited
Sustainability goes hand in hand working with Indigenous groups and can be included in all business plans right from the outset. As Cheney states, “Embedding sustainability and Indigenous governance into business plans, not just because they’re the right thing to do but because they make economic sense too can bring huge opportunities.”
Emerging technologies, sustainability, governance and looking outside of mining all feed into each other. By working with those from outside the industry, boards can learn far more easily and quickly about how other companies and industries utilise technologies and data to create new opportunities and develop mutually beneficial business and community relationships.
Remaining curious
No matter how diverse or skilled a board is, the need to remain curious and be open to learning is paramount. There will continue to be new world events, scientific discoveries and emerging technologies, no company can afford to assume things will eventually slow-down and go ‘back to normal’. Change is the new normal, and as our ability to develop and harness technology increases, the more change there will be.
Discover what else our panel had say around on board effectiveness and growth in our white paper.
