The Rio Tinto Limited (ASX: RIO) share price is up around 2%, after news that that Chair Simon Thompson is going to step down.
Rio Tinto Chair won’t seek re-election
The destruction of the Juukan Gorge rock shelters at the Brockman 4 operations in Australia has caused a lot of damage. It destroyed an important aboriginal heritage site. Rio Tinto’s reputation has been hurt. The CEO of the company has gone. The chief executive of iron ore left. Rio Tinto’s group executive of corporate relations has gone.
Now the Chair has decided that he won’t seek re-election as a non-executive director at the 2022 annual general meetings (AGMs). A few months ago Mr Thompson said that there was stakeholder concern that a lack of individual accountability undermines the group’s ability to rebuild trust and to move forward to implement the changes that had been identified. He also said that traditional owners must be treated as equal partners.
In part of today’s announcement, Rio Tinto Chair Simon Thompson said: “I am ultimately accountable for the failings that led to this tragic event.
“Over the past eight months, we have engaged extensively with investors, government, civil society, Indigenous leaders and, most importantly, Traditional Owners to learn the lessons from Juukan Gorge. We have take decisive action to address the weaknesses identified in our risk management and governance, while also acknowledging the need to improve our work culture to rebuild relationships.”
Not only that, non-executive director Michael L’Estrange, will retire from the board at the conclusion of the 2021 AGMs to reduce his workload.
Senior independent directors Sam Laidlaw and Simon McKeon said: “The board accepts Simon’s decision and is grateful that he has agreed to provide an important period of stability and support for Jakob and the new executive team ahead of the AGMs in 2022. This will allow an orderly process for the appointment of our new Chair and other key Board members. The Board wishes to thank Simon for his commitment and continuing leadership during this challenging period for Rio Tinto.”
This has been a painful disaster for the traditional owners of the land and now many individuals at Rio Tinto have paid for it with their jobs there. I’m not sure if this will be the end of the matter for Rio, but the leadership taking the fall is probably the right thing to do.
In terms of looking to buy Rio Tinto shares, I would be cautious because we seem to be at the top of the iron ore cycle, which normally isn’t the right time to buy commodity businesses.
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