Damning report on Rio shows need for all boards to do more

A new report documenting widespread sexual harassment, racism and bullying at Rio Tinto has revealed gaps between the company’s leadership team and the reality on the ground. It highlights the question: How can directors really know what’s going on in their organisations?

A report published in February has revealed that sexual harassment, bullying and racism are endemic across Rio Tinto’s global workforce. Everyday Respect: Report into Workplace Culture at Rio Tinto is an independent publication that marks the culmination of a review that began in March 2021. It was led by former Australian Sex Discrimination Commissioner Elizabeth Broderick AO, who surveyed more than 10,000 of Rio Tinto’s 45,000 employees.

The purpose of the review is to enable Rio Tinto to better prevent and respond to harmful behaviours in the workplace. It appears to have its work cut out. Over the past five years, 48 per cent of staff have experienced bullying. Out of the 35 countries where Rio Tinto operates, bullying rates were highest in Australia (52 per cent) and South Africa (56 per cent).

Twenty-one women reported actual or attempted rape or sexual assault, and 28.2 per cent of its female employees have experienced sexual harassment at work. Sexual harassment was also experienced by 6.7 per cent of men. Racism was common in many areas, and disproportionately affects Aboriginal or Torres Strait Islanders, with almost 40 per cent of Indigenous men and 31.8 per cent of Indigenous women experiencing it.

Employees also reported that harmful behaviour by serial perpetrators is often an open secret, with little accountability for senior leaders and so-called “high performers”. In short, there was a lack of psychological safety at a company that holds itself to the highest possible standards regarding physical safety. Rio Tinto has since acknowledged the need for an equal focus on both.

“For me, it was not the people on the floor who behaved inappropriately, but my superiors and managers; people with power,” said one employee, on condition of anonymity.

“As a senior woman, I complained about sexually harassing behaviours being inflicted on younger women. Nothing happened. The harasser was promoted and the women left,” said another.

Deeply disturbing

Rio Tinto CEO Jakob Stausholm said that he felt “shame and enormous regret” to have learned the extent to which harmful behaviours were occurring at his company.

“The findings of this report are deeply disturbing to me and should be to everyone who reads them,” said Stausholm when the report was released. “I offer my heartfelt apology to every team member, past or present, who has suffered as a result of these behaviours. This is not the kind of company we want to be.”

Australia’s second-largest miner has pledged to implement all report recommendations, which include a commitment from the company’s leadership to create safe, respectful and inclusive working environments, prevent harmful behaviours and better support people in vulnerable situations. It will also focus on increasing diversity, ensuring the company’s camp and village facilities are safe and inclusive, and making it as easy and as safe as possible for employees to call out unacceptable behaviour.

Broderick said that despite the alarming findings, reduced confidence in Rio Tinto is unjustified. “By proactively commissioning this study, one of the largest of its kind within the resources industry, it demonstrates a very clear commitment to increased transparency, accountability and action. The high levels of confidence among employees that a significant impact can be made in the next two years are an encouraging sign that change can happen.”

Boards must do more

Broderick says it is clear that new approaches are needed to solve the issues highlighted by the report. Part of this requires senior leaders and directors doing more than they have in the past to stamp out problematic behaviour.

“While the findings of Elizabeth Broderick’s research are confronting, it is important that this report has been made public and that Rio’s CEO Jakob Stausholm has taken responsibility for the failings, as well as giving a commitment to implement all the report’s recommendations,” said Australian Council of Superannuation Investors CEO Louise Davidson AM GAICD.

Similar failures of leadership, systems and processes along with deficits in management capabilities were revealed in November 2021, following the publication of Set the Standard: Report on the Independent Review into Commonwealth Parliamentary Workplaces. The review by Sex Discrimination Commissioner Kate Jenkins GAICD also exposed shocking rates of bullying and sexual harassment.

Boards must act now to shift the conversations about sexual harassment in the workplace to action, says Sally Bruce GAICD, CFO and COO of Culture Amp and a non-executive member of the Chief Executive Women board. “I hope we are now seeing the conviction to stay the course to change the cultural and organisational norms which have let workplace sexual harassment go unchecked for so long.”

Harassment is a safety issue

Boards have a positive duty to prevent harassment and the report reinforces that this is a safety issue, according to James Fazzino, chair of Tassal and a board member of the Champions of Change Coalition. “You have to understand what harassment means in your organisation — which means you have to get out of the boardroom to understand it, because clearly that message has not been given up within the organisation.”

Champions of Change Coalition member and board member Andrew Stevens, believes that for directors to ensure they are getting the full story, sexual harassment needs to be treated as a workplace health and safety issue and included in the organisation’s risk register. “Any director who still thinks sexual harassment is not an issue of concern for their organisation is not asking the right questions, and most likely is not receiving adequate reporting from management.”

He adds that directors should ensure that all reports of alleged sexual harassment, whether from those impacted directly or from bystanders, are reported to them in full. “Like all whistleblower reports, all reports alleging sexual harassment should be reported in full at the board.”

Stevens notes that the prevention of sexual harassment must be regarded as a leadership priority and organisations should have well-understood action plans in place for early intervention. “The board should also require regular and complete reporting of all incidents and the actions taken and the organisation’s response, including timeframes and consequences for offenders.”

AICD resources

The Champions of Change Coalition has issued recommendations on how organisations can prevent and respond to sexual harassment. Disrupting the System: Preventing and Responding to Sexual Harassment in the Workplace outlines five critical steps:

1. Elevate prevention and early intervention as a leadership priority
2. Treat sexual harassment as a workplace health and safety issue
3. Introduce new principles on confidentiality and transparency
4. Inform, empower and expect everyone to speak up
5. Listen to, respect, empower and support those impacted

Access the Rio Tinto report here