HONG KONG (Reuters Breakingviews) - Rio Tinto’s job recruitment ad is getting some unhelpful input from Canberra. Australia’s treasurer wants the miner’s next chief executive and the majority of its board to be Australian, after Frenchman Jean-Sebastien Jacques stepped down over the destruction of an Aboriginal site. Cultural sensitivity is a priority, but the goal can be achieved in other ways. Shareholders deserve the best boss Rio can find.
There are undoubtedly strong homegrown candidates available to replace Jacques, and they should be considered. At the same time, it is also not a foregone conclusion that every Australian executive will necessarily be more attuned to the issues surrounding Indigenous peoples. The $107 billion company also depends heavily on China for exports, so someone well-versed in that culture might be valued, too. And two-thirds of its shareholders are outside the country, making international nous relevant.
The Juukan Gorge rock shelters fiasco cannot entirely be pinned on Rio’s lack of Australian influence either. For one thing, the move to blast them was cleared by Australian courts. The company also had five Australian citizens on the board and four on the executive committee. Rio says 40% of its top 80 managers are locals. The lack of Aboriginal managers may have been the larger issue, one the company is now devoting $50 million to address.
Instead of properly diagnosing the problem, politicians are using this episode as an opportunity to push for dual-listed, London-headquartered Rio to become more Australian, like rival BHP. Restricting the field of CEO applicants by nationality, however, potentially jeopardises the company’s profitability. The government has a vested interest in that outcome, too. Rio is one of Australia’s biggest corporate taxpayers.
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