Rio Tinto’s chairman Simon Thompson will resign within the next year in response to investors’ revolt over the mining company’s destruction last year of a 46,000 – year – old sacred indigenous site in Western Australia.
The Anglo-Australian miner said on Wednesday that Thompson, a Briton, would not seek re-election at the company’s annual meetings, scheduled for April and May 2022, and that it would begin a search for a successor.
Thompson’s decision to step aside followed a storm of criticism of the board first decision not to dismiss any of the executives responsible for blasting two ancient rock defenses at Juukan Gorge in May 2020 – an incident that provoked a global backlash against Rio.
Pressure from Australian pension funds and other investors forced Departures by former Rio CEO Jean-Sébastien Jacques and two other senior executives in September last year.
However, Rio revealed last month that Jacques was allotted 20 percent salary increase in 2020, despite the cave explosion scandal, drew renewed accusations of lack of responsibility on the part of the miner.
Thompson said in a statement on Wednesday that he was “ultimately responsible for the shortcomings that led to this tragic event” at Juukan Gorge, which overshadowed Rio’s other successes in 2020, including largest dividend in its history.
“The tragic events at Juukan Gorge are a source of personal grief and deep remorse, as well as a clear violation of our values as a company,” he added.
Thompson, a former investment banker and senior executive at the Anglo American executive, joined Rio’s board in 2014 and became chairman four years later.
Another Rio director, Michael L’Estrange, led one controversial board investigation into the destruction of the Juukan Gorge as critics said they largely acquitted the management of the debt, will retire before the company’s annual meeting in London next month.
It was L’Estrange’s report and the board’s first decision to impose financial sanctions only on the managers responsible for the explosions that triggered the shareholders’ backlash.
With Rio from London but earning the bulk of its money in Australia, the company is expected to come under pressure to appoint an Australian as its next chairman.
“The resignations of Mr Thompson and Michael L’Estrange provide an opportunity to increase the Australian profile at board level,” said Ian Silk, CEO of AustralianSuper, the country’s largest oversight fund.
Former Centrica CEO Sam Laidlaw, one of two independent Rio executives leading the search for a new chairman, said the board accepted Thompson’s decision and was grateful he had agreed to provide an important period of stability for the miner’s new Danish executive director Jakob Stausholm, who was appointed Rio’s CFO in January after two years.
Last month, Thompson was accused of breaking a promise to the traditional owners of Juukan Gorge when Rio replaced the acting head of its iron ore business with a permanent appointment. The company later said it should have communicated the executive changes “in a more cooperative way”.
“There is no realistic prospect of Rio rebuilding relationships, trust and reputation while those responsible for the breakdown of its culture and social performance remain on the board,” said James Fitzgerald of the Australasian Center for Corporate Responsibility.
“The resignation of Rio Tinto chairman Simon Thompson and director Michael L’Estrange suggests the company understands this.”
The departures are the latest in a series of changes at the top of Rio. Three of the ten-person board – Jennifer Nason, Hinda Gharbi and Ngaire Woods – joined over the past 12 months.
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