CEO Jakob Stausholm on Reshaping the Future of Rio Tinto
The Rio Tinto CEO has inherited a 150-year-old mining company that he is intent on reshaping for the future.
Current role: Chief executive, Rio Tinto
Tenure: Three years
Previous roles: Executive director and chief financial officer, Rio Tinto; chief finance, strategy & transformation officer, A.P. Moller – Maersk; group CFO, ISS A/S; vice-president, finance, Shell.
How do you define good leadership?
That’s a tall question. Leadership is never perfect. Good leadership is the ability to stay humble, learn and develop.
You’ve been described as softly spoken, collaborative and a peacemaker. Five years ago, they wouldn’t have been traditional words to describe a CEO but are they the key skills that leaders need now?
Maybe people wouldn’t have described me like that five or 10 years ago. Leadership has to be situational. When you try to drive culture and you want to improve certain things or other people, you have to take the medicine yourself first.
So does that mean you adapted your leadership style specifically for this time and this role?
Well, I’ve been on a leadership development journey for the past 25 years. When we had our crisis with Juukan Gorge [in 2020, when a sacred site in the Pilbara was destroyed] it was during lockdown so there was plenty of time for deeper reflection. We also had an extended period between the crisis and when I was appointed as CEO so I had a long time to think through what would be the best pathway forward.
How have you rebuilt relationships with First Nations people?
When I became CEO, I decided I had to do three things. I had to set the team. Then I had to go to the heart of our crisis so I went to Western Australia to Juukan Gorge and met with the Traditional Owners, our people and other stakeholders. And third, I set up four objectives for the company: being the best operator; having impeccable ESG credentials; thinking longterm; and having a strong social licence. Then I started taking myself out of the equation – you have to have your team and the whole organisation working. I can’t change the culture but, collectively, we can decide to change the culture.
So you’ve empowered your staff to rebuild those relationships?
Yes but it’s not an outcome-based thing; it has to be value-based. My early lesson from visiting Juukan Gorge was very simple: if we’d had the right relationships with the Traditional Owners of the land, this would never have happened.
You said culture is collective. You commissioned a report by former Australian Sex Discrimination Commissioner Elizabeth Broderick, who found that there was systemic bullying, harassment and discrimination at Rio. How did you galvanise after that?
It’s a long process. When I was interviewed for the CEO job, my emphasis in the interview was about adjusting our culture and I had a clear plan around that. I felt that we needed to be a more outward-looking company, more in tune with society, and I wanted to create an organisation that was less hierarchical and more humane. When we started, we had a new team and there was some discomfort around the word “culture”. On that basis, we hired Elizabeth Broderick and ended up with high-quality research that wasn’t disputable. If it’s like that, you’d better own it and you’d better get on with it. There are 26 action points… People are talking about it and they tell me it’s not just how they talk in their teams but how they talk to their families, their children. So it’s had a profound impact. But cultural change is a five-year journey and you need to stay the course.
You’ve said that you want to give issues such as sexual harassment, bullying and racism the same level of resources and accountability that you do for workplace safety.
There’s physical safety and there’s psychological safety. It’s terrible if you look at the details of physical safety but you don’t care about psychological safety.
Rio is run out of London. Are there advantages to that or do you feel like you need to spend more time here?
I’m spending more time in Australia but it feels right to have our headquarters in London because we have a global footprint. We’re almost as big in Canada as we are in Australia. I love Australia. It’s sometimes a little bit far away and certainly many time zones away from other places.
Has it been personally challenging for you to manage that?
I try not to be in three continents in one week. I’m taking fewer but longer trips. It doesn’t work if I have jet lag all the time.
You have a target to reduce emissions by 15 per cent by 2025 and 50 per cent by 2030 but you’ve said that you regret setting the 2025 target. Why is that?
Climate change is at the heart of everything. It’s a challenge because we need to reduce our footprint but it’s also an opportunity because there’ll be much more demand for the products and materials we’re producing, particularly copper, aluminium and lithium. We felt a big obligation to try to futureproof our business and thereby reduce the emissions as fast as we could. What we did was say, “If we really stretch ourselves, we can halve our emissions by 2030.” We used to have a target of 15 per cent by 2030 and we moved that five years forward to 2025. One of the things we’ve learnt is that these things take longer because often when you have to get renewable energy in place, you have to work with a grid and that means you have to work with states. Everybody wants to achieve a lot of things but it takes time.
So what hard decisions will you have to make to hit 50 per cent by 2030 or don’t you think you can get there?
One of the biggest emitters we have are a couple of aluminium smelters and refineries in Australia that are still sourced by coal-fired energy. So we need to find a competitive renewable solution – we simply can’t afford to continue for too long using coal-fired energy for such intensive energy use.
What are the biggest misconceptions that businesses have about how they tackle climate change?
We’re not very good in the world, to be honest. For 28 years in a row, the world has discussed how to reduce emissions but we’re still increasing emissions every single year. When some country says that they’re reducers, it’s mainly because they’ve closed down their manufacturing and sent it elsewhere. There’s no-one who has cracked the code yet. The world is changing and I’m quite optimistic but it’s such a massive change that now has to happen in a much more compressed timeline than if we’d started 15 or 20 years ago. It’s really one of the biggest challenges mankind has faced, like a new industrial revolution.
How important is collaboration with other mining companies? You’ve spoken to Andrew Forrest about green hydrogen.
Absolutely. Andrew is very passionate about that – it would be a stupid mistake if I wasn’t talking to him and other industry participants about how we can cooperate. Across the industry, we have similar challenges. We might be competitors and we can’t talk about commercial issues but if we can develop infrastructure cheaper together, it’s a win-win… One of the things that has become crystal clear is that you can’t just sit in your own company and solve things. You’re about to lose.
You’ve expanded the Oyu Tolgoi mine in Mongolia, which is predicted to be the fourth-largest copper mine in the world. You effectively rescued that project. What did you learn?
There wasn’t a good relationship between the government and Rio, nor with the public. I appointed a Mongolian citizen, Bold Baatar, as global CEO of copper and he very skilfully opened up a deadlocked situation and brought me in. I think we turned it into a strong partnership. It’s not a trivial investment. We’ve invested US$15 billion into a country that is very big but only has about three million inhabitants.
You had a lot of stakeholders in that project. How do you successfully manage that many voices?
Yes [laughs]. The answer is you can’t but you just have to get into it and, in my experience, about the best thing you can do is make sure you spend sufficient time with your opponents. It’s easy to be together with the people who agree with you but actually facing your opponents can be quite effective. Demonstrating that we have the ability to listen to people who we might not agree with can make a difference.
In 2022, the Serbian government knocked back your lithium project because the community opposed it on environmental grounds. Community resistance to development is a huge issue. How do you fix that?
It starts with values. Rio is a global company but we’re also very local. We’re not everywhere but where we have activity, we’re big. So it’s a big responsibility for us – and therefore even more important for our company – that we get these relationships with our neighbours and our communities right. It’s not always easy to be a mining company – we’re not always the most-loved industry – and there’s an element of people saying, “Yes, I understand that in my life we need mining, as long as it’s not in my backyard.” That’s our challenge.
What would you say is your biggest strength as a leader?
I do think the key thing is to accept that it’s imperfect and therefore I can always do better. I really try to make sure I get feedback and sometimes I get professional help as well, to get to know myself. The more you know yourself, the more you can take yourself out of the equation. The last thing you want in leadership is when things are ego-driven. A leader’s responsibility is to promote one thing – the company.
And what about your biggest gap?
I’m only five years in Rio Tinto and the mining industry. I’m always together with people who know more about the industry than I do. I have high curiosity and that stimulates me but I don’t necessarily understand everything.
Is there such a thing as work-life balance for you?
My life is a bit nomadic because I travel so much but it’s very important to have downtime. When you’re really busy, you become very reactive – you look at your inbox and you answer every email because you like to be nice to your people – but as a CEO it’s not enough to react. You also have to be proactive and that means you have a clean table and sit down and think where you’d like to take the company, what’s missing. I ensure that I get holidays and find days where I’m not just in back-to-back meetings because then I become too reactive.
One commentator said that you’re years away from victory. What do you say to that?
The last thing you want to do is claim victory but you can hopefully celebrate a few things on the road. I think we’re in a much better position now than we were a couple of years back. It’s absolutely not a victory but I’ll be very happy to say we’re not in a crisis anymore.
On the fly
Personal motto
Transparency: all facts are friendly.
Email approach
Keep replies brief to ensure the right balance between being reactive (responding) and proactive.
Motivation tactic
I get inspired by spending time with our people, partners, opinion-makers and in the communities where we operate. That’s where you can really see the difference our business makes.
Productivity hack
Move your body. Stretch, get out for a walk then focus on the next task.
Business book
On China by Henry Kissinger.
Rule you don’t break
Image credit: Marc Némorin
Always make time for exercise and sufficient sleep.
Favourite piece of advice
Culture eats strategy for breakfast.
