Big business should regain trust – Rio Tinto chair

By: Esmarie Swanepoel
5th July 2012
PERTH (miningweekly.com) – Diversified miner Rio Tinto chairperson Jan du Plessis has challenged major corporations to regain the trust lost during the global financial crisis, saying that business confidence could only be re-established once this was done.

Speaking in London, Du Plessis noted that despite the best efforts by governments, they were unable to create wealth, perpetuating the current cycle of economic instability.

“Wealth creation depends on business. Big business, medium-sized business, small business, and indeed sole traders. All of them are important and all of them require one essential commodity in order to grow – confidence.”

Du Plessis noted that a change in business confidence would require a chance in how corporate leaders saw the economy. “We are going to have to accept that trust is no longer a given and we are going to have to make every effort to re-earn and rebuild the trust that we all so desperately need,” he said.

Speaking directly to large corporations and multi-nationals, Du Plessis noted that these companies had to reassess how business was conducted and decisions taken, in order to identify areas where stakeholders expected a better performance.

“But once we have done that, we also need to go out proactively and explain to the numerous stakeholders around us why they need big business,” Du Plessis said.

“I’m afraid, all too often in the popular mind, small and medium-sized businesses are seen to be good and, in simple terms, big businesses are suspected of being bad. Business – in particular big business – has a good story, but unless we are going to stand up and be counted, we cannot expect others to do so on our behalf.”

Touching on the topic of remuneration, Du Plessis said that the spiral of executive remuneration experienced over the past two years could not continue. While admitting that this challenge would not be easy, he added that the ‘lazy thinking’ that had characterised the pay debate in the past would have to be replaced.

“We are going to have to be much more responsive to how the public perceives us, more responsive to how our shareholders perceive us, and more sensitive to how our employees perceive us.”

Du Plessis further noted that companies should better respond to the concerns raised by its various stakeholders, as failure in this area could jeopardise business operations.

“We should act in a way that is responsible; to the local labour market in terms of jobs, to the local government in terms of tax, and to the local community in terms of community projects.”

He further called on large corporations to better explain the need for successful and profitable operations to society, saying that unless industries are allowed and encouraged to be profitable, the world would find it hard to prosper.

Edited by: Mariaan Webb