Corporate Eye

Rio Tinto and Governance Ethics

I came across Switzerland based Covalence SA, a company that rates corporate ethics. The latest quarterly report listed the top 10 multinational companies —

I decided to pick the company least known to me — Rio Tinto. Rio is an international mining company with $33 billion (USD) in sales. Their website includes an unique “Our Approach”, that addresses Governance and their business philosophy.

Rio Tinto’s success as a business depends on a shared commitment to being a dependable global partner and good local neighbour.

Openness & accountability

Rio Tinto is committed to maximum transparency consistent with good governance and commercial confidentiality.

Sustainable development

Rio Tinto contributes to sustainable development by helping to satisfy global and community needs and aspirations.

Engagement

Rio Tinto aims to understand the issues that concern our stakeholders, and to build that knowledge into the way we do business.

Policies

Detailed information on Rio Tinto’s business policies. 

Features

Read features and case studies about our approach to doing business.

Note that Transparency and Openness is first on the list. The Features section has a wealth of information about how Rio does business. This is remarkable since it gives stakeholders a storehouse of material.

Next, look at the Ethics section —

Ethics

We encourage our employees to treat each other and the communities in which we operate with dignity, fairness and respect, and we expect our managers to lead by example in high standards of behaviour.

We are committed to a high level of transparency, consistent with good governance and commercial confidentiality. We also undertake our business with integrity, honesty and fairness at all times, as clearly stated in our statement of business practice, The way we work, in our guides such as our Business integrity guidance, and in our statement of procurement practice, The way we buy.

Further, we explicitly support the United Nations’ Universal Declaration of Human Rights and we respect those conducting our operations around the world.

How we apply ethics at work

It is mandatory for all our employees to be trained and to adhere to all the policies contained in our statement of business practice, The way we work.

Since 2005, we have required all our general managers and above to train on our Business integrity guidance, which addresses areas such as political involvement, bribery, corruption and facilitation payments.

Every year, we ask each our businesses to complete a rigorous and comprehensive Internal Control Questionnaire (ICQ), to check that they are adhering to The way we work. In addition, we use our Compliance guidance programmes with regard to implementing our policies.

We also require our directors, senior management, financial managers and employees who prepare financial statements to conduct themselves with integrity and honesty, in accordance with the ethical standards of their professions.

In addition, we expect them to comply with our Antitrust policy and guidance to ensure that we adhere to our policy of free and fair competition wherever we operate.

This is a very comprehensive treatment on Ethics. Rio understands that the key to Ethics is the actions the company takes to insure that its policies are implemented. Note the highlighted paragraph regarding the annual ICQ review. This is crucial to insure that ethics underpin business practices.

Rio Tinto stands out out as a large multinational company that is serious about its Ethics.

A final suggestion: do visit the Covalence website, as it is worldclass. 

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Ed Konczal has an MBA from New York University's Stern School of Business (with distinction). He has spent the last 10 years as an executive consultant focusing on human resources, leadership, market research, and business planning. Ed has over 10 years of top-level experience from AT&T in the areas of new ventures and business planning. He is co-author of the book "Simple Stories for Leadership Insight," published by University Press of America.
 
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