Gender Equality: How to Haul Mining Out of the 1970s
A radical proposal that would force hundreds of resignations
From its boom-and-bust cycle through to its penchant for disreputable bars, it is evident in every corner of the mining industry: this is the world's worst when it comes to gender equality.
More than 90 per cent of all mining directors are male, according to accountant PwC, and only 1-in-20 mining groups are led by women, according to Bloomberg. That makes the industry even more testosterone-heavy than oil and gas.
Companies will be mining asteroids before they get close to gender parity: at current rates of promotion, 30 per cent of all mining directors will be female some time around 2045. South American firms meanwhile live-up to their macho, cultural stereotypes: silver giant Fresnillo and silver miner Hochschild Mining are statistically two of the worst when it comes to putting women in leadership roles.
There are practical reasons why many mining bosses still think it perfectly normal to hold meetings in strip clubs in Kalgoorlie or Montreal. Mining has historically been labour-intensive, and more men pursue engineering than women. In several resource-rich countries, including South Africa and Australia, it has until recently been either illegal or unlucky to employ women underground. 85 to 95 per cent of the industry's total workforce is made-up of men, so any board that outdoes those figures is arguably shooting above par.
Those arguments may have held in the 1970s. But there is now ample evidence to demonstrate that gender balance in the boardroom leads to better decisions. Companies with female directors are 20 per cent less likely to go under and 40 per cent less likely to re-file their annual reports due to accounting errors, according to studies by Leeds Business School and The American Accounting Association Journal.
There are several ways out of the industry's predicament. One option is targets. Sir John Parker, 70, who recently retired as chairman of Anglo American, has
written government reports on boardroom diversity in the UK, saying companies should aim to appoint minorities to board roles within a set timeframe.
That idea is as unimaginative as it is flawed, letting companies appoint one or two female directors to dodge the accusation of having all-male boards, without addressing the deeper cultural issues that make male-led companies lopsided. Tellingly, it is precisely how Parker led Anglo American: it has three female directors out of twelve, but when its executive team sit down to make business decisions, the room is 85 per cent male.
Another option is quotas: Australian mining giant BHP is aiming for fifty-fifty gender balance by 2025. The new policy “raised a few eyebrows”, chief executive Andrew Mackenzie said, but BHP needs to “feel uncomfortable about the targets we set ourselves.” Quotas also come with baggage and in a competitive corporate environment, risk sending the message that women who get promoted have benefited from an arbitrary system.
There is a third option, one grandee suggests, never before considered. Chairing a board attentively is a time-consuming commitment, equivalent to being a government minister. Yet too many directors look on their roles as casual, almost honorary positions and a small number of bigwigs hold dozens of posts, causing gridlock at the top. One mining director in London sits on 83 boards.
That gridlock could be broken. Directors could be blocked from sitting on more than four boards, and anyone in the chair's role could be blocked from sitting on more than two. The new rule would heighten focus, triggering hundreds of resignations, opening-up coveted roles and pulling new people up through the ranks. It would promote diversity at all levels.
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