58 Business The Economist February 12th 2022
C
orporate cultureis often like
mist—indubitably there but hard to
pin down. Occasionally it solidifies into
something ugly. Take the following
figures from an external investigation
commissioned by Rio Tinto, a global
mining giant, into its workplace culture.
Almost half of Rio’s employees report
having experienced bullying in the past
five years. Almost a third of its female
workers have endured sexual harass
ment; 21 women reported an actual or
attempted sexual assault. Two in five
Australian Aboriginals and Torres Strait
islanders employed by the company have
experienced racism.
The report is an admirably open
attempt to face up to a toxic culture. As
well as survey data, it contains testimony
from interviews and focus groups. It was
published on Rio’s website earlier this
month, along with an apology from
Jakob Stausholm, the firm’s boss. Such
unusual transparency seems to be build
ing trust: half of the firm’s employees
said they were extremely or very confi
dent that Rio would make meaningful
progress in stamping out sexual harass
ment and racism.
The report is a product of specific
circumstances. Rio’s reputation was
badly tarnished in 2020, when it de
stroyed Juukan Gorge, a mining site in
Western Australia whose ancient rock
shelters were sacred to indigenous peo
ple. That cost Mr Stausholm’s predeces
sor his job, kickstarting efforts to
change the way the firm was run.
Rio’s culture is traceable, at least in
part, to the idiosyncrasies of the mining
industry. Its workforce is 80% male, and
the worst behaviour occurred on remote
sites where employees fly in or drive in
for stays of several days, or live fulltime
in company housing. Machismo andisolation make for poor bedfellows.
But it would be a mistake to regard
Rio’s soulsearching as a curio from the
world of alpha males and excavators. For
both its findings and the fact of its exis
tence hold wider lessons.
First, they show how a corporate cul
ture can rot. The worst abuses may have
been more prevalent in the firm’s remote
reaches but they were present at its heart,
too. The highest rate of sexual harassment
was found in the firm’s ironore division,
but next came Rio’s strategy, sustainability
and development group. Widespread
suspicion of the company’s internal re
porting mechanisms and a fear of speak
ing out are evident. “The minute you raise
an issue about a senior leader, you’re
done,” said one employee. “I don’t want to
rock the boat so hard that I fall out of it,”
echoed another. Interviewees accused Rio
of rewarding bullies, and of pushing high
performers up the corporate ladder irre
spective of how they behaved.
Among other things, the firm says it
will set up a specialist unit designed to
respond to complaints of harmful behaviour, and to provide support to people
who blow the whistle. Whatever the right
answer, the report raises questions that
executives in all organisations confront:
what to do with talented jerks, and how
to make sure people voice concerns if
something is going badly wrong.
Second, they may be a harbinger of
wider demand for data on corporate
culture. For all that managers bang on
about people being an organisation’s
greatest asset, precious little informa
tion is available to outsiders on how staff
are treated and encouraged to behave.
This may be because of the mist problem:
it is hard to measure culture. It may be
because investors haven’t much cared.
Perhaps that is changing. Labour
shortages have focused attention on how
well firms retain workers. Research from
Donald Sull at the Massachusetts In
stitute of Technology and his coauthors
finds that a toxic culture is ten times
more important than pay in predicting
industryadjusted staff turnover.
Movements like #MeToo and Black
Lives Matter have pushed sexism and
racism up the corporate agenda. Allega
tions of sexual misconduct have battered
the reputations of Axel Springer, a media
giant, and Activision Blizzard, a video
game publisher just acquired by Micro
soft. Late last year Microsoft’s investors
adopted a shareholder proposal requir
ing the software titan to report on its
own sexualharassment policies. Reg
ulators are making noises about more
disclosure on human capital; Gary Gen
sler, chairman of America’s Securities
and Exchange Commission, wants pro
posals in this area.
Rio Tinto’s problems are extreme. But
they are not unique. And in opening up
about its corporate culture, it is, in one
way at least, ahead of its time. A disturbing report on Rio Tinto’s corporate culture has lessons for other industriesBartlebyToxic sludge
prove their products. But it can also be in
terpreted as an implicit acknowledgement
that the devices are not an instant cure.
(Oura says that it now offers various other
insights into ringwearers’ health that are
not directly related to sleep.)
Many scientists worry that, as with ma
ny emerging consumerhealth technol
ogies, sleeptech often lacks the goldstan
dard randomised controlled clinical stud
ies where it is tested on many patients and
against placebos. Ingo Fietze runs a sleep
centre at Charité Berlin, a big university
hospital, and studies novel gadgets andmattresses at a private lab he set up on the
side. He says that when he asked Samsung,
a South Korean devicemaker, and Huawei,
a Chinese one, to share the methods be
hind their watches’ metrics, he did not
hear back. In any case, says Mr Fietze, no
existing wearables, which track sleep us
ing various proxy measures, can match a
clinical polysomnogram (psg), which
takes data directly from the brain using
electrodes. Samsung did not respond to a
request for comment. Huawei says its de
vice measures sleep duration with accura
cy comparable to a psg.Sleeptech may, scientists concede,
help mild insomniacs and sensitive sleep
ers decide whether they need clinical in
terventions. Monitoring bloodoxygen in
real time, as some wearables do, can help
identify disorders including sleep apnea, a
condition whose sufferers stop breathing
while they sleep and which afflicts perhaps
1bn people around the world. But ultimate
ly, Mr Fietze believes, “no gadget can make
your sleep better.” If consumers in need of
more shuteye reach a similarconclusion,
sleeptech investors’ dreams ofrichesmay
turn into a profitless nightmare.n