BHP Billiton on Thursday became the first global miner to adopt a goal for women to make up half its workforce by 2025.
The move was striking partly because the sector in which it operates is notorious for its lack of female representation. Two years ago Glencore, the miner and commodities trader, became the last FTSE 100 company to put a woman on its board.
At BHP, women make up 17.6 per cent of staff, while at rival Rio Tinto, the figure is 18.5 per cent. A report by Women in Mining in 2015 found that just 8 per cent of board directors were female at the 500 mining companies it surveyed.
BHP says it decided to buck the trend — and set itself such an ambitious aim — because it was “time to have a different conversation”.
“If we had been going on as we were, it would have taken around 30 years to reach 30 per cent female representation,” says Athalie Williams, the company’s chief people officer.
Most significantly, Ms Williams says, the goal made commercial sense. From tracking data across its operations, BHP knew its more diverse sites were also more successful, not just in terms of productivity but in terms of safety. Having a convincing business case to put to the board meant there was little opposition to revving up efforts to improve diversity.
It is not just at BHP that the business case for greater corporate diversity has been gathering strength. Recent research by McKinsey suggests that companies in Europe in the top quartile for gender diversity are 15 per cent more likely to have financial returns above their respective national industry medians.
It found that, in the UK, greater gender diversity on the senior executive team corresponded to the highest performance uplift in the 107 listed companies it analysed. For every 10 per cent increase in gender diversity at these companies, earnings before interest and tax rose by 3.5 per cent.
“Correlation does not equal causation, and greater gender and ethnic diversity in corporate leadership doesn’t automatically translate into more profit,” says Emma Gibbs, partner at McKinsey.
“But the correlation does indicate that when companies commit themselves to diverse leadership, they are more successful.”
Closing the gender gap in the UK workforce alone, McKinsey estimates, has the potential to add £150bn to gross domestic product in 2025, and could translate into 840,000 more women in the labour force.
Despite the commercial case, though, not all companies are even gathering data on the link between diversity and performance, and relatively few are making a public commitment to improving the gender balance within their workforce.
This month a number of UK financial services firms announced targets for female representation in a push to improve the number of women appointed to senior roles in the sector. Of 72 firms to sign up to a recently-launched government charter aimed at improving gender balance, 60 have pledged to having at least 30 per cent of women in senior roles by 2021.
Thirteen groups — among them Virgin Money and Legal and General — are aiming for gender parity in senior positions, while banks including Royal Bank of Scotland, Lloyds Banking Group, HSBC and Santander will publish in greater detail their strategies to improve the gender split.
Greater gender and ethnic diversity in corporate leadership doesn’t automatically translate into more profit. But the correlation does indicate that when companies commit themselves to diverse leadership, they are more successful
Such commitments, though, are relatively rare.
The range of BHP’s operations — from mines in Chile to marketing in Singapore — means that, in some regions, staff already divide half and half between men and women. But, globally, only a fifth of senior managers are women.
Experience so far at some of its further-flung operations gives some sense of the mountain to climb. At BHP’s enormous Escondida mine in Chile, there has been a deliberate focus on employing female truck drivers and tool operators, with about 60 women being trained for such roles, but this has only taken Escondida’s female workforce from 2 to 6 per cent of the total.
The goal of gender balance applies to its board — currently a quarter female — and the executive committee — currently just over a quarter — as well as the wider workforce.
Speaking after BHP’s annual meeting this week, Andrew Mackenzie, chief executive, suggested gender balance was within easier reach at the senior levels of the company. “It is dealing with the frontline operators where we have further to travel — maintenance [staff] in particular,” said Mr Mackenzie, whose pay will reflect how much progress has been made on achieving the goal.
BHP’s aim of attracting and retaining a more diverse workforce has been facilitated by technology and innovation. Sites like its high-tech remote operating centre in Brisbane, Australia, which runs mines in Queensland, means that operational mining roles can now be offered to people with a different set of skills.
“We need to make mining more attractive to a broader cross-section of people and no longer directly associated with an image of a white male in a hard hat with a dirty face,” says Ms Williams.
This will mean not just questioning assumptions about what is required to be successful in the industry, but reforming recruitment, reward and promotion procedures. It will also mean changing working practices by, for example, introducing more flexible working policies for men as well as women. And, at some point, it will mean tackling a lack of diversity in BHP’s suppliers, given a large proportion of its workforce is made up of contractors rather than direct employees.
The experime
nt will inevitably be of great interest to BHP’s peers. If its policy in this area is successful both in operational improvements and in attracting talent, other miners may have to rush to catch up.
Additional reporting by James Wilson
