Corporate Social Responsibility and Governance Structure of Rio Tinto Limited

This essay discusses the significance of corporate social responsibility (CSR) and governance structure in the success of Rio Tinto Limited, a major mineral and metal mining corporation in the UK and Australia. It covers topics such as philanthropy, environmental protection, human rights, and the company's governance structure and key stakeholders.

Running head: ESSAY 0
ETHICS AND CORPORATE SOCIAL RESPONSIBILITY
JULY 25, 2018
STUDENT DETAILS:

ESSAY 1
Executive summary
Corporate social responsibility is a significant element of a business. CSR refers to operating
a business in a way that fulfils and increases the moral, legal, general, and marketable
expectations about the business of society. It is about how company manages the business
affairs to make positive effects on the society. It also includes sustainability, impacts on
society and moral. CSR is permanent commitment by the company to behave morally. It
contributes for the economic development when establishing the quality of life of personnel
and their families. The corporate social responsibility is all about marinating capacity for
justifiable livings. CSR gives respect to cultural differences. It searches the new business
opportunities to develop the skills of workers, community, and government. CSR becomes a
major part of process of wealth creation. It increases the competitiveness of company.
This report makes focus on the various features of corporate social responsibility, the
significance of CSR and role of CSR in making Rio Tinto one of the biggest metal and
mining organisation in United Kingdom and Australia.

ESSAY 2
Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................3
What is corporate social responsibility?....................................................................................3
Philanthropy...............................................................................................................................6
Governance Structure and salient key stakeholders of Rio Tinto Limited................................6
Environment of Rio Tinto Limited-...........................................................................................8
Human rights-.............................................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................11

ESSAY 3
Introduction
The CSR is a management concept, which can take various forms on the basis of company
and the industry. It is a broad concept through which corporations handle the business
procedures to produce positive effects on society. The executives are required to fulfil the
duties and obligations in order to frame plans, strategies, and taking decisions to fulfil the
purposes and objects. The corporate social responsibility is an organisation policy. It is
categorised as international private business self-regulation. CSR is agenda of procedures,
rules, and regulations that allows management to be clear, reasonable, and answerable. There
are several aspects of governance structure such as individuals, roles, procedures, and
arrangements.
The theory of CSR is not only limited to good environmental approach, but it covers the
values of a company with the goals of the stakeholders such as customers, workers,
depositors, dealers, supervisors and society. The worldwide importance of CSR can be
merely drawn by the various companies of foreign, which are shaped for the same. The
international companies are regularly describing the subject matters in respect of CSR and
moral duties of companies.
In this essay, the theory of corporate social responsibility, corporate governance structure,
and morally feasible efforts of Rio Tinto is discussed and examined.
What is corporate social responsibility?
Rio Tinto Limited is major mineral and metal mining corporations. The main offices of Rio
Tinto Limited are situated in United Kingdom and Australia. Rio Tinto Limited fulfils
corporate social responsibilities by sustainability committee. The sustainability committee is
regulated by the Chairman, Ms Megan Clark (Rio Tinto, 2018).

ESSAY 4
To analyse the corporate social responsibility policy of the Rio Tinto limited, some actions
were undertaken (Rio Tinto, 2018). They are following-
1. The company supported White Ribbon campaign in Australia that secures and
promotes families influenced by physical abuse. Rio Tinto Limited developed as
White Ribbon certified organisation in Australia.
2. Rio Tinto Limited is in top Australian corporations. There are about 1431 full time
indigenous workers in the company. The workers are about eight percent of total
Australian workers of the organisation in year 2017.
3. Rio Tinto Limited organises a worker assistance programme, which deals with giving
them with expert guidance and support for workers and their relatives. The Worker
Assistance Programme involved the more than ninety five per cent workers of Rio
Tinto Limited.
4. In previous 10 years, the greenhouse gas emission has been decreased by twenty
seven percent.
5. About sixty nine percent of the power sources of Rio Tinto Limited are replacable
power sources.
There are many models to evaluate corporate social responsibility structure of companies.
There are two significant techniques that have been used to analyse the corporate social
responsibility activities and governance structure. These significant techniques are Carroll’s
pyramid and Wartick model and Cochrane’s Typology (Schwartz, 2011). Archie B. Carroll
had established pyramid of corporate social responsibility. This pyramid of corporate social
responsibility helps to analyse corporate social responsibilities and common public matters in
the administration. The system is made on the basis of corporate social responsibility
definition given by the Archie B. Carroll. As per the definition given by Carroll, the CSR

ESSAY 5
activities of a corporation are limited in four kinds of expectations of society. This four types
are fiscal, legal, Philanthropy and legal (Tricker, 2015).
It is required by the organisation to be efficiently accountable by giving goods of better
quality at less and reasonable cost to the people and by making profits. It is a liability of an
organization to increase the long-term financial proceeds to stakeholders of the organisation.
The monetary profits may analyse by regularity of the market share value and the allocation
of benefits as a cash dividend (Katamba, et. al, 2012).
Further, Legal liability of organisation includes the observance of various valid laws and
rules (Rio Tinto, 2018). The organisation Rio Tinto Limited specifies CSR activity against
United Kingdom’s corporate governance code, the principles related to corporate governance
of Australian Exchange Corporate Governance Council and ASX Principles, and Corporate
Governance principles of New York Stock Exchange. The organisation also follows the
Global Reporting Initiative (GRI) Sustainability Reporting Principles and the ten
philosophies of significant growth. The International Council of Mining and Metals has
established these ten theories of significant growth.
The ethical liability refers to acceptance of ethical values and commitment in actions, which
are morally feasible. The administration of organisation Rio Tinto Limited has formulated a
business affairs code “The method we work,” for its universal procedures that simply
establishes the values and principles of cooperation, security, admiration, honesty and the
skills. Rio Tinto Limited’s annual report of year 2017 states that Sustainability Committee
operates in direction of the BOD (Rio Tinto, 2018). The Sustainability Committee is
accountable for analysing and monitoring the procedures of an organization, principles, and
approaches created to ease issues and problems regarding strength, security of worker,
security of asset, matters related to environment and issues of society. The Ethical committee

ESSAY 6
is also accountable of making sure that the corporation operates in a manner that is in line
with purposes of company, towards all the stakeholders and that the actions give contribution
for the growth of country (Zientara, 2017).
The philanthropic liabilities deal with contribution for common issues and development of
the environment of company in which organisation functions (Carroll and Buchholtz, 2014).
The other model of CSR operation of a company is Wartick model and Cochrane typology.
The Wartick and Cochrane typology established 3 dimensional models such as corporate
social performance Model, covering three aspects. These three aspects are social issue, kinds
of social liability, and the scope of corporate reactions (Morrison, 2015). This model is
encouraged by the Carroll’s pyramid. It is established on the basis of principle to know social
issues, different matter analysis, and organisational actions. It helps in decreasing negative
influences on the company’s environment during the life cycle of functions (Pascoe, 2016).
Philanthropy
As per the data stated in Rio Tinto Limited’s annual report for year2017, the organisation had
used a whopping 176 million US $ in year 2017, as a contribution for public (Rio Tinto,
2018). This amount was used to run 1336 common public events including health,
environmental security, training and the agricultural growth and business advancement
(Moon, 2014).
Governance Structure and salient key stakeholders of Rio Tinto Limited
The Annual Report, 2017 states the governance structure of company (Rio Tinto, 2018). It
contains various parties. Each party of governance is defined as follows-
Chairman: With effect from 5th March, 2018, Mr Simon Thompson has appointed for the
position of the Chairman of Rio Tinto Limited. Mr Simon Thompson is accountable for the

ESSAY 7
management, for give directions to the employees, outlining agendas of board and complete
efficiency of performance of board of company.
Chief Executive Officer (CEO): Mr Jean Sebastian Jacques has appointed chief executive
officer of Rio Tinto Limited. Mr Jean Sebastian Jacques is accountable for daily supervision
of the business affairs by allocation of actions and maintains the different groups. These
committees are administrative Committee, Investment Committee, Closure Committee, Risk
Management Committee, and the Ore Reserves Steering Committee. These committees are
together recognized as organizational committees of Rio Tinto Limited.
Chief Financial Officer (CFO): Mr Christopher Lynch has been appointed as chief
executive officer of Rio Tinto Limited. Mr Christopher Lynch has different obligations to
perform. Chief financial officer is entrusted with the liability of monetary arrangements,
recording and examination, administration of shareholder’s connections and reviewing whole
capital structure creation and the application.
Board of Directors: Board of directors (BOD) contain 6 non-executive directors. The board
of directors give complete management and direction to the business affairs of the
organisation either in the direct way or in the indirect way. In this way, they provide long-
term assessment and importance to shareholders and other stakeholders of the company
(Burton and Edwards, 2018). The board of directors are accountable for developing corporate
procedures and strategies. They are also responsible to give surety that there is an efficient
internal control environment for day-to-day management to have place powerfully. The board
of directors identifies and allocates its functions and powers the different committees such as
an administrative Committee, Investment Committee, Closure Committee, Risk Management
Committee.

ESSAY 8
Five Board Committees: The organisation Rio Tinto Limited contains five committees.
These committees are following by which different operations are conducted in the company
(Rio Tinto, 2018).
1. Audit Committee
2. Nominations and remuneration Committee
3. Committee of chairman
4. Sustainability committee
Group Company Secretary: Mr Steve Allen and Mr Tim Paine are appointed for post of the
company secretary of the Rio Tinto Limited. They are accountable for giving advice the
board of directors on the different governance in respect of related subjects (Rio Tinto, 2018)
Environment of Rio Tinto Limited-
The Rio Tinto Limited is committed to securing the environment of the society. It is also
committed to protecting the resources for significant use. The organisation has knowledge
that the functions are making direct effects or indirect effects on environment of company. It
allows the organisation to pursue environment policies in which they can handle direct
influences and indirect effects of company’s environment. The company is presently
contributing in the global transition. The company has knowledge that there are different
functions that influence the environment by which management of company keeps watching
and reporting the development of proposals and plans, and actions taken by them for securing
company’s environment. The organisation has started sovereign audit of the non-monetary
aspects that include atmosphere, consumer, public, and governance system (PWC, 2018).
Human rights-
The approach to human rights is necessarily developed by Rio Tinto Limited Company. This
approach of human rights protects and advances health of persons, business, and groups. The

ESSAY 9
statement of human rights states the responsibility and obligations to admire the human
rights. The many steps have been taken for the protection of human rights such as ESG risk
assessment process. It highlights the some major issues such as health, security, power,
effluence, struggle, human rights, corruption, governance, and irrigation. This is the right and
effective step to finish the corruption. Rio Tinto Limited is associated with various
international organisations. It states the progress on the business principles such as rights of
individual, employment, industry, corruption issues and other environmental issues. In this
way, organisation is keeping good record on the observance of human rights. The corporation
has established policies related to the corporate responsibilities to finish the corruption,
disparity, and scarcity. These policies are depended upon the understanding of consumer and
economic accountability. The organisation maintains the proper documentation of moral
management of individuals by giving educations, guidance and doing experiments. There is
no survival of immoral marketing approach due of better and healthy corporate structure of
the company (Jamnik, 2017)
Conclusion
As per the above analysis, it can be analysed that CSR is a strategy adopted by an
organisation to manage the business affairs of company. CSR not only forms a large honest
client base in the organisation, but also important for making basic development, goodwill
and creating the success. Furthermore, these actions support the healthy and positive
relationships between company and the workers. The corporate social responsibility, morals,
and governance structure have a great role in the business affairs of corporation. The idea in
respect of systems and procedures has made a key significance. The companies like Rio Tinto
Limited deliberately reveal corporate social responsibility activities and governance structure
because of the two main reasons. First of all it develops their status among the stakeholders

ESSAY 10
of company leading to consumer’s integrity and fairness. Further, it establishes status for
reporting clear and fair procedures. As per the CSR policy of the organisation Rio Tinto
Limited, it is concluded that the corporate social responsibility activity established by the
organisation has helped the business of company in making wealth and goodwill in the
particular industry and at the international level. Consumers consider more than features ad
value of products at the time of selecting brand,

ESSAY 11
References
Burton, M., and Edwards, T. (2018) Rio Tinto digs deeper into Mongolia. [online] Available
from:https://www.reuters.com/article/us-rio-tinto-mongolia/rio-tinto-digs-deeper-into-
mongolia-idUSKBN1FA17R [Accessed 07/06/2018].
Carroll, A. B., and Buccholtz, A. K. (2014) Business and Society: Ethics, Sustainability, and
Stakeholder Management. 9th ed. Boston, MA: Cengage Learning.
Jamnik, A. (2017) The Challenges Of Business Ethics: The Basic Principles Of Business
Ethics - Ethical Codex In Business. [online] Available from:
file:///C:/Users/System04100/Downloads/RIC_volume_3_issue_3_Anton_Jamnik%20(1).pdf
[Accessed 05/06/2018].
Katamba, D., Zipfel, C., Haag, D., and Kazooba, C. T. (2012) Principles of Corporate Social
Responsibility (CSR): A Guide for students and practicing managers in developing and
emerging countries.Houston: Strategic Book Publishing and Rights Co.
Market Index (2018) Rio Tinto Limited. [online] Available from:
https://www.marketindex.com.au/asx/rio [Accessed 07/06/2018].
Moon, J. (2014) Corporate Social Responsibility: A Very Short Introduction. New York:
Oxford University Press, p. 3.
Morrison, J. (2015) Business Ethics: New Challenges in a Globalised World. London:
Palgrave Macmillan, p. 226
Pascoe, M. (2016) Unethical Rio Tinto seeing shares surge up. [online] Available
from:https://au.finance.yahoo.com/news/unethical-rio-tinto-seeing-shares-surge-up-
034629798.html[Accessed 07/06/18].

ESSAY 12
Reuters (2018) Rio Tinto, Mongolia end stand-off to build huge copper mine. [online]
Available from:https://www.reuters.com/article/rio-tinto-plc-oyu-tolgoi-
idUSL3N0Y95MT20150519[Accessed 07/06/18].
Rio Tinto. (2018) Annual Report 2017. [online] Available from:
https://www.riotinto.com/documents/RT_2017_Annual_Report.pdf [Accessed 07/06/18].
Rio Tinto. (2018) Sustainable Development Report 2017. [online] Available from:
http://www.riotinto.com/documents/RT_SD2017.pdf [Accessed 07/06/18].
Schwartz, M. S. (2011) Corporate Social Responsibility: An Ethical Approach. New York:
Broadview Press.
Tricker, B. (2015) Corporate Governance: Principle, Policies and Practices. 3rd ed. Oxford:
Oxford University Press.
Zientara, P. (2017) Socioemotional Wealth and Corporate Social Responsibility: A Critical
Analysis. Journal of Business Ethics, 144(1), pp.185–186.