"I was very unpopular" – ex-CEO of Anglo American
As CEO of Anglo American, Cynthia Carroll led an effort to revamp safety standards and change the culture at the male-dominated mining group. In the second FT series of Leaders Under Pressure, Andrew Hill asks her how she dealt with the backlash
Executive Producer and Editor: Vanessa Kortekaas. Video editor: Richard Topping. Camera Operators: Petros Gioumpasis and James Sandy. Still images: Getty and Bloomberg.
I was told at the end of the day that we had had yet another fatality, and I turned to the CEO and said, we're going to shut down this mine complex.
You were the first woman and the first outsider to run what was a very top-down, male-dominated, hierarchical business. And when you left in 2013, this was seen to be some kind of double disadvantage. But how useful was it to have the outsider status when you joined Anglo?
Well Anglo had always been run by insiders, South Africans. When I came in, I didn't know what to expect. And so my first job was to get out and understand the business and the future potential of the business, which I did. I've always been in a male-dominated environment, so I was just there to do what I came to do, and that was to deliver underlying performance.
I've always had the view that safety is a key indicator of rigour and discipline in an organisation. We had been losing about 45 people to fatalities every year for the five years before I arrived. So I started with safety.
In 2007, her first year as chief executive, Carol went to Anglo's Rustenburg platinum mining operation in South Africa, a key part of the company's global activities. Within hours of her visit, she was told that one of the workers had been killed at the mine.
I was told at the end of the day that we had yet another fatality, and I turned to the CEO and said, we're going to shut down this mine complex. And to that he said, I'm not so sure we need to talk about it.
And then I said, no, we need to do it now. We need to instruct everybody that we're going to bring up all of our employees. We're going to assess the infrastructure and the standards. We're going to work to retrain people. And then, only then, when we feel confident that people will be working in safe conditions, will we return them to work.
It was a bold decision that affected around 28,000 workers. Carol knew she would have to win allies for her safety campaign within the wider industry, the unions, and the government.
The CEO indicated that it would take about seven or eight days. It took about seven weeks. And that was a turning point. But even in the fall of 2007, I still felt that things were not - people were scared. And the mindset hadn't really changed. People felt threatened.
Did you doubt your decision at any point after that, because clearly you were taking it alone on the spot without talking to the board or - other than the executives on the ground.
No, I did not doubt my position, because I felt that was necessary in order to set the standard. It was something that everybody had a vested interest in. And I was not going to lead a company where I could not be assured that people would come to work and leave work at the end of the day in the same way.
The culture that you encountered there - perhaps you could just encapsulate what you thought was wrong with it at the outset?
Well hierarchical, and there were only longstanding mine managers and even shift supervisors who had been in place for a long time. People didn't feel empowered to put their hands up and say, this is wrong, or this is an unsafe environment.
We had been transitioning to a largely South African company, to a global company. And in doing that, we needed to be joined up. I took out a layer of people reporting to me early on. They were acting as chairman, which was a buffer, from my standpoint, between myself and the CEOs of the businesses. So that was something that they were not used to.
Did it make you unpopular?
It did make me unpopular.
How did that feel?
Well, as CEO, you have to make tough decisions. And I was doing this in the interests of the greater good of the organisation and building that organisation for a sustainable future.
And in the case of safety, it was very unpopular. People didn't subscribe to taking on new standards, inside of Anglo, as well as outside of Anglo. I mean we had pressure from our competitors asking what in the world are you doing?
How did you deal with the personal pressure, because you had the mixture of the politics, both internal and external, and the sense that you were changing the shape of this vast company with its, as you said, embedded culture and hierarchy.
Well I spent a lot of time with external stakeholders, shareholders. And I never had any pushback from the shareholders. They understood what I was doing. They understood the reason, the justification, and they understood that the benefits ultimately would come in bottom-line performance. And similarly, with the labour unions - we never had a major walkout. We never had a strike, because we had built that trust.
Trying to rewrite the safety standards and changing the culture at Anglo weren't Carol's only challenges. During her tenure, she had to face down the threat of a takeover, a downturn in the commodity cycle, and criticism of her environmental record and strategy decisions, notably, Anglo's investment in Minas Rio, a Brazilian iron ore project that went into operation four years late and at twice the original budget.
Minas Rio is a tier-one asset and identified as a potential acquisition before I even arrived. But the fact was, we had changes that we did not anticipate - and nobody in industry anticipated - in Brazil, in the regulatory environment. You can always look back and go over those investment decisions. I think you're in the hot seat, as CEO. You've got to make some tough decisions. They were not all popular decisions. But at the same time, I had a lot of backing from shareholders and tremendous support from the board.
But, by 2012, investor sentiment had soured, and in 2013, Carol stepped down.
Did it feel, when you left in 2013, that you were leaving behind unfinished business? You've written that you were hired as a change agent. Had you changed everything you wanted to change?
No, I don't think you ever change a culture completely. There's always more to be done. I was very proud, when I left, of what had been achieved.
In some interviews, you sounded rather cross about having to leave when you left.
Well I would say that, first of all, I did take some tough decisions. I did have to reduce the number of people. We delivered $3.2 billion of value over and above our committed number of $2 billion. we had a clear strategy. We were joined up. We reduced the number of fatalities by about 70% and that cascaded into the industry, which was reduced by about 50%. That's an achievement.
You can always look back and say, I wish I had done this, and I wish I had done that. But I really left having been very, very proud of the organisation and what I contributed to bringing it along and making it a much stronger organisation for the future.