Here is the speech Mr BHP should have delivered by JANET ALBRECHTSEN
12:00AM JULY 31, 2019
I am the chief executive of BHP. For a brief moment last week, I thought about giving a speech in London to an august crowd, some lords and ambassadors and other masters of the universe. It’s not as neat as rubbing shoulders with celebrities at Davos, but that mountain soiree is six months away. I thought about announcing that BHP will appoint itself as the moral guardian of greenhouse emissions, dictating to our customers how they use our products to reduce emissions.
I imagined feeling a frisson of excitement when sections of the media and the climate-in-crisis activists laud my landmark address when I also announce that BHP will commit hundreds of millions of dollars, shareholders’ money, to monitor what our customers do with the coal they buy from us. I will ignore cynics who may think I’m after a personal halo.
Then I shook off such nonsense. As the CEO of BHP, my first duty is to our shareholders, meaning all of them. How feeble I would have looked succumbing to a small rowdy bunch of activist investors who think they can tell us what to do over and above our millions of quiet shareholders.
What follows is my actual speech. I should have given it long ago, in Australia, because BHP is still “the Big Australian”. Our history and headquarters are in this country, and so the hard work must start here.
“Good morning, ladies and gentlemen. It is a pleasure to be here today to talk about BHP’s response to critical issues affecting our company, this country, and the global economy. It is time for me, as chief executive of BHP, to take the lead. I cannot remain silent any more. Too much is at stake. To the climate change activists who want me to speak about a climate crisis, and spend shareholders’ money on it, I say there is another crisis I must deal with first. And it won’t cost shareholders a dime.
The challenge is clear and present: there is a crisis of confidence about capitalism. It is on the nose, and so are big companies. The loss of legitimacy in big companies means that fundamentals of business and capitalism are more highly contestable than they have been for decades. What were once accepted as truths — that businesses create jobs and that small and big businesses work together to drive economic growth — are controversial because of sustained attacks by ideological opponents. Not to mention an education system that is failing to properly educate our students.
Those who bash big business and free markets won’t be defeated by corporate bosses whining privately about populist politicians, dimwitted voters and left-wing activists.
As BHP’s boss, I must stand up to defend the story of capitalism. Our future as a company depends on the next generation understanding that free enterprise is critical to their future.
I hope other corporate leaders will join in this existential battle. Free enterprise, the success of companies, big and small, are integral to human flourishing. Capitalism is not perfect but, as Winston Churchill said about democracy, it is a damned sight better than the alternatives.
The history of capitalism is one of lifting billions of people from poverty, providing standards of living that earlier generations could never have dreamt of.
People are living longer because of medical advances. People are better educated, wealthier, more mobile, moving up income levels and across cities and countries. There is an extraordinary array of technology at our fingertips.
All of this comes from a set of values that drive free enterprise. If we lose confidence in those values, in open and free markets, we lose the key to our present and future prosperity.
I commit to reminding people of the morality of free markets. As CEO, it is my role to explain why profit matters to BHP, to our shareholders, those ordinary Australians who save and invest in their future, either directly or through funds that invest in us.
I will use my privileged position to explain and promote the moral dimensions of policies that grow our company and create more jobs. Few corporate leaders, if any, ever speak of the essential human dignity that comes from work. If more people understand that improving productivity is not just an economic imperative, it is a moral one too, they will back policies that create jobs. If corporate leaders like me don’t support these policies, who will?
Lower corporate taxes, more sensible industrial relations laws and less red tape are far more fundamental to our future than adding BHP’s name to any number of feel-good social causes.
For too long, corporate leaders have shunned these policy debates on spurious grounds that we do not get involved in politics. We make that claim in our corporate governance statement. It’s utter nonsense.
We get involved in, and throw shareholders’ money at, an array of highly contestable social causes. The Voice? How can we, as corporate leaders, justify taking sides on an issue that is an intensely political, its consequences unknown, yet we did nothing when there was a concrete proposal to abolish tax refunds for our shareholders.
That dereliction of duty will not happen again under my watch. Virtue-signalling about social issues that are far more contested than we care to admit ends today. I commit to redrafting BHP’s corporate governance statement to make this new direction abundantly clear.
On that score, the next time another small, noisy group of activists tries to hijack the ASX corporate governance principles, imposing pages of social engineering baloney, I will speak out.
Last time it happened, our silence created an opening for those interfering activists who do not value free enterprise. We left it to others to defeat the dangerous frolic that would have guaranteed a one-size-fits-all corporate mediocrity. Mediocre companies do not survive in a globally competitive world. Today, I commit to showing leadership about how and by whom BHP is run.
Nowhere is the morality of free markets more obvious than when it comes to cheap and reliable energy. Our economy, our local businesses, existing and new jobs, our living standards depend on cheap and reliable energy. That means there is a future for coal.
It is one of the great moral challenges of our time to provide cheap energy to countries less fortunate than ours.
Cheap energy has already lifted billions of people out of poverty, improved their life chances.
Let me end this address by making it clear that we are a proud exporter of coal, and we will not engage in rich-country hypocrisy that presumes to tell other countries they cannot enjoy the same advantages that have made us rich. Thank you.”