Richard C. Adkerson: CEO of Freeport McMoRan
“Running a Global Company Can Be Complicated, But Our Work Also Has Great Satisfactions.”
I asked Adkerson, “where do you draw the line between profits and needs of indigenous people?” He answered, “Jeff, there is no line.”
I have always wondered how global chief executives deal with the inexorable challenges they face every day. Of course, I’m referring to the media and social activists, not competitors, rogue foreign leaders, and armies of plaintiff lawyers clutching onto the backs of companies pretending to be modern day Robin Hood’s but in fact are ambulance chasers in coat and tie.
In our interview, Freeport McMoRan chief executive, Richard Adkerson shows us how.
JC: Richard, tell us how a boy from rural Mississippi ends up in the C suite of a Fortune 500 company?
RA: I came from a family of small farmers. Grew up in small towns in Mississippi, public schools, went to a public university, and for some reason that I cannot explain, I scored well on tests and I took that competitive spirit I had for high school athletics…and so here I am.
JC: When you got the offer to come to Freeport‑McMoRan, you were told that a financial type will never run this company.
RA: When a company is founded it generally takes great technical capabilities, and then you build it to a certain size, and a company has an evolution into how they have to deal with the outside world. It’s a question of learning how to work through others in dealing with business problems.
JC: Tell us about the art of the deal according to Richard Adkerson.
RA: For me, it’s a question of credibility. It’s one thing to be smart. The other thing is to learn how to be diligent, and then to approach in an ethical way that establishes personal credibility.
JC: Your neighbors may not have appreciated waking up to a group of people protesting outside your home.
RA: Mining inherently has enormous impacts on the environment. When a mine is created in a remote location a tremendous influx of people and rapid growth creates problems. I have a real appreciation for the environmental movement. Unfettered capitalism and so forth can create harm, and I think this movement that’s built those sensitivities in our population at large is a good thing. The friction comes about because people with a particular philosophical point of view oppose, often, any sorts of development. What we try to do is reach out and say, let’s work together because the world needs our products. You need to have energy to live. It would be great if we could do those things without having resource development, but you can’t.
JC: When you’re in a country like Indonesia how much do you have to think about profit versus indigenous peoples and where do you draw the line?
RA: It’s not a line, Jeff. There is no line because we can’t create value for our shareholders unless we operate ethically in whatever region of the world we are in. If we are not responsible to the environment or the local people or the governments where we operate, or our workforce, we ultimately can’t make profits.
JC: Foreign governments may not always have the best interests of their own indigenous people.
RA: You probably can put a pinpoint at about 1960 when colonialism started dying out. Many of them ended up being ruled by authoritarian governments. Now there’s a transition to democracies, and in many places, immature democracies. Often, the relationships with indigenous people are strained.
What we’ve learned is that while we have to adhere to the laws and the terms of our arrangements with host governments, we can’t turn a blind eye to the local communities. Take a country that has such a desperate history as the Democratic Republic of Congo — 65 million people in a country that’s the size of all of Europe, and it has $14 billion of GNP. We’ve got 8,000 people working for us. 35 villages that we’ve brought fresh water to. We’re dealing with malaria in an effective way. We’re dealing with HIV AIDS problems. The development is happening. It’s a great satisfaction in our work as well.
JC: What is the most complicated part about your business?
RA: This is a fantastically difficult social structure in the regions in which we operate. On the island of New Guinea, there may be seven million people and they speak 25 percent of the world’s languages. In Papua you have indigenous people in different tribes. People that are racially different from the rest of Indonesia. They’re almost all fervent Christians in a country that’s 85 percent Muslim. It’s a liberal form of Islam in Indonesia, but because of the racial, religious, and tribal differences among members of our workforce, we’re right in the middle of it. It does make life complicated at times.