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Welcome! This web conference will begin at 12 PM Eastern Standard Time. If you have not already done so, please “sync” your telephone and computer as detailed in the “voice connection” tab in the bottom right-hand corner of your screen. Preparing Responsible Managers for the Mining and Metals Industry Speakers Bruce Hutton Dean Emeritus and Piccinati Professor of Marketing, Daniels College of Business, University of Denver R. Anthony Hodge President, International Council on Mining and Metals (ICMM) Moderator Maureen Scully Assistant Professor, UMASS Boston College of Management Agenda Introduction (5 minutes) Presentation—R. Anthony Hodge (10 minutes) Presentation—Bruce Hutton (10 minutes) Moderated discussion (20 minutes) Introduction to Aspen resources (10 minutes) Sustainability, Mining and the MBA R. Anthony Hodge, Ph.D. , P. Eng. President, International Council on Mining and Metals Professor, Mining and Sustainability, Queen’s University, Kingston www.icmm.com 4 Change is the Dominant Characteristic of Our World Social Environmental Economic Cultural Political The operating environment is one of change; change management is a dominant issue for mining as well as students of business www.icmm.com 5 Solutions Process plus Substance www.icmm.com 6 There are many valid perspectives of Sustainable Development Components Environmental Social (cultural, political, health) Economic Institutional Results Human Well-being Ecosystem Wellbeing Capitals: Natural, Built, Human, Knowledge, Institutional www.icmm.com 7 ICMM’s Sustainable Development Framework For more information visit: www.icmm.com/sdframework www.icmm.com 8 Key Generic Topics for Coverage in Any Course 1.Historic Context: WW II to today 2.Theory and definitions: sustainability, development, sustainable development 3.The “non-renewable” characteristic of mining and its compatibility with sustainability ideas 4.The evolution from “impact” assessment and management to “contribution” assessment and management – capturing both positives and negatives as input to risk and decision analyses 5.Real-life cases www.icmm.com 9 Key Issues Facing the Mining Industry 1. What are fair systems of mineral taxation (for host countries, local communities and companies)? 2. What can mining do about its contribution to global warming? 3. How can mining build effective relationships with indigenous people and other interests that are touched by mining activities? 4. What is the right role for mining to play in poverty reduction in developing economies (north or south)? 5. How far does mining go in assuming government’s responsibility for services and infrastructure? 6. How can industry and society together best assess the social, economic, cultural and political contribution of mining over the long term? 7. What systems of reporting and assurance need to be in place to track company performance across the spectrum of sustainability issues? 8. How can mining best enhance health and safety practices across the world? 9. How can any mining company best introduce concepts of strategic change management? www.icmm.com 10 Preparing Responsible Managers for the Metals and Mining Industry The Newmont Executive Leadership Program Bruce Hutton, Ph.D. Agenda Background On Newmont Mining Executive Leadership Program Sustainable Development Framework Mining—Do The Extreme Issues Faced Provide Learning Opportunities? Original Framing of the Program “We need to build a new generation of executive leaders and develop a consistent leadership culture.” “Today we are good mine operators and our mine managers spend 90% of their time worrying about issues inside the fence line. In the future, in order to earn our “Social License To Operate” (SLTO), they must have additional skills and spend 75% of their time dealing with issues outside the fence line.” “Most all new gold deposits discovered in the future will be in developing countries, which are a far more difficult and risky environment to develop and operate mines. The future will be far more challenging than the past…” Wayne Murdy, CEO (2004) Newmont Executive Leadership Program A transformational learning experience focused on: — Providing a consistent leadership development platform for existing and emerging Newmont leaders—common frameworks and language — Integrating and aligning Newmont leaders with the business strategy — Drive a culture shift in the company Leading People Aligning, engaging and developing our people Business & Financial Acumen Understanding our business end-to-end Strategy & Execution Global Values/Ethics Planning, executing and measuring our business Earning our SLTO and building Reputational Capital Key Design Concepts Comprehensive & Rigorous Program — Fully customized to Newmont — 8 days—Interval (4-6 months)—8 days — Work required outside of class — Held in Denver (2 side trips) — “Wow” experience Cohort Style—Critical Element — 16 participants/class — Build relationships/networks — Share experiences/best practices — Learn from each other — Cohorts carefully chosen Mix of current execs and emerging leaders Diverse groups—global, cross- functional, staff/line, etc. Focused on Relevance & “Stickiness” — Mixture of Delivery Modes — Experientials — Integrating/Exercising the Learning Integrated Cases Action Learning Projects (ALP’s) Utilize ALP’s to advance key Newmont initiatives — Present recommendations to Executive Leadership Team Results To-Date Completed 5 Cohorts — All C-level execs have attended — Become prestigious internally and a “right of passage” Cohort recommendations have made large impact on direction — ESR — Management Process Established Very Close Partnership — GO Classes to Ghana and Peru — Faculty involved in other activities (coaching, facilitation) Sustainable Development Economic S.D. Social Environmental NGO’s/Communities Mining—SD Issues in the Extreme Extraction Industry — Economic Highly Capital Intensive Developing Countries — Mining often first FDI — Impoverished communities Marginal Projects Little infrastructure Risk High needs — Environmental Weak social institutions Permitting Poor education & healthcare Extraction process (e.g. No local suppliers cyanide) Activist NGO’s — Social Resettlement End of mine life “How much is enough?” — Weak Government Political Risk Corruption Regulatory Agencies From Ethic to Strategy Context Risk Macro Micro Opportunity Internal External Direction Vision Current Reality Sustainability Strategy Execution Economic - Eco-efficiency Social - Socio-economic Environmental - Socio-environmental Results Access to Capital - Financial - Human - Natural - Social - Manufactured Value - Profit - Shareholder Value - Reputation Scorecard: Business Case for Sustainability Measures of Business Success — Financial Performance Shareholder Value Revenue Operational Efficiency Access to Capital — Financial Drivers Customer Attraction Brand Value and Reputation Human and Intellectual Capital Risk Profile Innovation License to operate Driving Value Traditional Financials: Traditional Intangibles: SD / SRI Intangibles: Cash Flow Price/Earnings Price-to-Book Earnings Growth Etc… Quality of Mgmt Market Share R & D Commitments Patents Brand Name Partnerships Etc… Corp Governance Environmental Issues Community Relations Workplace Issues REPUTATION Employee Relations Human Rights Etc… Student Projects How to effectively measure impact on Sustainable Livelihood? — 5 Capitals—Social Capital most difficult — Baseline and On-going How to help communities manage their own development? — Development Foundation governance How to develop sustainable Small-Medium sized enterprises? — Serve Newmont effectively in Phase I — Diversify away from Newmont longer term Resources Aspen Center for Business Education (Aspen CBE) • Information on Aspen CBE’s work: http://www.aspencbe.org • Free, full-text teaching resources: http://www.caseplace.org International Council on Mining and Metals (ICMM) • To subscribe to ICMM’s Good Practice Newsletter, visit http://www.icmm.com/mailing-list • For more information, visit http://www.icmm.com or email ICMM at [email protected]