While some CEOs call for more aggressive culture, Jakob Stausholm speaks out against ‘toxic environment’
In a pointed reflection on workplace culture, Rio Tinto’s outgoing chief executive Jakob Stausholm has warned that harsh, high-pressure environments can stifle employee performance by fostering risk aversion.
Instead, Stausholm insists that true excellence is only possible when workers feel psychologically safe—a view he credits to Harvard Business School professor Amy Edmondson, whose research on “psychological safety” has gained global recognition.
Stausholm’s comments, reported by the Australian Financial Review (AFR), come as he prepares to step down after more than four years at the helm of the mining giant.
Creating psychological safety
Stausholm’s remarks were prompted by recent comments to the AFR by Westpac CEO Anthony Miller about his intention to instill a more aggressive culture at the bank. While Stausholm refrained from directly criticizing Miller’s approach, he made it clear that he favors evidence-based strategies over anecdotal management philosophies.
“You want to be super ambitious and aim for the moon, and you can only do that in an effective environment when you create psychological safety,” Stausholm told the AFR.
During his tenure, Stausholm made cultural reform a top priority at Rio Tinto, following internal surveys in 2021 and 2024 that revealed widespread bullying and harassment. He acknowledges that progress has been made but admits that elements of a “hardened culture” persist, which can undermine employee confidence and innovation.
“There are too many companies that try to go to high standards, that doesn’t have psychological safety, and it really leads to a very toxic environment,” Stausholm said in the AFR.
“If you have fear in the system, then a lot of the energy goes to self-defence. You just don’t get people to perform well in a very harsh culture. It is a misperceived concept that toughness leads to high performance.”
Fostering ‘human connections’
The debate over workplace culture has gained international traction, with AT&T chief John Stankey recently advocating for a “market-based culture” in the United States.
Stausholm, however, maintains that fostering “human connections” and trust among colleagues is the foundation for constructive teamwork and ambitious goal-setting—a perspective he reiterated in his interview with the AFR.
Stausholm is set to retire from Rio Tinto on August 25, handing over leadership to Simon Trott, the company’s iron ore chief. As he steps away, Stausholm has not yet determined his next move, stating he will take time to reflect.
Rio Tinto’s progress on culture
Recently, Rio Tinto released the findings of an independent Progress Review on its workplace culture, two years into a comprehensive transformation program. According to a company statement, the review—conducted by former Australian Sex Discrimination Commissioner Elizabeth Broderick—found that while Rio Tinto had made “promising” advances in culture, innovation, and performance, problematic behaviors remain in some areas and require sustained attention.
Broderick, who led the original Everyday Respect review in 2022, praised Rio Tinto’s transparency and commitment to change, noting that “progress is evident and there is an ongoing commitment to this work.” She added, “With sustained focus from Rio Tinto, we should expect to see the positive change spread over time.”
The review, which incorporated feedback from more than 11,600 employees and contractors worldwide, found that the majority of the 26 recommendations from the 2022 Everyday Respect Report had been implemented. Survey data revealed that about half of respondents perceived improvements in bullying, sexual harassment, and racism, though a significant minority still reported negative experiences. For example, 39% of respondents said they had experienced bullying—up from 31% in 2021—while 7% reported sexual harassment, a figure unchanged from previous years.
‘Unacceptable and harmful’ behaviours
Rio Tinto’s leadership, including Stausholm, acknowledged in the statement that “people are still experiencing behaviours and attitudes in our company that are unacceptable and harmful.” He offered a public apology and reaffirmed the company’s determination to “stay the course” in pursuit of a safer and more inclusive workplace.
Key initiatives in the next phase of Rio Tinto’s cultural overhaul include expanding employee resource groups (ERGs), linking career advancement to behavioral standards, and deepening leadership training, said the company.
The company also plans to extend its Cultural Connections Program internationally and ensure all contractors participate in relevant training.
