Rio Tinto Limited (ASX: RIO) timidly (and all-too-cutely) titled its ASX release "Rio Tinto Executive Committee changes".
I guess they were updating the schedule of committee meetings?
Maybe adding a couple of people to the committee?
Nope.
The CEO (and Executive Director) JS Jacques is leaving the company, 'by mutual agreement'.
Oh, and "Chris Salisbury will step down as Chief Executive, Iron Ore with immediate effect" while "Simone Niven will step down as Group Executive, Corporate Relations".
'Changes', indeed.
It is perhaps a small point, given the magnitude of the destruction of the Juukan Gorge rock shelters in the WA Pilbara region.
But at a time when the company is scrambling to right some wrongs (or, at least, to ensure it acted meaningfully and decisively in the wake of the disaster), to use such weaselly words was, perhaps, unwise at the very least.
It's a small thing, though, in the bigger picture.
Three senior mining company executives are going to walk the plank, their positions being considered untenable.
It is almost certainly too little, too late. But it's something.
It's also notable because of the seriousness of the price being paid — because it's unusually harsh.
I'm not suggesting that it was inappropriate — you can argue it was both too lenient or too harsh, depending on your perspective — but it is unusual.
As I wrote to the team in an internal message this morning:
"I do think the pressure is ramping up on companies who are seen to break a social contract.
"It's not even close to the first time mining companies have mined / damaged important sites, but the Rio response is the strongest I can recall."
You can add that to the focus on CEO salaries over the past few years, and the more recent brouhaha over companies receiving JobKeeper support while also paying bonuses.
And then there's the ongoing fallout from the banking Royal Commission and the rolling debacle that is AMP Limited (ASX: AMP).
Corporate missteps are both more prominent, and being dealt with more harshly than I can recall.
There's always been scrutiny of the high-profile, self-styled corporate titans — think Bond, Skase and Packer — but both the magnifying glass and the blowtorch are being applied more strongly and in more places than ever before.
Is it a good thing?
It depends where you stand.
Some of our society like nothing more than a bit of outrage, and a head on a platter to sate the baying crowd.
Some take a legal perspective: if it's not precluded by law, it's fair game.
Others expect our companies to exhibit a standard of behaviour that meets a higher moral level.
And yet others don't care, personally, but want to make sure their companies don't end up corporate pariahs, with presumably negative consequences for their share prices.
It is, as ever, a complicated issue.
For all of that, though, CEOs and two direct reports don't leave a company on a whim.
Regardless of what camp you're in, it seems that the shareholders who matter (and who have the ear of directors) are requiring higher standards and more concrete consequences. And that, perhaps more than ever, high profile wrongdoing will attract media scrutiny.
Of course, that might not mean much — at least in concrete financial terms.
At the time of writing, shares in Rio Tinto were down 0.6% — almost exactly the same as the general fall on the ASX.
That's hardly a ringing endorsement, nor strong repudiation, of today's announcement.
And remember, at one point Altria — formerly known as Philip Morris, and one of the largest cigarette manufacturers in the world — was the best performing US stock, measured over half a century.
As ever — and especially in investing — don't follow the words, or even the actions.
As they say, follow the money.
But that's where it's worth paying attention. The money to follow isn't the share price, but the money being spent with the company.
Investor power might change CEOs, but consumer (or customer) power changes what companies do, and how they make their money — especially in our social media-powered world.
Whether you care about an issue or not, the ability of companies to operate in a way that keeps their 'social licence' intact is going to become an ever more important part of assessing their business plans.
Invest accordingly.
Fool on!
