Richard Adkerson CEO of Freeport McMoRan: Global Challenges, Global Needs
My IconicVoices.TV interview with Richard Adkerson on the forces of globalization and the challenges of managing development in indigenous communities like the Congo (DRC) in Africa and Papua, Indonesia.
Mr. Richard C. Adkerson was named Chief Executive Officer of Freeport McMoRan on December 10, 2003. In each of the past four years, Mr. Adkerson was named The Best CEO in Metals and Mining by Institutional Investor magazine. Mr. Adkerson graduated with highest honors in 1969 and holds a B.S. and M.B.A. in Accounting in 1970 from Mississippi State University and completed Advanced Management Program at Harvard Business School in 1988.
JC: Richard, tell us how a boy from rural Mississippi ends up in the C suite?
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. It is really not a line because we can’t create value for our shareholders unless we operate ethically. 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 million 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. 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, we’re right in the middle of it. It makes life complicated at times.