Mature social performance resourcing delivers better social performance
The connection between the size and structure of a mining company’s community relations team and its social performance is debated regularly in corporate offices and at mine sites. The standard response is that there is no one-size-fits-all approach and the right structure will depend on the context in which a company operates. This is certainly true – local context matters. But, the design and structure of corporate systems, including the size and structure of teams, are a key part of getting company social performance right and in ensuring positive social outcomes for local communities.
Companies need the right people in place to do the work needed to meet their commitments to social performance and more importantly, to develop meaningful relationships with communities and integrate social considerations in decision making.
Doing the bare minimum does not cut it anymore, especially in Canada. Communities want to, and deserve to be, treated as legitimate equal partners in mining development.
They want to be see sustained positive outcomes from mining activities that affect them. That requires effort and expertise on behalf of mining companies.
This does not mean that mining companies need bloated community relations teams or scores of consultants. In fact, hiring too many of the wrong people, or relying on consultants too much, can backfire. What matters the most when designing the size and structure of a community relations or social performance team are a few key factors.
Deliberately identifying the right number of experienced people needed to tackle social performance. What does this look like at both the corporate and site level? The right number of people is based on different factors, most notably the location of operations, nature of risks, the company’s history, compliance requirements from governments or lenders, as well as the nature of the company’s relationship with communities and other stakeholder groups. Typically, the more complex the operating environment, the more dedicated focus on social performance that is required and the more specific the expertise needed within the organization on topics like Indigenous Peoples, local procurement, or human rights.
Traditionally, companies operating in more complex environments hired larger social performance teams to manage social investment activities. As companies have learned that social investment may not deliver the best bang for the buck when poorly designed and implemented and when the company is not first focusing on managing its environmental and social impacts, they are moving away from this approach. Instead, more mature companies are thinking about the people needed to integrate social performance into the operation.
At the corporate and site level, companies have focused on identifying the right size of team to ensure senior leadership can focus on understanding and developing strategies, while lower-level staff can focus on more routine management tasks.
For example, a recent NetPositive review of Canadian mid-tier gold companies showed that corporate offices have an average of four staff. Most of those teams are led by a more senior person (for example, a vice-president who may cover environment or health and safety in addition to social performance), supported by managers or analysts dedicated to social performance issues.
Social performance teams must be integrated into decision making processes. While many companies have built internal capacity to address community-related topics, it is often siloed in separate social performance or community relations teams.
In the past decade, companies have learned that a large siloed team is often worse than a small highly integrated team taking a matrix approach. Instead, leading companies are using their enterprise risk management systems and valuation processes as tools to integrate social performance and their social experts in these processes. Integration ensures social risks are being communicated to senior management and managed throughout the organization.
Ensuring that there is consistency and continuity throughout the project cycle. At a site level, social performance teams need to be in place throughout the project cycle. Stakeholder engagement must start as early as possible but will change over the course of a project. This means that the right number of people and expertise required will also change over the course of a project. Consultants can help supplement a team, but a core in-house team improves consistency and relationships with key stakeholders.
Clear accountability is critical for ensuring consistency. NetPositive’s research has found that companies with fewer social performance resources rely more on informal systems for managing social issues, such as building and maintaining external relationships and resolving complaints and grievances. In these cases, roles and responsibilities are not typically clearly defined which can lead to confusion both internally and externally and a loss of trust with communities. Having dedicated social performance resources can mitigate these challenges.
The factors listed above are signs of a company’s maturity, which is what really matters when it comes to following through on commitments to responsible mining and achieving long-term positive social outcomes. Maturity does not mean a company has had a community relations policy for 20 years, but instead that it has the mindset and integrated system to manage social issues properly.
From a long-term value and business sustainability perspective, delivering positive social outcomes is the core reason for devoting resources and expertise to social performance.
Yet there is clearly a strong business case for the short-term as well. Companies with small and poorly structured social performance functions face risks to their business. The loss of a lone social performance resource can mean the loss of institutional memory and relationships within the organization and key stakeholders. Furthermore, with growing requirements for external reporting and compliance with regulations and lender and investor standards, smaller teams more often spend their time in ‘firefighting’ mode, keeping up with these requirements. As a result, the company is less able to keep track of and manage social risks and emerging issues which can affect its social licence to operate.
CAROLYN BURNS is director of operations at NetPositive, a non-profit that works with diverse stakeholders to help local communities see sustained positive outcomes from mining. JANE CHURCH is a co-founder and director of collaboration with NetPositive.