Newcrest to equate psychological safety to physical safety after CEO's apology

Newcrest Mining Ltd. will put psychological safety on par with physical safety after CEO Sandeep Biswas' recent apology for his "command and control" style of leadership that helped erode company culture.

Newcrest's latest internal organizational health survey showed a decline from 73% in 2019 to 68% in 2021, according to the company's 2021 sustainability report. The survey was skipped in 2020 due to the COVID-19 pandemic.

The company's culture had been improving since its organizational health survey started in 2014 until 2019, at which point the company's leadership realized it needed to be ramped up again, Biswas told a Feb. 17 analyst and media call.

The miner initiated a business strategy in 2018 in which safety, sustainability and people were tagged as "fundamental to the next stage of our transformation," according to Newcrest's 2018 annual report.

Newcrest's "inclusive leadership program" over the past year to year and a half started with the executive leadership team and moved down through the organization, focusing on psychological safety and "leading in a more inclusive manner," Biswas told analysts and media.

"We're now in the process of ramping that up, so that psychological safety is now going to be at the same level as physical safety in terms of how we approach it," the CEO said. "Our goal is to establish the same strong track record for that as we have for physical safety across our workforce."

The first half of Newcrest's fiscal year 2022 was a "challenging" time, as injury rates rose during the period due to a number of minor hand-related injuries, a trend that is "unacceptable," Biswas said.

The company also booked 20% lower gold production, 23% higher all-in sustaining costs and 46% lower basic earnings per share for the fiscal first half compared with the same period of the previous year. Newcrest's gold ore reserves rose 10% over the prior-year period to 54 million ounces, the company also announced Feb. 17.

Top-down change

When Biswas arrived as COO and executive director in January 2014 after Newcrest suffered from collapsing gold prices in 2013, the company "really needed a very top-down command and control style leadership to repair the balance sheet, get the focus on cash and pull ourselves out of the hole we'd got ourselves into," Biswas said.

"That took a lot of hard work and there were tough discussions both collectively and individually. As we pulled out of that around 2018 to 2019, we started to move toward a more collaborative style of leadership, with many leadership programs put in place involving those from the top down, starting with me."

Biswas, who was appointed managing director and CEO of Newcrest in July 2014, apologized in an interview with the Australian Financial Review published Feb. 14 for his "command and control" style of leadership following "confronting" revelations in internal company surveys.

While internal surveys showed "everyone understood what we had to do" during Newcrest's turnaround phase, it was clear employees "want to be more involved in running the business and be trusted to take more control," Biswas said.

Newcrest is now preparing a plan to achieve this in order to transform psychological safety within the group. Almost all of this is driven by internal staff feedback from various surveys, Biswas said.

"We've been taking this seriously for some time. We [as Newcrest's leadership] and I, in particular, recognize the need for change, and are totally committed to it," he said.

A dedicated project team is now in place for Newcrest's "Respect at Work" program to eliminate behaviors associated with sexual assault and harassment in the workplace, Biswas said.

"We want everyone to feel safe and empowered to speak out and to be included and to feel engaged," the CEO said.