Rosalind Kainyah, president of De Beers Inc., USA, closed the Duke MBA Footprints Conference with a keynote address Wednesday at The Fuqua School of Business. Kainyah discussed De Beers' rigorous efforts toward developing strong relationships with the African countries in which it works.
The annual conference focuses on how positive and sustainable change can come from the joint work of the public, private and social sectors. Kainyah explained that De Beers' evolved approach to business mirrors the conference's theme of "transcending the bottom line through courageous leadership."
"We want the countries we work in to develop to their full economic potential," she said. "To do this, we focus on a few key aspects: building good relations with the government, fighting corruption and bad governance, building local management capacity, supporting education and skills development in the communities, supporting local enterprises, fighting HIV/AIDS and promoting environmental friendliness."
As a leader in an industry that became controversial over its alleged use of "blood diamonds" from troubled regions in Africa, De Beers was also accused of withholding supply of rough diamonds to force scarcity, artificially driving up their prices, according to The New York Times. This supply-based philosophy became tougher to maintain during the 1990s when new mines were found in countries such as Canada, Russia and Australia--where De Beers could not establish business relationships.
Kainyah addressed these concerns, noting that De Beers is now a demand-based company and has agreed to the Kimberly Process standards, which certify that its diamonds are "conflict-free." De Beers stopped buying from the open diamond market in 1999 and ceased direct mining in Sierra Leone in 1985, Kainyah said.
"We moved from maintaining high inventories of demands to maintain an eight-week inventory," she said. "That is to say the diamonds we will be selling to our clients have not yet come out of the ground because our sales are now attached to demand."
This change has driven De Beers to invest heavily in training and developing local workers, she said. Instead of shipping rough diamonds overseas to be cut in countries where labor is cheaper, Kainyah emphasized that completing the diamond refining process in the African nations is more economically sustainable in the long run.
"Diamond mining is a long-term business venture," she explained. "It can take up to 30 years before we see a profit on our investment. Therefore, we are going to such lengths to improve the communities in which we are working in so that we can have a stable, productive workforce and to maximize our value to the society."
Co-director of Footprints & Events Lee Wheeler-Berliner, Fuqua '09, said Kainyah's presentation directly addressed the conference's theme, adding that he was impressed with De Beers' activity in Botswana to encourage development of the economy.
"It is clear that they see the issue of sustainability as a core part of their business and they understand that they must... present a strong value proposition to their customers, employees, partners, and the communities in which they work," Wheeler-Berliner wrote in an e-mail.
Audience members asked questions on topics ranging from De Beers' business with the South African government and the company's specific efforts on environmental preservation.
Kainyah noted that De Beers is still challenged to build a good reputation in Africa in general.
"I think there is a lot of work to be done on the image of De Beers Africa-wide," she said. "We operate in only four African countries. However, in those countries in which we work, such as Botswana, we create jobs and improve the overall community and so they believe in us more and more. It's a case of people believing what they see."
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