These are years of massive transformation for Saudi Aramco, the world’s largest oil company and the lynchpin of the Saudi Arabian economy.
Overseeing and managing the world’s biggest proven reserves of oil and the fourth biggest reserves of natural gas, Saudi Aramco accounts – through the taxes, royalties and dividends it pays – for more than 90% of the Saudi Government’s income. As such, it is unquestionably the main economic driving force in the Kingdom with an important role in implementing the Kingdom’s economic policy.
How it fulfils that role has been the focus of much thought in recent years, says David Kultgen, the company’s General Counsel and secretary to the Saudi Aramco Board.
“Shortly after I took up my current post in 2010 our corporate management team engaged McKinsey to help us assess where we were as a company and where we needed to get to continue to fulfil our core mandate of overseeing and developing the Kingdom’s hydrocarbon resources, while at the same time contributing to the national agenda of economic diversification and job creation.”
The product of that exercise was the company’s “Accelerated Transformation Program” – a ten- to 20-year initiative designed to transform not only the structure of the company but also the impact it can have on reshaping the wider economy and addressing a range of pressing economic and social issues.
“The focus was on what we need to do as a company to perform our central role producing and distributing the kingdom’s oil and gas,” he says.
“But we also looked at what we need to do to be a catalyst for, and a driver of, job creation in a society with a very young population and a very large unemployment rate. In other words what we can do to help diversify the economy away from almost total dependence on oil and gas.”
The plan is to transform Saudi Aramco into a fully integrated and truly global energy and chemicals enterprise.
It involves further strengthening its upstream oil and gas business, setting up a new chemicals business capable of competing with the top four or five global players in the sector, and expanding and integrating the existing refining and marketing business with chemicals to make it more global. The company will also play a major role in developing the Kingdom’s power sector and will significantly increase its investment in oil, gas and chemicals-related R&D.
But there’s another critical part of the plan too, he says. “We are trying to address the systemic problem of how to plan and budget effectively, become more agile in our decision making and develop our young talent for the future.”
It’s a huge agenda and has inevitably had a significant impact on David’s own in-house legal team, which has nearly tripled in size since 2010 as the demand for legal services has increased. With the balance of external and internal legal spending shifting from 50/50 in 2001/2 to 90/10 in 2010/11, a key goal was to build up the law organization’s in-house capabilities.
By the end of this year, the headquarters legal team in Dhahran will have grown from 29 lawyers and 15 support staff in 2011 to 64 lawyers and 55 support staff, with a further 15 lawyers located in Houston, The Hague and Beijing. Eight separate practice areas have been created, along with a “Saudi practice” made up of locally trained, Arabic-speaking lawyers and a paralegal group of both English and Arabic language speakers.
If it sounds like an international law firm within a company, that’s not surprising, admits David. “I’ve been told by more than one external counsel that we are now the biggest law firm in Saudi Arabia, outside the government itself.”
Offering real opportunities to women
But the make-up of the team is particularly striking.
Working in a fully integrated workplace, the Dhahran office has seen the number of women lawyers grow from one in 2010 to seven today, while the number of women support staff has grown from 13 to 33.
Elsewhere, 40% of the Houston legal team and half of the lawyers in Beijing are women. An all-woman Hague law organisation office is led by a Saudi lawyer, Deema Hassan, who was the first Saudi woman to graduate from Saudi Aramco’s sponsored Law Program, recruiting young professionals from within the company and sending them to the United States to secure JD degrees.
The increasing presence of women is not confined to Saudi Aramco’s legal team – it’s a balance now common across many parts of the company, and overall just short of 10% of the group’s 62,000 employees are women.
And it’s not a new thing. The company took on its first female employee in 1964 and the numbers have been building steadily over the years.
The 1970s saw a significant increase, for two reasons.
“At that time, the company was still American-owned and managed. But the Kingdom also started educating women in earnest at about that time, both in secondary school and at university level, creating a whole new segment of potentially employable people that just wasn’t being tapped,” David says.
“So the decision to target women recruits and support their development was a values and responsibility driven thing. It started on a very small scale and has evolved steadily since then.
“Over the last ten to 15 years women have become increasingly a part of our workplace – at all levels within the company, including leadership positions – and today we have more talented and capable women at Saudi Aramco than ever before,” he says.
“But we’ve taken a gradual and sensitive approach to this. There is still a segment of society here that regards female employment as not a good thing and local labour regulations still stipulate that workplaces should be segmented. Outside Aramco, the medical professions, women’s universities and some of the international law firms and banks operating here, actively recruiting and developing talented women, is not yet widespread practice.”
Promoting change – internally
Today Saudi Aramco is measuring the impact of this much greater gender diversity through surveys, focus groups and extensive development programmes.
Its Women in Business programme, now in its fifth year, focuses on women’s development and how they can succeed in the workplace early in their careers. Nearly 900 women (or 61% of women in the workforce with less than ten years’ service) have gone through the programme. The “Women in Leadership” programme – now in its fourth year – targets women, both Saudi and expatriate, who are currently in, or who are likely to reach, leadership roles in the company. Nearly 60 women have taken part to date.
2014 saw the staging of Saudi Aramco’s first board-sponsored “Women in the Workforce Forum”, designed to inspire, celebrate success and gather insights for further initiatives. The forum was attended by 300 men and women actively involved in developing the company’s diversity agenda. These formal programmes and initiatives are also backed up by a well-established system of mentoring and coaching.
“It’s a work-in-progress but we are doing as much as we can to identify, recruit and retain talented women, including leaders, and to give them the experience they need to progress. Our head of and most senior female executive is Huda Ghoson and it’s no coincidence that we have a woman in this role. It’s one reason why there is so much energy and commitment behind our diversity programme.”
He admits that it is easier to promote this agenda in some areas of the business than others. “We have a number of clear challenges in certain areas – for instance in giving female petroleum engineers and geologists experience in the field. Drilling sites and production facilities, most in very remote desert locations, just aren’t set up to accommodate a mixed workforce at the moment.”
But, as he has seen in his own department, there are inventive ways to expand opportunities at a time when more and more women are emerging from university, hungry for opportunities. The paralegal team is a case in point. “We’re finding a lot of Saudi women with a degree in, say, English Language or Literature, are very good recruits for our paralegal team.”
Saudi Aramco is also positioning itself within the country as a thought leader on diversity – again moving sensitively on this issue.
Outreach programmes in schools and leading universities promote the approach the company is taking to diversity and the opportunities on offer to women recruits. Development programmes for women have been run through the Saudi Chamber of Commerce at 18 universities across the Kingdom. Now it is planning to start even earlier, offering after-school classes in science, technology, engineering and maths – the so-called STEM subjects – for 8th and 9th grade girls.
With the help of McKinsey again, the company is running a research and benchmarking project to boost its thought leadership in this area and to come up with recommendations on how to tackle the specific issues faced by working women across the Middle East.
David says that outreach programmes and events are popular and always well attended. The company’s influence on approaches to diversity is also being felt in new areas of society. The King Abdullah University of Science and Technology was developed by Saudi Aramco is modelled on the Saudi Aramco approach to workplace diversity – with mixed faculties and classes.
And David believes the business community can play a pivotal role in gradually changing attitudes. “Remember there is a very vocal segment of the female population advocating change. Some of them are prominent in the business community. They are probably in the best position to bring about that change.”
Mostly it’s a case of trying to bring society slowly along to where business is already, he says.
“How fast that change will come is hard to say – circumstances for working women are very different across the Middle East, even within the six countries that make up the Gulf Co-operation Council.
“Business can play an important role by creating much-needed jobs and opportunities for people and by demonstrating that change can bring real benefits to society without undermining its culture and its traditions.
“When people see the sort of benefits to be gained, it may be easier to secure change.”