The suspension is in connection with payments made for advisory services on the Simandou project in Guinea.
Davies was accountable for the Simandou project when the contractual payments were made to a consultant in 2011.
Rio Tinto launched an investigation into the matter in August this year, after it became aware of email correspondence relating to the payments. The investigation is led by external counsel and Rio Tinto has also notified the relevant authorities in the United Kingdom and United States, while it is in the process of contacting the Australian authorities.
The company said that Legal & Regulatory Affairs group executive Debra Valentine, has stepped down from her role, having previously notified the company of her intention to retire on 1 May 2017.
Rio Tinto said it intends to fully co-operate with any inquiries from the relevant authorities and could therefore not make further comment on the matter at this stage.