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Annual report suite 2012

Abridged governance report

This section describes our approach to corporate governance. Our full Corporate Governance Report is available in the Annual Financial Statements.

AngloGold Ashanti believes that corporate governance is the bedrock of a sustainable business and consistently applies best practice in managing the affairs of the group. The company’s governance practices are guided by internal policies, external regulations and guidelines, including the Listings Requirements of the JSE, which extend to the King III report on corporate governance, and the requirements of other exchanges on which the company’s shares are listed.

In terms of the JSE Listings Requirements, the recommendations of King III are duly considered. After a gap analysis and action plan, the company has applied the principles of King III, as it continues to refine its governance processes and procedures. A register showing the company’s compliance with the principles of King III is available on the website. The company has also implemented the provisions of the South African Companies Act No 71 and will be proposing a new Memorandum of Incorporation at a shareholders’ meeting scheduled for 27 March 2013.

The duties and responsibilities of the company’s unitary board of 12 members are guided by a board charter. The Chairman of the board is elected annually and is an independent non-executive director. His performance is assessed every year as well as his independence.

The background and qualifications of each director are set out under board and executive management under Board and executive management.

New directors are appointed based on recommendations by the Nominations Committee. One third of the non-executive directors retire by rotation annually. However, the company’s new Memorandum of Incorporation provides for all directors to retire by rotation from 2013.

The determination of the independence of directors is in line with the requirements of King III, the Companies Act, the JSE Listings Requirements, the New York Stock Exchange and other best practice guidelines. The independence of each director categorised as independent is assessed annually by the board using the independence criteria.

When a director has been serving on the board for more than nine years, such director is subjected to a rigorous test of his independence and performance. The board may conclude that despite the long tenure, the skills and knowledge of the director are invaluable to the board and his independence of character and judgement are not in any way impaired by the long tenure on the board.

Non-executive directors receive fees for services, committee membership and international travel to attend meetings, as fixed by shareholders.

The performance of the board and its committees is assessed both internally and externally and the qualifications, competence and experience of the company secretary are assessed annually in accordance with the JSE Listings Requirements. For the 2012 financial year, internal assessments were completed and issues raised would be addressed in the course of 2013. The performance of the executive directors is assessed by the board annually in line with their contracts of employment.

Board committees

Eleven subcommittees have been established to assist the board in discharging its responsibilities. The functioning of the committees is guided by their terms of reference which are approved by the board and reviewed annually or as required. During 2012, all committees, except the Executive Committee were chaired by independent non-executive directors. Post year-end, the Health and Sustainable Development Committee is now chaired by a non-executive director.

Board committees include:

  • Executive Committee, chaired by the chief executive officer, is responsible for the day-to-day affairs of the company;
  • Audit and Corporate Governance Committee comprises four independent non-executive directors. This committee’s remit is broad and includes a review of the expertise and experience of the chief financial officer (CFO), performance and independence of the auditors, the financial results, major litigation reports and a review of any whistle-blowing activities. At its meeting held on 14 February 2013, the committee considered and confirmed that the CFO possesses the necessary expertise and experience to perform his duties;
  • Nominations Committee assists the board in identifying and assessing the eligibility of potential directors;
  • Risk and Information Integrity Committee assists the board in discharging its responsibilities relating to the governance of risk; the management of IT resources; and the integrity of information;
  • Safety, Health and Sustainable Development Committee seeks to ensure that operations are conducted in compliance with company policies in a socially responsible way;
  • Transformation and Human Resources Development Committee oversees compliance with laws on social transformation and the development of employees;
  • Remuneration Committee monitors and aligns executive remuneration with company performance and shareholder interests, and seeks to maintain remuneration standards aimed at attracting and retaining a competent executive team;
  • Social, Ethics and Transformation Committee came into effect on 30 April 2012. The committee assists the board in discharging its responsibilities as prescribed by the Companies Act and in terms of the company’s specific needs on sustainable development, compliance and ethics, transformation and localisation;
  • Investment Committee is required to assess individual capital projects to ensure that investments, divestments and financing proposals are in accordance with AngloGold Ashanti’s long-term objectives;
  • Financial Analysis Committee is an ad hoc committee that assists the board in assessing financial transactions. This committee did not meet during 2012; and
  • Party Political Donations Committee is an ad hoc committee which discharges the responsibilities delegated to it by the board in terms of the Party Political Donations policy. This committee did not meet during 2012.

Board and committee meeting attendance – 2012

The current composition of the board, each committee, the number of meetings held and attended

Director Board Audcom Remcom R&ll Nomcom SE&T SHSD THRC Invcom
TT Mboweni 10/10 5/6 3/3 4/4 4/4
FB Arisman 10/10 7/7 6/6 3/4 3/3 3/5 4/4
M Cutifani (3) 7/10 3/4 1/1 4/5 4/4 4/4
R Gasant 10/10 7/7 4/4 3/3
NP January-Bardill 10/10 7/7 3/3 1/1 5/5 4/4
MJ Kirkwood (1) 5/6 2/2 1/1 1/1 1/1
WA Nairn 10/10 6/6 4/4 3/3 1/1 5/5 4/4 4/4
Prof LW Nkuhlu 8/10 7/7 6/6 4/4 3/3 1/1 5/5 4/4
F Ohene-Kena 5/10 2/3 4/5 3/4
SM Pityana 10/10 5/6 4/4 3/3 1/1 5/5 4/4 4/4
RJ Ruston (2) 10/10 2/2 3/3 1/1 3/3 2/2
S Venkatakrishnan 10/10 4/4 4/4
  1. (1) Appointed to the board and Nomcom on 1 June 2012 and Remcom and Invcom on 1 October 2012.
  2. (2) Appointed to the board and Nomcom on 1 January 2012 and R&II, SHSD and Invcom on 1 June 2012.
  3. (3) M Cutifani was recused from attending two special board meetings convened to discuss matters relating to the chief executive officer and one other meeting, which he was unable to attend owing to an important industry meeting.

Key

Audcom:
Audit and Corporate Governance Committee
Remcom:
Remuneration Committee
R&II:
Risk and Information Integrity Committee
Nomcom:
Nominations Committee
SHSD:
Safety, Health and Sustainable Development Committee
SE&T:
Social, Ethics and Transformation Committee
THRC:
Transformation and Human Resources Development Committee
Invcom:
Investment Committee

Prescribed officers

In terms of the Companies Act, AngloGold Ashanti has determined that all members of the Executive Committee are prescribed officers.

The resumés of the prescribed officers are disclosed on Board and executive management of this document. The remuneration of prescribed officers is reported on an individual basis in the Annual Financial Statements. In addition the remuneration of the prescribed officers, which includes the three highest paid employees, other than executive directors, is also individually disclosed, as required by King III.

Given the geographical spread of the group, the legal and regulatory framework is diverse and complex. The group compliance department plays an essential role in co-ordinating compliance with laws and regulations, standards and contractual obligations and in assisting and advising the board and management on designing and implementing appropriate compliance policies and procedures.

In 2012 group compliance undertook a number of activities to enhance the group’s governance. These included:

  • awareness training on the Code of Business Principles and Ethics (Our Code);
  • the roll-out of anti-bribery and anti corruption training;
  • issue of a global communication on International Anti- Corruption Day in December emphasising the group’s zero tolerance for bribery and corruption, and re-affirming its commitment to the tenth principle of the UN Global Compact in working against all forms of corruption, including extortion and bribery;
  • revised and introduced new policies and procedures, including a new anti-bribery and anti-corruption policy as well as a new facilitation and extortion payments policy;
  • further automation of the group’s gifts, hospitality and sponsorships registers;
  • automation of the group’s conflicts of interests registers;
  • further efforts to track compliance with laws, regulations, standards and contractual obligations (at the country and group levels); and
  • further assessment of compliance risk in the group.

The head of group compliance attends Audit and Corporate Governance Committee meetings.

Values and ethics

King III is a valuable guide in the provision of ethical leadership. Our Code is the defining document explaining AngloGold Ashanti’s values and ethics. Our Code provides a framework and sets requirements for the implementation of key corporate governance policies and guidelines. Among other areas it addresses fraud, bribery and corruption, conflict of interests, gifts, hospitality and sponsorships, use of company assets, privacy and confidentiality, disclosures and insider trading.

The roll-out of Our Code, which started in November 2010, continued during the past year. An online training platform was launched in September 2012. Our Code is available in four languages on www.anglogoldashanti.com, the corporate intranet and in hard copy.

At the end of December 2012, a DVD was distributed in eight languages to all regions for roll out during 2013 to employees without access to computers.

Failure to live up to Our Code may result in disciplinary action. More serious transgressions may result in fines, jail sentences and other sanctions including suspension of AngloGold Ashanti’s licence to operate.

Anyone who becomes aware of a violation of Our Code is urged to communicate their concern to his/her line manager, the legal department, human resources or group compliance. There will be no retaliation towards any employee, director or officer who raises a concern in good faith.

The company has promoted its whistleblowing hotline, which is administered by a third party and provides the opportunity to employees and other stakeholders to report anonymously on alleged wrongdoing. All reports are investigated and the outcomes reported to the board through the Audit and Corporate Governance Committee.

Stakeholder engagement

AngloGold Ashanti values the contribution of all stakeholders and adopts an inclusive approach to stakeholder engagement. Our stakeholders include, amongst others, investors, employees, host communities, civil society groups and governments. There are various mechanisms through which stakeholders can provide recommendations to the board, including but not limited to: at the annual shareholders’ meeting; through the company’s website and email facilities; at investor meetings and roadshows, at employee forums; and through the whistleblowing facility.

For further discussion on Stakeholder engagement see our Sustainability Report.