Accountability

Corporate governance

AngloGold Ashanti has a unitary board that comprised nine directors in all at year-end 2014. Post year-end, the appointment of an additional two directors became effective.

Good corporate governance is an integral part of the group’s sustainability. Adherence to the standards and recommendations set out in the King III Report and other relevant laws and regulations is vital to achieving our strategic priorities.

Corporate governance forms an overarching framework in which our business operates and we are committed to promoting good governance and ethics within all areas of our business. To achieve this, the group continues to enhance and align its governance structures, policies and procedures to support its operating environment and strategy.

Application of King III principles

The application and adherence to the King III principles continues to be a key focus. AngloGold Ashanti reviewed its application of the King III principles against the JSE Listings Requirements through the Governance Assessment Instrument tool of the Institute of Directors Southern Africa and is satisfied that it has substantially applied the King III principles. A detailed analysis of the company’s compliance with Chapter 2 of the King Code of Governance for South Africa, dated March 2015, is available on the company’s website.

GOVERNANCE REVIEW

The company is governed by a unitary board of directors, the composition of which promotes the balance of power and authority and precludes any one director from dominating decision-making. Our board membership at year-end comprised nine directors, seven independent nonexecutive directors and two executive directors. Each year, one-third of AngloGold Ashanti’s directors retire and their re-election is subject to the approval of the shareholders at the annual general meeting.

The reappointment of non-executive directors is subject to eligibility and performance. The board is supported by its committees and has delegated certain functions to these committees without abdicating any of its own responsibilities. This process of formal delegation involves approved and documented terms of reference, which are reviewed annually.

It is the responsibility of our board to exercise oversight of governance throughout the organisation. We acknowledge that sound governance principles and practices underpin the creation of value and the sustainability of our business, and are thus crucial to the achievement of our business objectives. We also recognise that strategy, performance, sustainability and risk are inseparable. Our value-driven culture and code of ethics underpin AngloGold Ashanti’s governance structures and processes, committing the company to high standards of business integrity, and ethics in all its activities.

The governance of the company is guided by internal policies and external laws, rules, regulations and best practice guidelines, details of which are available on the company’s website, under corporate governance and policies. Our governance structures and processes are reviewed regularly and adapted to accommodate internal developments and reflect national and international best practices.

THE BOARD

Role of the board

The role of the board is for the mutual benefit of all stakeholders... [which] includes the setting, monitoring and review of strategic targets and objectives [for the company].

The overriding role of the board is to ensure our long-term sustainability and success, for the mutual benefit of all stakeholders. Its overall role is one of strategic leadership. This includes the setting, monitoring and review of strategic targets and objectives, the approval of capital expenditure, acquisitions and disposals, and oversight of governance, internal controls and risk management. The duties, responsibilities and powers of the board, the delegation of authority and matters reserved for the board’s authority are all set out in the board charter, which is available on the company’s website.

Board proceedings

The board meets six times a year, with additional meetings arranged when necessary. The strategies of AngloGold Ashanti are discussed and agreed on with executive management in an annual strategy session.

Role of the lead independent director and deputy chairman

In February 2014, given the then non-independence of the newly-appointed Chairman and in line with the recommendations of King III, the board appointed Prof Nkuhlu as lead independent director and from March 2014 as deputy chairman. The principal role of the lead independent director and deputy chairman is to act when the board Chairman is not present or is unable to perform his duties for any other reason, and to serve as liaison between the non-executive directors and the board Chairman.

Role of the Chief Executive Officer and the Executive Committee

The group’s Chief Executive Officer is responsible for the execution of the company’s strategy and reports to the board. He chairs the Executive Committee that comprises nine members, who is responsible for the day to day management of the group’s affairs. The committee’s work is supported by country and regional management teams as well as group corporate functions.

Chief Financial Officer

Christine Ramon was appointed Chief Financial Officer on 1 October 2014 following the resignation of Richard Duffy as Chief Financial Officer on 30 September 2014. As required by the JSE Listing Requirements, the Audit and Risk Committee, at its various meetings during the course of 2014, considered and expressed its satisfaction at the level of expertise and experience of Christine Ramon and Richard Duffy as Chief Financial Officers of AngloGold Ashanti during 2014.

The Audit and Risk Committee concluded that, they, together with other members of the financial management team, had effectively and efficiently managed the group’s financial affairs during the period under review as detailed in the included in the Chief Financial Officer’s report AFS.

Appointment and rotation of directors

The principles of King III are applied to ensure the effectiveness of corporate governance practices.

Several factors including the requirements of relevant legislation, best practice recommendations, qualifications and skills of a prospective board member and the requirements of the Director’s Fit and Proper Standards of the company, as well as regional demographics are considered in appointing board members. New directors are appointed pursuant to the recommendations of the Nominations Committee, which conducts a rigorous assessment of the credentials of each candidate. Newly appointed directors are elected at the next annual general meeting following their appointment and stand for approval by shareholders.

In terms of the company’s Memorandum of Incorporation (MOI), one third of the directors are required to retire at each annual general meeting and if they are eligible and available for reelection, will be put forward for re-election by the shareholders. The board has determined that the directors to stand for re-election are Nozipho January-Bardill, Professor Wiseman Nkuhlu and Rodney Ruston.

The summary of the background and qualifications of each director are set out under the section on the Board of Directors and on Executive Management of this report.

Remuneration of directors

Non-executive directors receive fees for their services as directors including fees for their membership of committees and an allowance for travelling internationally to attend meetings. These fees and allowances are fixed by shareholders at the Annual General Meeting. Following the review carried out and on the recommendation of the Remuneration and Human Resources Committee, the non-executive directors unanimously agreed that they were appropriately remunerated and rejected an increase in remuneration.

Further details of the executive and non-executive directors’ remuneration and fees are included in group note 35 to the financial statements AFS.

Directors’ interests

Directors are required to declare their interests annually and to disclose any conflicts of interest, if and when they arise, to determine whether there are any that conflict with their duties at AngloGold Ashanti. Once a conflict has been disclosed, it is managed appropriately by the board. A Declaration of Interest Register is updated by the company secretary and circulated at each board meeting.

Directors’ dealings in shares and closed periods

The Company Secretary informs the board and AngloGold Ashanti’s employees of its closed and prohibited periods, during which trade in AngloGold Ashanti shares by executive directors, senior divisional management and restricted participants in the company’s various share incentive schemes is prohibited. The closed and prohibited periods remain in force until the publication of the final and quarterly results. Any period where the company is trading under cautionary announcement is also classified as a closed and prohibited period. All directors’ dealings require the prior approval of the Chairman and the Company Secretary who retains a record of all such share dealings.

Independence of directors

King III provides that assessment of the independence and performance of directors who have been serving on the board for more than nine consecutive years should be more rigorous than for those who have been appointed more recently. As at 31 December 2014, none of the company’s independent directors had served for that length of time.

Determination of independence of directors is guided by King III, the Companies Act, the requirements of the JSE and the NYSE independence test, the company’s internal policy on independence, as well as best practice. All directors were found to be independent in terms of character and judgement and the chairman of the board became independent in November 2014.

Performance evaluation 2014

Key activities of the board and committees are aimed at promoting the economic stability of our business.

The board of AngloGold Ashanti requested the assistance of a facilitator to manage an evaluation of the performance of:

  • The board
  • The board chairman
  • The lead independent director
  • Deputy chairman
  • Individual directors
  • The company secretary
  • Board committees

The board further requested an evaluation of the independence of board members. The evaluation is carried out every third year by an external party and the other two years the Company Secretary facilitates the process.

The results were discussed by the Nominations Committee and the board in February 2015 and an action plan was being developed for areas of refinement.

Company Secretary

The Company Secretary, Ria Sanz, is responsible for developing, implementing and maintaining effective processes and procedures to support the board and its committees in the discharge of their duties and responsibilities. She advises the board and individual directors on their fiduciary duties and on corporate governance requirements and best practices.

In line with the JSE Listings Requirements, the board evaluated the qualifications, competence and experience of the company secretary in December 2014 and was satisfied that Ria Sanz is qualified to serve as company secretary. The board also confirmed her independence and her arms-length relations with the board, noting that she is not a director of the company and has no personal connections with any of the directors. Her qualifications and experience can be viewed in the sections entitled Board of Directors and Executive Management in this report and on the website, www.anglogoldashanti.com.

Post year-end events – changes to board of directors

Maria Richter and Albert Garner were appointed independent non-executive directors of the company, with effect from 1 January 2015.

BOARD COMMITTEES

Restructuring

The functioning of the committees is guided by the terms of references... which are reviewed annually or as required.

Following the restructuring of the committees of the board during 2014, the committees have achieved the anticipated expectation to cut cost, reduce meeting days and improve efficiency. The functioning of the committees is guided by their terms of references which were approved by the board during 2014 and are reviewed annually or as required.

The committees in place as at 31 December 2014 were as follows:
Audit and Risk Committee
Social, Ethics and Sustainability Committee
Remuneration and Human Resources Committee
Nominations Committee
Investment Committee

Audit and Risk Committee

Brief summary of responsibilities:

The Audit and Risk Committee oversees the integrity of financial reporting, the existence of proper internal controls, the integrity of the Integrated Report and risk management processes and assesses the company’s continuing ability to operate as a going concern. It will assist the board overseeing IT governance, risk management and the implementation of a group ethics and regulatory compliance programme. It will ensure the company has qualified external auditors and internal auditors. It will also assess the experience of the finance function and the Chief Financial Officer. More detailed information on the committee’s achievements is available in the committee chairman’s report AFS

The latest approved Audit and Risk Committee Terms of Reference, containing detailed information regarding the committee’s responsibilities and mandate, is available on the company’s website.

Social, Ethics and Sustainability Committee

Brief summary of responsibilities:

It is also the board’s responsibility to ensure that AngloGold Ashanti is and is seen to be a responsible corporate citizen.

The key responsibility of the committee is to assist the board in monitoring matters relating to safety, health and the environment, ethical conduct and to ensure that the company develops and behaves as a responsible corporate citizen. It will ensure that the sustainability strategy positions the company as a leader in mining and that the objectives are effectively integrated into the business. More information on the committee’s achievements is available in a SDR podcast interview with this committee’s chairperson.

The latest approved Social, Ethics and Sustainability Committee Terms of Reference, containing detailed information regarding the committee’s responsibilities and mandate, is available on the company’s website.

Remuneration and Human Resources Committee

Brief summary of responsibilities:

The Committee consists of three independent directors and is chaired by the Chairman of the Board. This committee assists the board in ensuring that AngloGold Ashanti’s remuneration policies are in its long-term interest. It will ensure that in terms of the decisions made, non-executive directors, executive directors, senior management and all other employees are fairly and responsibly remunerated and that shareholder value is delivered. It will assist the board in the development of the company’s human resources environment. More information on the achievements of the Committee is available in the Report of the Chairman of the Committee.

The latest approved Remuneration and Human Resources Committee Terms of Reference, containing detailed information regarding the committee’s responsibilities and mandate, is available on the company’s website.

ir/accountability/remuneration

Nominations Committee

Brief summary of responsibilities:

This committee consists of three independent directors and is chaired by the Chairman of the board. The committee develops processes to identify, assess and recommend board candidates for appointment as executive and non-executive directors, including the chairman, deputy chairman, lead independent director, chief executive officer, senior management and the company secretary, and at the same time gives full consideration to succession planning and leadership in the group. It reviews the board, including the balance of skills, experience and independence. It develops and implements annual evaluation processes, whether internally or externally.

The latest approved Nominations Committee Terms of Reference, containing detailed information regarding the committee’s responsibilities, mandate and policy on appointments to the board, is available on the company’s website.

Investment Committee

Brief summary of responsibilities:

This committee assesses individual capital projects and investment and divestment opportunities to ensure that investments, divestments and financing proposals are in accordance with AngloGold Ashanti’s primary objective of creating shareholder value on a sustainable long-term basis.

The latest approved Investment Committee Terms of Reference, containing detailed information regarding the committee’s responsibilities and mandate, is available on the company’s website.

BOARD AND COMMITTEE MEETING ATTENDANCE

The composition of the board and committees at the date of this report and attendance at meetings during 2014 are disclosed in the table below:

Name of Director Board Audit
and
Risk
Audit and
Corporate
Governance (12)
Risk
and
Information
Integrity (12)
Remuneration
and Human
Resources
Social,
Ethics and
Sustainability
Social,
Ethics and
Transformation(13)
Safety,
Health
and
Environment(13)
Nomination Investment
SM Pityana (1)8/8  1/14/43/32/21/17/71/1
RN Duffy (2)6/8        2/2
R Gasant (3)8/83/33/31/1    3/34/4
DL Hodgson (4)6/8    3/3   3/3
NP January-Bardill (5)7/8 2/3 3/33/32/21/13/3 
MJ Kirkwood (6)8/83/33/3 4/4 1/2 7/71/1
Prof LW Nkuhlu (7)8/83/33/31/14/4 2/21/16/72/2
KC Ramon (8)2/2         
RJ Ruston (9)8/83/3 1/11/1 2/21/13/34/4
TT Mboweni (10)2/3   2/2   2/31/2
S Venkatakrishnan (11)8/8  1/1 3/3   1/1
  1. 1 Sipho Pityana who was a non-executive director of the board since 2007, was appointed Non-Executive Chairman of the board of directors on 17 February 2014. Following a re-assessment during November 2014, he was declared independent. He stepped down as a member of the Investment Committee on 1 May 2014.
  2. 2 Richard Duffy resigned effective 30 September 2014 as Chief Financial Officer and executive director. He became a member of the Investment Committee on 1 May 2014.
  3. 3 Rhidwaan Gasant stepped down as a member of the Nominations Committee on 1 May 2014.
  4. 4 Dave Hodgson was appointed as an independent non-executive director on 24 April 2014. He became a member of the Investment Committee as well as the Social, Ethics and Sustainability Committee on 1 May 2014.
  5. 5 Nozipho January Bardill was appointed a member of the Remuneration and Human Resources Committee on 1 May 2014. She stepped down as a member of the Nominations Committee and the Audit and Risk Committee on 1 May 2014.
  6. 6 Michael Kirkwood was appointed a member of the Audit and Risk Committee on 1 May 2014. He stepped down as a member of the Investment Committee on 1 May 2014.
  7. 7 Prof Wiseman Nkuhlu was appointed Lead Independent Director in terms of the recommendations of King III with effect from 17 February 2014. With effect from March 2014, Prof Wiseman Nkuhlu was appointed Deputy Chairman. He became a member of the Investment Committee on 7 July 2014.
  8. 8 Christine Ramon was appointed Chief Financial Officer and executive director on 1 October 2014 and a member of the Investment Committee on 1 November 2014.
  9. 9 Rodney Ruston stepped down as a member of the Remuneration and Human Resources Committee and the Nominations Committee on 1 May 2014.
  10. 10 Tito Mboweni stood down as independent non-executive chairman of the board on 17 February 2014, and announced on the same day that he would not be standing for re-election as a director of the company at the annual general meeting on 14 May 2014. He stepped down as a member of the Nomination Committee on 1 May 2014.
  11. 11 Srinivasan Venkatakrishnan stepped down from the Investment Committee on 1 May 2014.
  12. 12 These two committees were dissolved in May 2014 as part of the restructuring and combined into the Audit and Risk Committee.
  13. 13 These two committees were dissolved in May 2014 as part of the restructuring and combined into the Social, Ethics and Sustainability Committee.

ETHICAL LEADERSHIP AND RESPONSIBLE CORPORATE CITIZEN

The board ensures at all times that the company is, and is seen to be, a responsible corporate citizen. The board not only considers the financial performance of the company, but also strives to enhance and invest in the economic life of the communities in which it operates, society in general and the environment. The Executive Committee is responsible for ensuring these values are adhered to. The board’s Social, Ethics and Sustainability Committee ensures the application of these principles.

The Code of Business Principles and Ethics (Our Code), launched in 2010, is the defining document on AngloGold Ashanti’s values and ethics. The board and management recognise the importance of ethical behaviour by all employees, directors and related parties at all times as we strive to generate competitive shareholder returns and create value for all stakeholders. The principles of King III facilitate the monitoring of the company’s performance from the perspective of ethics.

Our Code provides a framework and sets requirements for the implementation of key corporate 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.

Our Code has been translated into four languages and is available on the corporate website, the intranet and DVD.

AngloGold Ashanti holds all employees, directors and officers accountable for complying with Our Code and policies, in addition to applicable laws, regulations, standards and contractual obligations in the countries in which AngloGold Ashanti does business. Failure to live up to Our Code may result in disciplinary action being taken, up to and including dismissal. No employee, director or officer will be disciplined or otherwise victimised for raising a concern in good faith.

We have promoted our whistle-blowing communication channels that include hotlines, text messaging, email and web facilities, which are administered by a third party. Use of these facilities is promoted by means of posters at all locations. Employees, directors, officers and external parties may use the hotlines, anonymously if they wish, to report concerns. All concerns are carefully investigated and, wherever possible, feedback is provided to the person raising the concern upon request.

Sustainability is an integral part of how AngloGold Ashanti does business. Our commitment to achieving operational excellence in a safe and responsible way benefits all our stakeholders, including our employees, Government and the communities in which we operate. Our efficient use of resources, together with the provision of a safe and healthy working environment, contributes to the sustainability of our business and the environment.

The Serious Concerns Committee

The Serious Concerns Committee has been constituted to monitor and oversee governance internally at a senior level across the group.

The Serious Concerns Committee (SCC) is an internal oversight governance committee that became active in early 2014. Its primary responsibility is to discuss, review and engage with (as appropriate) allegations and investigations of unethical behaviour concerning senior-level employees across the group. The SCC will ensure that all individuals are accountable for violations of Our Code and related policies regardless of seniority or position. The SCC will also review reports related to the compliance programme (including whistleblowing, compliance training, gift declarations and conflicts of interest).

Membership of the SCC currently includes the Vice President – Group Legal, Ethics and Compliance (chairperson), the Senior Vice President – Group Internal Audit, the Chief Financial Officer, the Executive Vice President – Legal, Commercial and Governance and Company Secretary, and the Executive Vice President – People and Organisational Development. The SCC meet quarterly and on an ad hoc basis as appropriate.

LEGAL, ETHICAL AND REGULATORY COMPLIANCE

The group’s geographical spread makes its legal and regulatory environment diverse and complex. Given the critical importance of compliance in building a sustainable business, group compliance 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.

During 2014, group compliance activities aimed at enhancing the company’s governance. Key among these activities were:

  • the continued global roll-out of awareness training on Our Code by means of both online training, DVD training for those without computer access, and “in person” training on key risk areas
  • continued development of a compliance programme aligned with “best practice” principles identified by, among others, bodies responsible for the prosecution of violations of key extraterritorial legislation like the Foreign Corrupt Practices Act, and adaptable on an operational level to enhance the effectiveness of the compliance framework
  • development and adoption of a global supplier code of conduct and the implementation of a risk-based third party due-diligence process for both suppliers and agents/intermediaries
  • development and utilisation of a methodology for continuous improvement in compliance and a review of compliance policies as well as the use of compliance metrics in internal audits
  • the continued roll-out of online anti-bribery and anti-corruption training, as well as “in person” training at various operations
  • revision and issuance of new policies and procedures, including the development of an investigation reporting standard for the company and central database for recording incidents across disciplines (including legal, whistleblowing, security and group forensics)
  • assessment of the automated group gifts, hospitality and sponsorship and conflicts of interest registers
  • enhanced communication of compliance initiatives across the group through, among other channels, monthly newsletters and other corporate communications
  • additional efforts to provide automated access to track and monitor compliance with laws and regulations, including self-certification processes and legal register, by country

External and internal standards and voluntary codes

AngloGold Ashanti adheres strictly to legislative and regulatory compliance, including several external standards and voluntary standards which are listed below.

We are a member of and a signatory to the:

  • International Council on Mining and Metals (ICMM)
  • Principles of the United Nations Global Compact (UNGC)
  • Extractive Industries Transparency Initiative (EITI)
  • United Nations Guiding Principles on Business and Human Rights
  • Voluntary Principles on Security and Human Rights (VPSHR)
  • World Gold Council’s Conflict-Free Gold Standard (WGC CFGS)

We are committed to complying with the following standards:

  • Universal Declaration on Human Rights
  • International Bill of Human Rights
  • International Labour Organisation (ILO) standards

In addition, we have group policies and charters to which we adhere.

Increasingly, customers and consumers want assurance that the gold they are purchasing has not contributed to conflict or human rights abuse. This has resulted in a number of measures being introduced by industry-related organisations to prevent gold and other commodities being used to fund conflict and other violations of human rights.

AngloGold Ashanti’s shares are registered with the Securities and Exchange Commission (SEC) in the United States and therefore the company is subject to the various laws regarding securities that are applicable in that country.

South African Employment Equity Act 55 of 1998

In compliance with Section 21 of the Employment Equity Act 55 of 1998, the company is obliged to file with the Department of Labour, the employment equity statistics for its South African workforce. A report was filed with the Department of Labour on 10 December 2014, covering the period 1 August 2013 to 31 July 2014. A copy of the report is available on the AngloGold Ashanti website, under the section entitled Employment Equity Reports.

Governance – supply chain management and procurement policies

Supply chain management is about more than just procuring the right product, at the right time and in the right quantities. Effective supply chain management, undertaken with integrity and in line with our values and governance principles, can add value to our business by improving efficiency, relationships and reputation and, ultimately, affect our long-term sustainability. As a global company operating on most of the world’s continents, responsible management of the supply chain is an increasingly important ethical and human rights consideration for our business. External ratings agencies and customers are ever more aware of the implications and importance of ethical conduct in the supply chain.

Responsible supply chain management has the potential to add value to communities, local governments and society as a whole, and particularly in the case of developing countries.

We have adopted a cross-functional approach to supply chain management to ensure best practice while complying with international human rights and labour standards and ensuring the economic participation of local stakeholders.

Introduction Remuneration