Anglo American Platinum Limited |
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Governance
Corporate governance embodies the principles, strategic imperatives and practices that govern and control any organisation. Anglo Platinum management is committed to achieving the Company's business objectives, tempered with overarching values and fostered by a culture of caring and respect. Management remains fully cognisant of, and accommodates, the interests of both internal and external stakeholders and of third parties who are directly affected by the manner in and extent to which the organisation can safely and successfully achieve its objectives. At Anglo Platinum, good corporate governance provides the foundation and framework for sound commercial decision-making that is integral to successful, sustained corporate performance, and that optimises stakeholder value and ultimately shareholder protection. Succinctly put, our corporate governance is all about safe, profitable platinum and the passionate and proud team members who contribute towards the achievement of the Company's success.
Anglo Platinum ensures that good corporate governance is upheld by placing equal importance on all shareholders and stakeholders, and by insisting on compliance and enforcement to underpin shareholder protection, profitability and the sustainability of the business.
King II crystallised basic principles into guidelines that Anglo Platinum has embraced, facilitating sound business management, and highlighting the need for sound corporate practices, accountability, sustainability and transparency. More specifically, this becomes an all-embracing concept characterised by:
- conformity without compromising business flair and sound business operations;
- evidence of commitment by management to adhere to conduct that is universally recognised and accepted as sound and proper;
- the promotion of commercial longevity and profitability within a strategic framework;
- sound business processes, procedures and policies to mitigate risk and ensure optimum operations;
- business continuity and disaster recovery;
- non-financial aspects such as socio-economic environmental factors and social responsibility and economic empowerment initiatives;
- internal audit monitoring and review of internal controls designed to mitigate real, potential and future risks;
- Board responsibility for sound business practices and risk appetite; and
- compliance and enforcement.
Shareholder protection
Shareholders can derive comfort and protection from the fact that the Board and the management of the corporation are committed, perspicacious and sensible in their approach to running the organisation. This, in turn, protects and optimises assets, cuts costs and ensures that the business is profitable and sustainable into the future. Shareholder protection is served by a vested interest in the success, sustainability and future of the business that is achieved through a governance framework that operates within the confines of the law, compliance, policies and governance structures, economics and profitablity. Ultimately, shareholder protection is contingent on the Board's ability to turn strategic vision into economic reality, and on its innate ability and past record of exercising deft leadership and direction.
In addition to the minority and member protection clauses in the Companies Act of 1973, which houses a plethora of legal remedies to enforce member rights, there is also protection under the recently promulgated Corporate Laws Amendment Act, No 26 of 2007, which deals with the disposal of all or a greater part of the Company's assets. This now requires a special resolution passed by 75% of shareholders, as opposed to an ordinary resolution passed by a simple majority. The new draft Companies Bill also seeks to govern and fortify shareholder protection, thereby providing shareholder relief and remedy through governance structures.
At Anglo Platinum, shareholder protection is maintained through leading corporate governance systems, mechanisms and compliance, through which shareholders can raise issues. Board performance is monitored and assessed, and strategic decision-taking overseen. Risk management is a priority, and linked to important daily decisions. Effectively, risk management is a corporate strategic tool to ensure business success and profitability. Policies and clarified procedures ensure that rules and regulations are evenly and consistently enforced in the Company. Share-dealing procedures for directors and staff, confidential proprietary business information, material price-sensitive information and anti-insider trading policies conforming to the Securities Services Act, JSE Listings Requirements and existing corporate laws have all been implemented and are enforced.
Shareholder activism and equity value
A symbiotic relationship exists between the Company and its shareholders. Shareholders provide capital and the Company must optimise such capital to ensure profitable returns for its stakeholders. Wealth creation requires an environment that fosters forward thinking and competitive business activity. This entails focusing on investment returns, and developing effective technologies and business practices. Appropriate checks and balances have been implemented to ensure that Anglo Platinum is not exposed to unacceptable levels of operational, financial or reputational risk. Shareholders are encouraged to pose questions at the annual general meeting that are pertinent to the business and its general affairs and not just the business at hand requiring their approval. The Board of directors and management support all those cornerstones of governance that encourage transparency, probity and disclosure.
Ethics
Ethics are shown and practised at Anglo Platinum by promoting leadership and inculcating a culture of integrity and work ethic; by the observance of directors' fiduciary duties and responsibilities; by avoiding conflicts of interest and acting in the best interests of the organisation; by encouraging whistle-blowing; and by promoting the values and principles set out in our codes of conduct.
Systems, compliance and enforcement
Compliance with, and enforcement of, the Companies Act, Corporate Laws Amendment Act, JSE Listings Requirements and other legislation governing the mining industry ensures:
- communication and disclosure;
- financial and economic performance;
- effective leadership;
- respect for shareholder rights;
- the meeting of stakeholder obligations; and
- our embrace of the challenges of the business environment in which we operate.
Enforcement is the key challenge for the organisation. It is overseen by the Group company secretary and is achieved not by badgering and cajoling, but through firmly entrenched practices, that ensure:
- document and information management and retention;
- the electronic storage of information from a risk perspective;
- policies and procedures;
- our remaining cognisant of statutory updates and implications for the organisation;
- best practice;
- innovation;
- rethinking ways of optimising entrenched procedures; and
- the ability to build sound governance, which in turn produces benefits for shareholders.
Governance policies
A number of governance policies are enforced within Anglo Platinum and its subsidiary companies. These comprise, but are not confined to, the declaration of business interests, the declaration of gifts, gratuities and hospitality, anti-insider trading, confidentiality, anti-competitive behaviour, authority limits and a whole slew of general operational policies and procedures.
Authority manual
Anglo Platinum has an extremely detailed authority policy manual in place. Its objectives are to delegate transactional and contractual authority from the Board to Anglo Platinum staff and officials at various levels. This provides effective and practical directives and guidelines for minimising or eliminating the Company's possible exposure to risk emanating from the unauthorised actions of its officials. It also ensures that Anglo Platinum staff and officials fully understand demarcated authorisation limits, and strictly adhere to them.
Board structures and subcommittees
Anglo Platinum's Board of directors is ultimately responsible for, among other things, the Company's sustainable development performance and strategy. The Board meets quarterly and is responsible to shareholders for setting direction through strategic objectives and key policies, and monitoring implementation through structured reporting systems.
The Company has a unitary Board, comprising two executive directors (CEO and CFO) and 10 non-executive directors (five of whom are independent non-executives), as defined by King II. Recruitment is currently under way for an additional independent non-executive director. An announcement will be made in this regard once selection has been completed. One executive director was appointed after year end, on 1 January 2009.
The Board has a charter setting out its mission, role, duties and responsibilities, and in particular, the following:
- Directors' fiduciary responsibilities.
- Leadership of the Board.
- Induction of new directors.
- Evaluation of directors.
- Relationship between staff and external advisers.
- Unrestricted access to Company records.
- Board meetings and procedures.
- Executive succession planning.
The Board has affirmed its commitment to the principles of sound governance. It ensures that the Group's business is conducted in line with high standards of corporate governance, within the predetermined parameters of risk management and control, and in accordance with local and internationally accepted corporate practice. This, in turn, ensures conformance and compliance without impeding business performance.
The directors endorse the general principles espoused in the Code of Corporate Practices and Conduct set out in the second King report and believe that the Board applies these to the extent appropriate to the business.
The Board and management actively and continually review and enhance the systems of control and governance to ensure that the Group's business is managed ethically and within prudent risk parameters, in line with internationally accepted standards of best practice. A subcommittee of the Board is convened from time to time, to identify and deliberate on changes to the legislative and statutory environment, new business policies and matters of compliance. This ensures that the Board is kept apprised of new developments, and monitors and supports governance and sound business practice in the organisation.
There were changes to the composition of the Board of directors and executive management during the course of the year. Neville Nicolau was appointed chief executive officer and an executive director of the Board, Kuseni Dlamini was appointed as a non-executive director, Philip Baum resigned as a non-executive director and Tony Redman retired. Bongani Nqwababa was appointed chief financial officer and an executive director of the Board on 1 January 2009. Norman Mbazima and Duncan Wanblad resigned on 31 August 2008 and 1 July 2008 respectively upon their redeployment. Fritz Neethling was appointed executive head: projects and engineering and Mike Rogers was appointed executive head: operating joint ventures.
The Board has established a number of standing committees, which are ultimately accountable to it. These committees are a vital assembly of skills that seeks to concentrate on achieving set objectives and is designed to delegate Board functionality, assist and monitor the executive and ensure that dedicated functions are executed in the best interests of the Company and its stakeholders. A transformation committee was established at the beginning of the year. Its chief objectives are to embrace racial, cultural, ethnic and religious diversity and facilitate transformation and empowerment within the organisation; act in an advisory role and consider, encourage and support management in terms of all transformation issues. The role and representation of these subcommittees are listed here.
Except for the chairman, who receives a single inclusive fee, the Board and Board subcommittee members and chairpersons are paid a flat fee per annum, as recommended by the Executive Committee, noted by the Remuneration Committee and approved by the Board of directors and shareholders. This fee encompasses the responsibility of ensuring that each subcommittee, including the Safety & Sustainable Development Committee (S&SD), attains its core objectives in line with each committee's charter. Safety, health and sustainable development remain a key focus and core imperative of Board members.
Company executives are evaluated – and remunerated and rewarded – based on targets, key performance indicators and corporate objective weightings that include safety and sustainable development criteria.
Evaluation of the performance of all Board members and members of subcommittees is formally conducted annually by an independent third party, who confers with and assesses the Board of directors and subcommittees based on a self-evaluation process, and specific questions and criteria. Each director is encouraged to focus on his or her personal perception of the Board as a whole. (The process does not seek to evaluate individuals or their personalities.) Directors are also required to comment on the roles of the chairman and the Company secretary. A comprehensive report and feedback are delivered to the Board once the results of the interviews and assessments have been finalised. Feedback includes the assessor's thoughts on changes or developments that might assist the Board in becoming more effective and more efficient, with particular reference to future objective-setting, strategic thinking and prudent control. Board effectiveness assessments were conducted at the end of October 2008 by Professor Bob Garratt, an internationally respected figure who specialises in governance, corporate leadership, director development and strategic thinking.
Governance and our joint-venture partners
Anglo Platinum ensures that good corporate governance is upheld by placing equal importance on all shareholders and stakeholders, and by insisting on legal compliance and enforcement to underpin shareholder protection, profitability and the sustainability of the business.
Non-managed joint ventures are governed by monthly steering and management committee meetings and quarterly joint venture EXCO meetings at which Anglo Platinum has representation.
The agreements make provision for the management committees to constitute subcommittees to monitor areas such as employment equity, resource management, planning, production, safety, health, environment, audit, social-upliftment and remuneration.
Corporate governance embodies the principles, strategic imperatives and practices that govern and control any organisation. Anglo Platinum management is committed to achieving the Company's business objectives and the Company relies on these joint-venture management committees to fulfil and exercise its responsibility relating to the non-managed joint ventures. We do not specificaly require our joint venture partners to be OHSAS 18001 or ISO 14001 certified. We do however require them to be legally compliant with respective legislation.
Governance of sustainable development in projects
Environmental impact assessments (EIA) are compiled for all new projects in terms of South African legal requirements. Depending on the applicable legislation, either an EIA under the National Environmental Management Act, or an environmental management programme (EMP) report under the Minerals and Petroleum Resources Development Act, is compiled. Regardless of the authorising authority, the Group uses the same criteria for the complication of both types of impact assessments. During the pre-feasibility phase of projects, a scoping report is compiled after extensive stakeholder consultation. The scoping report defines the issues that should be investigated during the impact assessment stage. The impact assessment and proposed mitigation stages are completed during the feasibility phase of the project. The impact assessment contains specialist reports on all the potential impacts that the project may have, including socio-economic impacts. Consultation with stakeholders continues during the impact assessment and approval phases. Feedback is given to stakeholders after final regulatory approval of the documents. Apart from this external approval, all impact assessments are also peer-reviewed by Anglo American's technical department against its own criteria, which are based on international good practice and go beyond compliance. The criteria used fully embraces the concept of sustainable development.
Dust suppression sprays on Paardekraal tailings dam
Directors' attendance at Board and committee meetings in 2008
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The Board
The Board is responsible to shareholders for setting economic, social and environmental direction through strategic objectives and key policies, and monitors implementation through structured reporting systems.
| Frederik Phaswana† (chairman) | Bongani Khumaloº |
| Tom Wixleyº (deputy chairman) | Norman Mbazima*4 |
| Neville Nicolau*1 (chief executive o cer) | René Médori† |
| Philip Baum†2 | Valli Moosaº5 |
| Cynthia Carroll† | Bongani Nqwababa*6 |
| Kuseni Dlamini†3 | Tony Redman†7 |
| Richard Dunneº | Sonja Sebotsaº5 |
| Russell King† | Duncan Wanblad*8 |
| * Executive. | 4. Resigned 31 August 2008. |
| † Non-executive. | 5. Appointed 23 January 2008. |
| º Independent non-executive. | 6. Appointed 1 January 2009. |
| 1. Appointed 1 June 2008. | 7. Resigned 31 December 2008. |
| 2. Resigned 23 September 2008. | 8. Resigned 1 July 2008. |
| 3. Appointed 23 September 2008. | |
| * | Chairman. | |
| 1. | Attends committees by invitation. | 11. Resigned 30 November 2008. |
| 2. | Appointed 1 June 2008. | 12. Appointed 21 July 2008. |
| 3. | Resigned 31 August 2008. | 13. Resigned 23 September 2008. |
| 4. | Appointed 1 July 2008. | 14. Appointed 23 September 2008. |
| 5. | Appointed 1 January 2009. | 15. Appointed 21 April 2008. |
| 6. | Resigned 31 March 2008. | 16. Resigned 31 December 2008. |
| 7. | Appointed 1 September 2008. | 17. Appointed 21 April 2008. |
| 8. | Resigned 1 July 2008. | 18. Appointed 1 February 2008. |
| 9. | Resigned 31 August 2008. | 19. Appointed 23 July 2008. |
| 10. | Resigned 30 June 2008. |
