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AngloGold Ashanti remains committed to the highest standards of corporate governance.
Corporate governance is addressed directly by the Audit and Corporate Governance Committee of the Board, although it is the responsibility of the Board as a whole. The Board is guided by the company’s founding statements, the Board Charter, the company’s legal obligations in terms of the South African Companies Act of 1973 and the US Sarbanes-Oxley Act of 2002, the company’s legal and disclosure obligations to the JSE (where it holds its primary listing), as well as various corporate governance guidelines, such as the King Code on Corporate Governance 2002.
A detailed discussion on corporate governance may be found in the company’s Annual Financial Statements 2007. The following summary is provided for information and context but is by no means a comprehensive review of corporate governance within the company.
A number of significant changes during the year have had a major impact on the AngloGold Ashanti group.
They are:
Other changes to the board during the year include the appointment of Mr Sipho Pityana, who is the executive chairman of Izingwe Holdings (Proprietary) Limited, and the resignation of Dr Sam Jonah.
As a result, as at 28 February 2008, the AngloGold Ashanti Board comprises 12 members (2006:17), of whom:
There are eight board sub-committees that meet on a regular basis. (A decision was taken during the year to dissolve the Marketing Development Committee.) The sub-committees comprise members of the Board and have written terms of reference. The committees are:
The responsibility for the oversight of safety, health, environment and community issues falls under the Safety, Health and Sustainable Development Committee. Members of this committee, which is chaired by Mr Bill Nairn, met on five occasions during the year. Mr Sipho Pityana is the Deputy Chairman. Management representatives are invited to attend the meetings, with the primary agenda item rotating from meeting to meeting. Safety is always on the agenda.
The company’s ethical performance is guided by its mission, values and business principles.
Safety, health and environmental performance, and relations with government, community members and other stakeholders form an integral part of the management of operations. These aspects are considered when operational and individual managers' performance is reviewed. Safety targets and performance in particular form part of the remuneration policy for senior and middle management at operations.
The assessment, mitigation and management of risk is an integral part of the management of safety, health, environment and community issues. The Board, which has ultimate responsibility for the total risk management process, reviews and approves the risk strategy and policies that are formulated by the executive directors and senior management. Management is then accountable to the Board and has established a group-wide system of internal control to manage significant group risk.
A full review of risk, control and disclosure is undertaken twice a year and considers key findings from ongoing monitoring and reporting, management assertions and independent assurance reports. This is then reported to the management committee, the executive committee and the Board Audit and Corporate Governance Committee. Due cognisance is taken of the precautionary principle in our risk identification and assessment processes. In line with our adoption of the ICMM Sustainable Development Principles and Framework, we implement sound risk assessment using and science-based data and methodologies.
As part of the introspection associated with the restructuring process in late 2007/2008, AngloGold Ashanti has been reviewing its mission and values and will, in time, review the company’s business principles.
Our mission remains to create value for our shareholders, employees and business partners/stakeholders through safe and responsible exploration, mining and marketing of our products. The process of review has started with consultation with senior managers, and will be rolled out to employees during the course of the year.
Independent risk assurance processes are undertaken in many corporate functions, including safety and health, environment, community relations and mineral resource management. The corporate technical team also covers critical risk areas such as the potential for slimes dam and slip wall failure.
The Board is informed and takes account of material changes and trends in the group’s risk profile. A full discussion on the risk management process and some of the risks that could materially affect AngloGold Ashanti may be found in the Annual Financial Statements 2007.
AngloGold Ashanti’s in-house legal counsel in the various jurisdictions in which the company operates work closely with the corporate legal function in Johannesburg in ensuring that significant legal issues considered as part of the risk management process are brought to the attention of the Audit and Corporate Governance Board Sub-Committee, which is responsible for risk management. A register of litigation matters where AngloGold Ashanti has a possible financial exposure is maintained and reviewed on a quarterly basis.
The following is a summary of significant legal issues during the year under review and feedback on those reported in 2006. Note that AngloGold Ashanti defines a significant legal issue as any issue that could result in a liability to the company of $1.5 million or higher and/or which could have an adverse effect on the company’s reputation as assessed by the company executive.
AngloGold Ashanti filed the exception to the potentially precedent-setting legal action on the basis that mine employers are insured in terms of the Occupational Diseases in Mines and Works Act (ODMWA) and the Compensation for Occupational Injuries and Diseases Act (COIDA) against compensable diseases and this prevents any delictual claims by employees against employers. The matter was heard in the High Court in early February 2008 and a response is anticipated within the first quarter of 2008.
In response to the effects of silicosis in labour-sending communities, a number of mining companies (under the auspices of the Chamber of Mines), together with the National Union of Mineworkers (NUM) and the national and regional departments of health have embarked on a project to assist in the delivery of compensation and relief to communities that have been affected. (See case study on The Former mineworkers project and making ODMWA work – one year on and on addressing socio-economic needs – the Nongoma Abalimi Phambili project).
There were no legal actions against the company for anti-competitive behaviour, anti-trust or monopoly practices during the year. No significant fines were received during the year for non-compliance with laws and regulations. Non-compliance with environmental permits resulted in a 12-day shut down of operations at the Obuasi tailings facilities in Ghana and a number of Section 54 instructions in terms of the Mine Health and Safety Act. (See Legal ramifications of safety and the case study on Dealing with environmental legacies at Obuasi: an update).
We recognise that a wide range of people – employees, their families, communities and others – have an interest in the operation of the business. While generally, these external parties are referred to as stakeholders, we consider that these people are in fact partners in our business in that they have a material stake in whether our operations begin, continue or close and the way in which they are affected them during this process.
We have a wide variety of formal and informal structures in place to deal with our stakeholders and business partners - (See Engaging with our stakeholders) - and a comprehensive but not exhaustive list of these appears at Engaging with our stakeholders.
AngloGold Ashanti firmly believes in self-regulation and that industry leaders – locally and internationally – should establish robust standards against which companies should perform and be measured. It is the company’s experience that these standards very often become the foundation for international law and good practice.
At an operational level the company is involved in a range of organisations and initiatives which guides its actions. At a corporate level, we are not only members of or signatories to the following, but actively support their aims and objectives and participate in their development and functioning:
| Organisation | Date of adoption/ membership | Aims | AngloGold Ashanti’s participation |
|---|---|---|---|
| United Nations (UN) Global Compact (www.unglobalcompact.org) | August 2004 (Ashanti, August 2001) | The Global Compact provides a framework for businesses that are committed to aligning their operations and strategies with 10 universally accepted principles in the areas of human rights, labour, the environment and anti-corruption. | The principles of the Global Compact are considered by the company, and are reported against in the Report to Society. See GRI section. |
| International Council of Mining and Metals (ICMM) (www.icmm.com) | Founding member in 2001 | The ICMM was formed by the world’s leading mining companies to develop a leadership position in sustainable development. ICMM members believe that the mining, minerals and metals industry acting collectively can best ensure its continued access to land, capital and markets as well as build trust and respect by demonstrating its ability to contribute successfully to sustainable development. | AngloGold Ashanti actively participates in several programmes run by the ICMM, and reports against the ICMM principles in the Report to Society. |
| Council for Responsible Jewellery Practices (CRJP) (www.responsiblejewellery.com) | Founding member in 2006 | The Council’s aim is to promote responsible ethical, social and environmental practices throughout the diamond and gold jewellery supply chain, from mine to retail. | AngloGold Ashanti has participated in the drafting of the codes of practice which are currently being reviewed through a consultation process. |
| Communities and Small-scale Mining (CASM) (www.casmsite.org) | Member | CASM is a collaborative group aimed at poverty reduction by improving the environmental, social and economic performance of artisanal and small-scale mining in developing countries. | AngloGold Ashanti holds a seat on the Strategic Management Advisory Group (SMAG) of CASM. As part of the SMAG, AngloGold Ashanti participated in a discussion regarding ASM policy and regulation with the governments of China and Mongolia. The SMAG also plays a governance and advisory role to CASM and as such the two groups met twice last year. |
| Global Reporting Initiative (GRI) (www.globalreporting.org) | Organisational Stakeholder of GRI, formed in 1998 | GRI has pioneered the development of the world’s most widely used sustainability reporting framework. The framework sets out the principles and indicators that organisations can use to measure and report their economic, environmental, and social performance. | AngloGold Ashanti’s 2004, 2005 and 2006 reports were compiled in accordance with GRI 2002. The 2007 report has been compiled in accordance with GRI’s G3 guidelines. |
| Extractive Industries Transparency Initiative (EITI) (www.eitransparency.org). | AngloGold Ashanti supports the EITI (PDF - 40KB), (formed in 2002) through the ICMM. Among the countries in which AngloGold Ashanti operates, Ghana and Guinea are currently candidate countries in terms of EITI reporting. | The EITI is a coalition of governments, companies, civil society groups, investors and international organisations. It supports improved governance in resource-rich countries through the verification and full publication of company payments and government revenues from oil, gas and mining. | AngloGold Ashanti will report in line with EITI in 2007 as far as this is possible (in line with any host country legislation). See report on Payments to government. |
| International Cyanide Management Code for the Manufacture, Transport, and Use of Cyanide in the Production of Gold (Cyanide Code) (www.cyanidecode.org) | Founding signatory to the Code. | The Cyanide Code was developed by a multi-stakeholder steering committee under the guidance of the United Nations Environmental Program (UNEP) and the then International Council on Metals and the Environment (ICME). The code is an industry voluntary programme for gold mining companies. It focuses exclusively on the safe management of cyanide and cyanidation mill tailings and leach solutions. Companies that adopt the code must have their mining operations that use cyanide to recover gold audited by an independent third party to determine the status of code implementation. Those operations that meet the code requirements can be certified. The objective of the code is to improve the management of cyanide used in gold mining and assist in the protection of human health and the reduction of environmental impacts. | Sunrise Dam Gold Mine in Australia received conditional certification in line with the Code in March 2007 and full certification in January 2008. CC&V in the USA and the four Vaal River (South Africa) gold plants were fully certified in September 2007. The Savuka and Mponeng gold plants (West Wits) were conditionally certified in September 2007. |
| Voluntary Principles on Security and Human Rights | Developed in 2000. AngloGold Ashanti was accepted as a signatory in May 2007. | The Voluntary Principles were developed out of a multi-stakeholder process involving governments, resource companies and NGOs as a means of helping companies in the extractive sector to improve their performance in relation to security risk assessment and the control of security operatives, and to improve relations with communities on security issues. | The company has begun the process of formulating a roll-out strategy for the Voluntary Principles across all operations. These include involving senior management in the Voluntary Principles as they apply to the company, developing implementation guidelines, and undertaking training of company security personnel inside the organisation. Countries which we have prioritised for the roll-out of the principles include: Colombia, DRC, Ghana, Guinea and Tanzania. |
AngloGold Ashanti subscribes to a policy of full, acurate and consistent communication in respect of both our operating and financial affairs.
Through our business principles, we have committed ourselves to “fully, accurately and in a timely and verifiable manner, consistently and fairly disclosing material information about the company and its performance. This will be done in readily understandable language to stakeholders, the public and appropriate regulators.”
A formal Disclosures Policy has been adopted by the company to guide and ensure compliance with the rules of the various exchanges on which AngloGold Ashanti is listed and provide timely, accurate and reliable information to stakeholders, including investors and potential investors, regulators and analysts.
This disclosure policy covers all employees of AngloGold Ashanti and its subsidiaries and the members of the Board of Directors.
The company’s policy (which is available on the website) deals specifically with communications with stock exchanges, disclosure standards, methods for public disclosure, regular disclosure and market guidance, other meetings, presentations and disclosure, mine site visits, group meetings and presentation, private meetings with analysts and investors, communication of information on the website, authorised spokespersons, dealing with rumours and market speculation, and closed periods.
Adherence to this policy is guided by the company’s Disclosure Committee which meets on a regular basis.
AngloGold Ashanti believes that the principle of multiparty democracy as contained in the founding provisions of South Africa’s young constitution deserve support and that, in particular, our financial support for political parties will aim to promote political competition, public scrutiny of policy and law-making. Its purpose is not to advance the company’s immediate, narrow commercial interests, though the company will continue vigorously to argue the case for good governance in the broader sense. It will also aim to encourage a policy-making environment in which there is a healthy and robust competition of ideas.
A sub-committee comprising independent non-executive members of the board has been set up specifically to deliberate on any political donations. The committee did not meet during the year and no political donations were made. The policy will be reviewed in 2008.
AngloGold Ashanti is considering the extension of this policy to all operations. No political donations were made by any operations within the group.
AngloGold Ashanti endeavours to do business with those companies that share its business ethics and values.
Human rights screening is an important part of the group's investment decisions and in reviewing prospective contractors and business partners. As part of the full group's implementation of the Voluntary Principles of Human Rights and Security toolkit, this process is being formalised. The group's policy on Security and Human Rights applies equally to contractors as it does to the company itself. A specific module of the group's toolkit includes a section on the interaction between the company and private security contractors. As the toolkit is fully implemented in 2008, first in those areas deemed to be of a high risk, so a greater understanding of the current status of contracts, contractors, suppliers and other business partners will be gained and further details will be made available.
The group’s procurement and supply chain operations ensure the application of the AngloGold Ashanti principles at two levels.
Interaction with contractors and suppliers takes place formally on an annual basis, primarily in respect of gifts and hospitality, but also in respect of the company’s values and business principles. We have a white-collar crime unit in place that investigates suspected fraud, malpractice and unacceptable activities and a Supplier Monitoring Committee that considers and takes action against contractors or suppliers that are found to have breached our code of ethics.
Further work will be undertaken during 2008 in formalising these practices into policies and handbooks and ensuring that these are generally and consistently applicable across the group. While guidelines were developed during the year to support this effort, these have not yet been issued as the company is going through a process of reviewing and re-establishing its business principles.
AngloGold Ashanti has a number of policies and procedures in place to ensure that employees are aware of what is expected of them and conform as appropriate. Induction of all employees in respect of these policies and procedures is mandatory. Policies that are in place include:
Employees are encouraged to discuss issues with their direct managers first (if appropriate) and then, if not resolved, to report these through the whistle-blowing line or directly to the internal audit or legal departments. The codes and the whistle-blowing policy are available on the company’s website. In 2007, several initiatives were put in place to promote awareness of the codes and the policy to all levels of employees.
All reports made in terms of the Whistle-blowing Policy are fielded by a third party, Tip-Offs Anonymous, which ensures all reports are treated confidentially or anonymously depending on the preference of the caller. The information is relayed to management and internal audit for investigation. Feedback on reports is given when requested. A report is provided to the Executive Committee and the Board Audit and Corporate Governance Committee on a quarterly basis. Both codes and the whistle-blowing policy are available on the company website. In total, there were 39 cases reported in terms of the whistle-blowing policy in 2007 (2006:29), nine of which remained in progress. The results of the whistle-blowing procedure are reflected in the graph.
| Categorisation | Completed | In progress | Total number reported |
|---|---|---|---|
| Bribery and corruption | 3 | 3 | 6 |
| Criminal activity | 1 | 0 | 1 |
| Enquiry | 2 | 0 | 2 |
| Fraud | 4 | 1 | 5 |
| Grievance | 0 | 1 | 1 |
| Irregularities | 12 | 3 | 15 |
| Misconduct | 4 | 1 | 5 |
| Unethical behaviour | 2 | 0 | 2 |
| Unfair labour practice | 2 | 0 | 2 |
| Total | 30 | 9 | 39 |
AngloGold Ashanti does not conduct extensive marketing programmes. The company’s investor activities are indicated in the Annual Financial Statements and on the website. No sanctions or non-adherence with codes or regulations were reported in 2007.
AngloGold Ashanti Annual Report 2007 – Report to Society