How we operate

Board structure and independence

The objective of the company’s corporate governance framework is to promote discipline, transparency, accountability and responsibility among various role players. Our values underpin the way in which we operate and the governance and engagement structures that we have put in place.

The Board and management, with the support of the various board committees to which specific tasks are assigned, is responsible for setting strategy and providing organisational oversight of the company.

At the end of December 2009, the board of AngloGold Ashanti comprised eight members, of whom six were independent, non-executive directors and two were executive directors. The chair of the Board of Directors is an independent, non-executive director of the company, as is the chair of the Audit and Corporate Governance Committee.

Each board committee is made up of a majority of non-executive directors. The Audit and Corporate Governance Committee, the Nominations Committee and Remunerations Committee, consist solely of independent non-executive directors.

AngloGold Ashanti actively engages with shareholders throughout the year as part of its investor relations initiatives. In 2009, senior management of the company met with 637 shareholders, fund managers and potential investors. Shareholders have the ability to submit their views to the board for consideration. They are entitled to vote on resolutions proposed by the company at general meetings and, in terms of legislation, can call a meeting of the company.

Expertise and performance evaluation of directors

Before any appointment is made, the qualifications, expertise, skills and experience of board nominees are evaluated, in the first instance by outside consultants and then by members of the Nominations Committee.

The performance of the board, the board sub-committees and individual members of the board is self-evaluated annually by the chairman of the board and/or the chairman of the board committees with guidance sourced from third parties such as auditing, consulting and advisory firms. The evaluation of the chairman is undertaken by the individual members of the board.

Non-executive directors receive only fees for carrying out their duties. These fees are not linked directly to the performance of the company but are approved by shareholders. Non-executive directors do not hold any service contract with the company and do not receive any compensation for loss of office, nor do they participate in the company’s share incentive scheme.

Executive directors receive performance bonuses, as approved by the Remuneration Committee, and are awarded long-term incentives, which vest only on the achievement of certain pre-determined company performance objectives.

Executive directors have elected not to be paid any fees for their role as directors of the company, and are remunerated in terms of their employment with the company. Service contracts entered into with executive directors contain change of ownership and loss of office clauses which may result in payment for loss of earnings for a period not exceeding 24 months.

Economic, environmental and social performance is considered integral to the management of the company and these aspects are taken into account when any senior manager or executive’s operational and individual performance is reviewed.

Reviewing economic, social and environmental performance

AngloGold Ashanti’s social and environmental performance is reviewed quarterly by its board committee on safety, health and sustainable development. The committee is chaired by an independent non-executive director and reports to the board of the company. The chairman of the Audit and Corporate Governance Committee was appointed to the Safety, Health and Sustainable Development Committee in 2009, to ensure integration between the Audit and Corporate Governance Committee and the company’s oversight of social and environmental performance. Economic performance is reviewed by the Audit and Corporate Governance Committee and by the main board of the company.

The Executive Committee, chaired by the chief executive officer, is responsible for overseeing the day-to-day management of the company and for executing the board’s decisions. The committee meets at least monthly to review the company’s safety performance, operational and exploration profiles and financial status. It also reviews any social and environmental issues of concern to the company. In 2008 an executive vice president: business sustainability was appointed to oversee the sustainability functions in the business and to represent these issues in the executive committee.

Management of sustainability issues at each operation is responsive to local needs and requirements. Managers of sustainability functions report to the general managers of each mine who in turn report into regional management structures.

A community and environment steering committee composed of senior personnel across the company who deal with community and environmental issues enables effective consultation on and communication of company policy within the disciplines. Regional community and environment heads have their own structures and experts in place to assist and advise operations in regard to meeting company requirements and these structures are replicated at a site level in order to ensure that the company’s policies are adhered to in practice.

Given the frequent overlap in the management of environment and community issues, the corporate environment and community governance reviews have been combined into the biennial Community and Environment Review Programme (CERP). The current review programme runs from 2009 to 2010 and is integrated into the standards roll out programme discussed above.

Policies and procedures

AngloGold Ashanti has implemented a number of policies, standards and guidelines, all of which are underpinned by the company’s vision, mission and values statements. It has in place a code of conduct and ethics which is in the process of being updated. The new code has been externally and internally reviewed and will be implemented in 2010, and training in the code at the group’s operations and regional centres will support the roll out of the code.

The company also has in place a conflict of interest policy which is communicated to all directors at induction. Directors are obliged to submit declarations of interest at least once annually to the company. Any changes during the year are reported to the board at each quarterly board meeting or at any meeting of the board, if required.

Further information on policies, standards and procedures in various sustainability disciplines is contained in the detailed reporting under our sustainability performance. All policies are applied across the group and are aligned, where relevant, with leading international practice. Copies are available on the company’s website.

In line with its corporate governance principles and in terms of the guidelines of the King Code on Corporate Governance 2002, the Sarbanes Oxley Act of the United States of America and the Protected Disclosure Act 26 of 2000, South Africa, the board of directors has put in place a confidential reporting process in terms of the corporate governance guidelines and requirements. The whistle-blowing policy applies to all companies in the group and provides a channel for shareholders, employees and the general public to report acts and practices that are in conflict with the company’s business principles, unlawful, financial malpractice or dangers to the public or the environment. Reports are made through several mediums including the intranet, internet, telephone, fax and post. An initiative is being undertaken to implement short messaging system (sms) as a medium for reporting as well.

All reports made in terms of the whistle-blowing policy are administered by a third party, Tip-Offs Anonymous, to ensure confidentiality and independence of the process. Reported cases are relayed to management through internal audit. A report is provided to the Executive Committee and the Audit and Corporate Governance Committee on a quarterly basis. Reporters have the option to request feedback on reported cases. The process encourages reports to be made in good faith in a responsible and ethical manner. Employees are encouraged to first seek resolution of alleged malpractices through discussion with their direct managers, if appropriate, and then, if not resolved, to report these through the whistle-blowing line or directly to internal audit or the legal department.

Since its introduction in February 2004, 257 cases had been reported as at 31 December 2009, of which 230 have been successfully investigated and closed.

Other mechanisms by which employees can raise concerns to the senior management of the company include regular employee surveys on values and behaviours, for example, the global survey of values and management behaviour currently underway, and the practice of regular communication, including quarterly briefings between senior management and employees.

Risk management

In 2009 the company made considerable progress on its approach to risk management through the implementation and rollout of a company-wide risk management system. This system is the starting point for determining our key sustainability issues for reporting and is a tool for ongoing management of the company’s sustainability risks and performance. It highlights the level of risk exposure, control measures and mitigation strategies for each risk.

The system is populated with information based on past performance and reporting and an ongoing programme of workshops conducted at operational, divisional and regional level. The risk information in the system is reviewed at least quarterly by discipline managers and by the executive committee and the board twice annually. The risk management team operates under the oversight of the Audit and Corporate Governance Committee and the board, and is backed by a group risk management policy statement and standard. In February 2010, the board approved the formation of the Risk and Information Integrity Committee which will over see this area of the company’s work.

Engaging with stakeholders

AngloGold Ashanti engages extensively with a range of stakeholders and social and business partners who have an interest in or are affected by the company’s activities. This engagement is driven by two major objectives, namely the need to consult with stakeholders on our activities throughout the life cycle of our operations; and the company’s wish to put in place mutually beneficial partnerships with the governments and societies in which we operate in order to contribute to a sustainable future for our host communities.

It is our view that consistent and structured engagement with stakeholders and social and business partners builds trust and fosters successful and beneficial long-term relationships. Failing to engage effectively can result in operational challenges and disruptions and can have a negative impact on the company’s reputation. Effective engagement includes developing an understanding of the key areas of shared concern of the company and its stakeholders, and developing engagement strategies based on this analysis. The frequency of interaction with key stakeholder groups is driven by local needs and the urgency and importance of the issue concerned.

During 2009 AngloGold Ashanti moved towards a more structured approach to stakeholder engagement. This included the development of a management standard on engagement. This standard will be finalised in early 2010 and rolled out at all of AngloGold Ashanti’s operations. The company’s main stakeholder groups, as identified in this standard, include:

• employees, their representatives and their families
• communities or individuals affected by the company’s operations, and their formal and informal representatives. These groups include communities which host our operations, including both long-term and newly-arrived residents, and communities from which we draw labour (labour-sending areas). Where relevant, we include in our definition of communities those who live alongside our major transport routes
• government, national, state or provincial and district or local authorities. In some jurisdictions, traditional leadership structures play an important role and are included within stakeholder engagement plans
• politicians, religious leaders, civic organisations, academics and other groups with special interests
• other businesses supplying, purchasing from or otherwise dealing with the company
• shareholders
• media
• joint venture partners
• advocacy non-governmental organisations (NGOs), human rights, social justice, environmental or other groups that seek to influence political and social decisions
• industry associations.

Key areas of focus in AngloGold Ashanti’s stakeholder engagement strategy for 2010 and beyond will include:

• ensuring consistent engagement with communities, social partners and governments throughout the life cycle of a project.
  Increasingly, we have started to focus on implementing structured engagement processes with stakeholders at an early stage in our project life cycle, in order to lay a solid foundation for operating in a way that ensures that we can develop longterm relationships which are mutually beneficial and enable us to maintain our social licence to operate.
• implementing an integrated approach to stakeholder engagement in order to ensure that the company speaks with one voice to all of its stakeholder groups at all times.
• ensuring accountability for follow-up on commitments made to stakeholders in the course of our engagements and feedback. This will include using our sustainability reporting more effectively as a tool for local engagement, through the development of Country Reports which present the company’s performance on issues that are material to local stakeholders in a way which is accessible to them. From 2010, we will have an external expert panel in place in order to ensure that external input is given into defining and addressing our material sustainability issues.

These efforts will position the company to ensure that it is able to implement effective solutions which are based on external as well as internal perspectives.

A major area of focus in 2009 was the inception of structured engagement processes with government, and the establishment of a government relations function at corporate level.

Commitments to external initiatives

As part of its engagement strategy, AngloGold Ashanti is committed to membership, or support for, several external initiatives which deal with key issues of concern to the company and its stakeholders.

The accompanying table summarises these memberships and the significant issues for AngloGold Ashanti in relation to each body. There are no significant differences between our policies in each area and those stated by the organisation concerned.

In addition to participation in these organisations, AngloGold Ashanti engages directly with governments and other stakeholders on public policy issues. It has recently established a government relations function to give public policy strategy a greater focus in business.

Commitments to external initiatives

Organisation or public body	Significant issues in relation to this organisation	Core positions on these issues held by AngloGold Ashanti
United Nations Global Compact (UNGC)	Implementation of the 10 principles of the UNGC through AngloGold Ashanti‘s business principles.	Business decisions are informed by our values, which are aligned with the 10 principles of the UNGC.
International Council on Mining and Metals (ICMM)	Defining the mining and metals industry’s commitment to the responsible production of the minerals and metals society needs. Support for the ICMM’s effort to define a leadership position for the industry’s commitment to responsible production. This includes the areas of health, safety, environment and community, materials stewardship, and the social and economic contribution of mining to society. These issues are all material to AngloGold Ashanti.	We have committed to implementing the ICMM Sustainable Development Framework, which comprises three elements – a set of 10 principles (including a set of supporting position statements), public reporting and independent assurance each approved by its CEO-led council. Our performance on each of the 10 principles of the ICMM is contained in this report.
Responsible Jewellery Council	Developing and refining a chain of confidence system for gold and diamond jewellery.	We are committed to responsible mining, refining and marketing of gold.
Global Reporting Initiative (GRI)	Defining and implementing global standards for non-financial reporting.	We are committed to reporting on an A+ basis against the GRI and to delivering non-financial reporting which is accurate and representative and is accessible to stakeholders. AngloGold Ashanti is an organisational stakeholder of the GRI.
International Cyanide Management Code for the Manufacture, Transport and Use of Cyanide in the Production of Gold (the Cyanide Code)	Promoting the responsible management of cyanide, ensuring that human health is protected and reducing the potential for environmental impacts.	We are committed to ensuring that all of our operations are certified against the Cyanide Code. Six of our operations were temporarily withdrawn from the Code during 2009 as some infrastructure modifications were required to meet Code specifications. Two of the six rejoined the Code during 2009; the others will rejoin the Code as soon as possible. For further information see the section on environment, community and human rights.
Extractive Industries Transparency Initiative (EITI)	Ensuring transparency in payments made to government.	We are committed to transparent and accurate public reporting on all payments we make to the governments of the countries in which we do business. We disclose all payments to governments, irrespective of whether the government concerned is a member of the EITI.
Voluntary Principles on Security and Human Rights (Voluntary Principles)	Defining guidance for extractive companies on maintaining the safety and security of their operations within an operating framework that ensures respect for human rights and fundamental freedoms.	We are committed to implementing the Voluntary Principles’ approach to security management. We report annually on our progress in implementing the Voluntary Principles and disclose these reports publicly on our website. For more detail, see the section on environment, community and human rights.