At the end of December 2008, the board of AngloGold Ashanti comprised 10 members (2007: 17). It should be noted that:
In October 2008, the board reviewed its definition and criteria for determining which of its members qualified as being independent.
The board is guided by a board charter that governs its powers, functions and responsibilities. Among other issues, potential conflicts of interest are a standing item on the boards agenda. The board met on 11 occasions in 2008, including three subcommittee meetings of the board. A formal process is in place to determine the qualification and experience of board members and potential Board members. A formal and regular process is in place to evaluate the performance of the board.
There are eight board subcommittees that meet on a regular basis to facilitate the activities and deliberations of the board. The subcommittees comprise members of the board and have written terms of reference governing their powers, functions and activities. Members of board committees have access to management and the records of the company, as well as to external professional advisers should the need arise. The board subcommittees are:
The Safety, Health and Sustainable Development Committee oversees this report. The work of the Transformation and the Human Resources Development Committee is also reported in the Social and Labour Plan reports.
The Safety, Health and Sustainable Development Committee is tasked with overseeing the company’s performance regarding safety, health and environmental performance, and its social interaction with the communities in which it operates. It is also responsible for establishing targets in relation to each of these areas. The committee comprises non-executive directors and executive management (including the chief executive officer).
The committee met on four occasions during 2008. Members of this committee are Bill Nairn (chairman), Mark Cutifani, James Motlatsi, Sipho Pityana and Joseph Mensah. Members of management are invited to attend meetings at the committee’s discretion.
The committee operates in accordance with its Charter which specifically addresses the economic, social and environmental performance of the company. On an annual basis the committee undertakes a self-assessment of it performance against its mandate, which is then reported to and reviewed by the board.
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 a manager’s operational and individual performance is reviewed. Safety targets and performance in particular form part of the Remuneration Policy for senior and middle management at operations. See the Remuneration Report in the Annual Financial Statements regarding the linkage between compensation and performance.
The Employment Equity and Development Committee, which changed its name in October 2008 to the Transformation and Human Resource Development Committee, is responsible for overseeing the companys performance in respect of employment equity, transformation and staff development by taking into account the requirements of applicable legislation, relevant international labour conventions and the monitoring of targets set by the company. The committee is also responsible for developing employee skills in a manner that seeks to retain and nurture talent, and to provide employees with the opportunity to enhance their skills and knowledge. The committee met on four occasions during 2008. Its members are: James Motlatsi (chairman), Frank Arisman, Reginald Bannerman, Mark Cutifani, Bill Nairn and Sipho Pityana.
The Executive Committee, chaired by Mark Cutifani, is responsible for overseeing the day-to-day management of the companys affairs and for executing the boards decisions. The committee meets at least monthly and is actively involved in the strategic review of the companys values, safety performance, operation and exploration profiles, and financial status. In 2008, Thero Setiloane was appointed Executive Vice President: Sustainability, to oversee and combine the functions relating to sustainable development, and is a member of this committee.
Significant emphasis is placed on the assessment, mitigation and management of risk, particularly regarding safety, health, environment and community-related risks.
The board is ultimately responsible for risk management and the groups strategy and policies regarding risk are reviewed by the executive directors and senior management. Management has established a group-wide system of internal control to identify, evaluate and manage significant risks within the group.
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. These are then reported to the Executive Committee and the Audit and Corporate Governance Committee.
The group takes due cognisance of the precautionary principle in its risk identification and assessment processes. In line with AngloGold Ashantis adoption of the ICMM Sustainable Development Principles and Framework, risk assessment is undertaken using scienctific data and methodologies. A full discussion of the risk management process and some of the risks that could materially affect AngloGold Ashanti may be found in the Annual Financial Statements section of this report.
The head of AngloGold Ashanti’s legal department is responsible for ensuring that significant legal issues considered as part of the risk management process are brought to the attention of the Audit and Corporate Governance Committee, which is responsible for risk management. A register of litigation matters to which the company has a possible financial exposure is maintained and reviewed on a quarterly basis. The following is a summary of the significant legal issues raised during 2008, with feedback on those reported in previous years. A significant legal issue is defined as one that could result in a potential liability to the company and an issue with a potentially negative consequence for the company’s reputation, as assessed by the company executive. In prior years, significant legal liabilities have been defined as those with an impact 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 has revised the criteria for 2008 and considers reputation risk to be more relevant than a monetary threshold. A monetary threshold has therefore not been set for purposes of this report.
AngloGold Ashanti recognises that a wide range of people employees, their families, communities and others have interests in its business. Similarly, AngloGold Ashanti has an interest in the communities and countries in which it operates.
A wide variety of formal and informal structures are in place to deal with these business and social partners and other stakeholders, and a comprehensive, but not exhaustive list (PDF - **KB) of these is available. Also see the section on stakeholder engagement and the Country and Operational Reports at www.aga-reports.com.
In addition to extensive internal communications systems that are in place at an operational level, employee surveys are undertaken to enable employees to raise issues of concern. See case study on Keeping a finger on the pulse in Brazil. Employees are also encouraged to raise issues with their line management; significant issues may be escalated through management, to the executive and to the board.
The group has an active investor relations programme in place and regularly engages with significant shareholders. All pertinent information resides on the companys website and is updated regularly and timeously. Shareholders may provide feedback to the company in both a formal and informal way. See the Corporate Governance section of the Annual Financial Statements for further information.
In addition to its legal regulatory obligations, AngloGold Ashanti firmly believes in self-regulation and holds the view that local and international industry leaders should establish robust standards against which companies should perform and be measured. The group is actively involved in a wide range of organisations and initiatives, and is either a member of or signatory to the organisations listed below. It actively supports their aims and objectives, and participates in their development and functioning:
Following a strategic review of AngloGold Ashantis organisational memberships during the year, the company stepped down from its seat on the Strategic Management Advisory Group of the Communities and Small-scale Mining (CASM) intiative, and, while remaining involved, is focusing its efforts on the ICMM Artisanal and Small-scale Mining Working Group, which is the industrys liaison point with the CASM.
Membership by operations and regions of voluntary organisations may be found in the Country and Operational Reports at www.aga-reports.com.
My job is highly rewarding. My responsibility is to safeguard the security of AngloGold Ashantis employees, assets, visitors and executive residences.
Continued emphasis needs to be placed on peoples safety at work.
|Organisation||Date of adoption/membership||AngloGold Ashantis participation||Aims||Developments during the year|
|United Nations Global Compact (UNGC)||August 2004 (Ashanti, August 2001).||The principles of the Global Compact are considered by the company and reported in the Report to Society.||The Global Compact provides a framework for businesses to align their operations and strategies with 10 universally accepted principles in the areas of human rights, labour, the environment and anti-corruption.||AngloGold Ashanti is an active participant in the local UNGC committee, administered by the National Business Initiative in South Africa. The committee meets quarterly to network, share ideas and solve challenges related to the implementation of the Global Compact.|
|International Council of Mining Metals (ICMM) (www.icmm.com)||Founding member in 2001.||Active participation in drafting codes of practice.||The ICMM was formed by the worlds leading mining leadership position in sustainable development. ICMM members believe that by acting collectively the mining, minerals and metals industry can best ensure its continued access to land, capital and markets as well as building trust and respect by demonstrating its ability to contribute successfully to sustainable development.||During the year the ICMM launched the finalised Assurance Procedures for corporate members, issued a position statement on indigenous people, and launched a good practice note on biodiversity, mine closure, HIV & AIDS, TB and malaria. Guidlines were also published in the Resource Environment Series and on REACH. The leadership guidance section of Phase 1 of Fatal Accident Presentation was completed in 2008 and published in 2009. Work is in progress on Phase 2.|
|Responsible Jewellery Council (RJC) (www.responsible-jewellery.com)||Founding member in 2006.||Formerly known as the Council for Responsible Jewellery Practices, the RJC was re-named late in 2008. AngloGold Ashanti is represented on the board by Alan Fine.||The councils aim is to promote responsible ethical, social and environmental practices throughout the diamond and gold jewellery supply chain, from mine to retail.||AngloGold Ashanti, thought its representation on the board, continues to participate in the development of standards and related practices.|
|Global Reporting Initiative(GRI) (www.globalreporting.org)||2003||Organisational Stakeholder of GRI.||GRI has pioneered the development of the worlds 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 was compiled in accordance with GRI’s G3 guidelines. .|
|Extractive Industries Transparency Initiative (EITI) (www.eitransparency.org).||2006||Organisational supporter.||The EITI is a coalition of governments, companies, civil society groups, investors and international organisations. It supports improved governance in resource-rich countries by the verification and full publication of company payments and government revenues from oil, gas and mining.||As a matter of principle, AngloGold Ashanti has established a practice of disclosing payments made to governments all in its annual Report to Society, regardless of whether the country is a formal supporter of the EITI. Furthermore, in countries where governments have indicated a desire to be part of the process, AngloGold Ashanti is actively involved in contributing to the success of the initiative. These countries include Ghana, Guinea, Mali and the DRC.|
|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 2005.||A key target of the code is to achieve full participation by all signatories, and an independent audit of this by all operating subsidiaries of participants.||The Cyanide Code was developed by a multi-stakeholder steering committee under the guidance of the United Nations Environmental Programme (UNEP) and the then International Council on Metals and the Environment (ICME). The code is a voluntary industry 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 any 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 codes requirements can be certified. The objective of the code is to improve the management of cyanide in gold mining, to assist in the protection of human health, and to reduce the environmental impacts of cyanide.||Ongoing implementation of the code, with operations certified to be in compliance by year-end.|
|Voluntary Principles on Human rights (www.voluntaryprinciples.org)||May 2007||Signatory||These Voluntary Principles were developed out of a multi-stakeholder process involving 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.||A review of security issues, including the application of the Voluntary Principles was undertaken during the year. See case study: Improving security practice in line with the Voluntary Principles on Security and Human Rights.|
AngloGold Ashanti subscribes to a policy of full, accurate and consistent communication in respect of both its operating and financial affairs. A Disclosure Policy (PDF - 49KB) 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 is applicable to all employees of AngloGold Ashanti and its subsidiaries and members of the Board of Directors.
It deals with:
Adherence to this policy is guided by the companys Disclosure Committee, which meets periodically. The Annual Financial Statements and the Report to Society were both reviewed by the Disclosure Committee.
A review of the companys Disclosure Policy is in process, and the revised policy is expected to be published in 2009.
Given South Africas fairly recent transition to democracy, a policy on party political donations was developed specifically to cater for this region. Where political donations are made in other countries they are subject to similar criteria, including full disclosure. The political donations policy (PDF - 34KB) is available.
AngloGold Ashanti believes that the principle of multi-party democracy, as contained in the founding provisions of South Africas constitution, deserves support. When appropriate, the group has provided financial support to political parties with the aim of promoting political competition and public scrutiny of policy and law-making.
The groups purpose in this is not to advance its immediate, narrow commercial interests; however, the group will continue to vigorously argue the case for good governance, and to encourage a policy-making environment in which there is a healthy and robust competition of ideas. A subcommittee 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. It is anticipated that donations will be considered in the run-up to the general elections in South Africa in 2009.
Political donations were made by operations in Brazil and the United States. The Brazilian operations contributed $476,415 (BRL805,000) towards political parties in the municipalities in which its operations are located. In the United States both the Democratic ($15,150) and Republican ($11,1150) parties received donations in accordance with the Colorado campaign finance laws.
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. (See the Human Rights section of this report).
The groups procurement and supply chain operations ensure the application of AngloGold Ashantis principles at two levels.
Interaction with contractors and suppliers takes place formally on an annual basis, primarily in respect of gifts and hospitality, and also in respect of the companys values and business principles. An internal Group Forensic Unit investigates suspected fraud, malpractice and unacceptable activities. In 2008, 169 cases were investigated of which 16 resulted in disciplinary action and nine were reported to the authorities for criminal investigation. A Supplier Monitoring Committee (SMC) considers and takes action against contractors or suppliers found to have breached our Code of Ethics. In 2008, 24 cases were tabled at the SMC: this resulted in four companies being excluded, six companies being given warnings, with five companies being monitored.
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. Employee induction in respect of these policies and procedures is mandatory. Some of the policies in place are discussed below.
These policies and procedures are available on the company website.
To comply with the obligations of SOx and the King Code, and in the interests of good governance, the company has systems and procedures to introduce, monitor and enforce its ethical codes (including risk related to corruption at all operations). The whistle-blowing policy and process encourages employees and other stakeholders confidentially and anonymously to report acts of an unethical or illegal nature that are prejudicial to the companys interests and compromise its values.
Specifically, AngloGold Ashantis whistle-blowing process provides a channel for the reporting of practices in conflict with the groups business principles, such as unlawful conduct and financial malpractice, or that endanger the public and the environment. The process encourages reports to be made in good faith, in a responsible and ethical manner. Senior management oversees compliance with the Code of Ethics by:
Employees are informed of the company’s policies and procedures at engagement and regularly thereafter. Employees are encouraged to discuss concerns with their direct managers first where this is appropriate and, if not resolved or where management is involved, 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.
There are several means by which reports can be submitted such as the intranet, internet, telephone, fax and post. An initiative is being undertaken to implement text messaging as a medium for reporting.
All reports made in terms of the whistle-blowing policy are administered 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 through a reporting structure to an independent official and internal audit for investigation. Feedback on reports is given when requested. A report is provided to the Audit and Corporate Governance Committee on a quarterly basis. Both the Code of Ethics and the Confidential Reporting Policy are available on the company website.
The whistle-blowing process was reviewed during the year to ensure that it was accessible to all employees, in applicable languages and time zones where possible.
Whistle-blowing issues are categorised on the basis of information made available regarding the alleged offence.
|Bribery and corruption||1||1|
|Conflict of interest||2||2|
|Unfair labour practice||2||2|
In 2008, a total of 50 reports were made (2007: 39): 27 investigations had been completed by year-end and 23 were still in progress. These reports related largely to fraud, perceived irregularities and misconduct. The results of the investigations completed by year-end are shown in the table below. Of the 27 investigations completed, four resulted in criminal investigations, two resulted in disciplinary action (reprimands) and two employees resigned.
|Bribery and corruption||||1||||||||||||||||||||1|
|Unfair labour practice||||||||||||||||||1||||1||2|
AngloGold Ashanti does not conduct extensive marketing programmes, other than ongoing investor relations initiatives. The latter are conducted in line with the regulations of the markets in which the company is listed and the companys own Disclosure Policy. No sanctions or non-adherence to codes or regulations were reported in 2008.
Cerro Vanguardia, Argentina
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ANGLOGOLD ASHANTI Report to Society 2008