Ethics and governance

Giving effect to our values


Professor Mervyn King

Professor Mervyn King

Chairman, Global Reporting Initiative (GRI)

“Amidst evidence that the current economic model is socially and environmentally unsustainable, it is time for new and more effective forms of accountability. The users of an organisation’s reporting should be able to determine whether the organisation’s governing structure has sufficiently applied its collective mind in identifying the social, environmental, economic and financial issues that impact on the business, and whether these issues have been incorporated into its strategy.”

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Acting in compliance with our values and standards is integral to the way we operate. This section sets out how our values are put into practice through the company’s various governance structures, as well as through our Code of Ethics, which is the anchor for the application of our values in the company.

Governance structures

AngloGold Ashanti has a 10-member board that includes eight non-executive directors, all of whom are independent as defined by relevant corporate governance codes. The board’s Nominations Committee assesses the competencies and experience of potential new members , assisted as required by independent and external consultants. On 17 February 2011, one of the non-executive directors, Dr Motlatsi retired from the board.

Conflicts of interest

A key governance risk is the potential for conflict of interest. Board members declare all outside interests at the start of their tenure, including where no conflict arises. On appointment, board members are made aware that the board has to sanction any outside appointments that might occur during their tenure and a quarterly statement relating to conflict of interest is requested from each board member to ensure that any changes are notified. Directors recuse themselves from any discussion where they may have an actual, perceived or potential conflict as adjudged by the board.

Conflict of interest policies for employees are set out in the company’s Code of Ethics, as revised in 2010, and these require a similar declaration of interests at the outset of employment, with provision for annual updates and notification when circumstances change or if conflicts arise.

Board mandate

The mandate of the board is to set strategy and provide organisational oversight. Various board committees, each of which is chaired by an independent non-executive director, deal with aspects of the board’s functions, including social, economic and environmental performance. These committees have clear mandates and report quarterly to the board. They receive detailed management reports quarterly and, if required, can call on services of external professionals to advise them.

Oversight of sustainability performance

The Safety, Health and Sustainable Development, Audit and Corporate Governance and Transformation and Human Resources Development Committees of the board are the bodies which most regularly review sustainability performance. The chairman of the Audit and Corporate Governance Committee has been appointed to the Safety, Health and Sustainable Development Committee to ensure consistency of oversight and reporting between these two committees.

For the 2010 financial year, the board evaluation process has been conducted by self-assessment. From 2011, however, the effectiveness of the board will be assessed in conjunction with an external party, which will undertake board evaluations on the basis of criteria developed jointly by the external party and AngloGold Ashanti.

Criteria for evaluating the performance of the board include the ability to successfully assess, monitor and mitigate risk, including risks relating to sustainability issues.

Remuneration for non-executive directors is by flat fee, approved by shareholders. There is no long-term compensation (for example share scheme participation or performance incentives).

Remuneration for executive management includes basic salary, short- and long-term incentives based on performance, pensions and other benefits. The short-term incentive plan is referenced to the achievement of a set of individual and company performance targets relating to earnings per share, gold production, cost control, Mineral Resource to Ore Reserve conversion and safety.

The objective of the long-term incentive plan is to align the interests of executive management with those of the company and the shareholders over the medium to long term. The targets used for vesting are determined annually by the board’s Remuneration Committee and link directly to the company’s strategy. Measures include earnings per share, total shareholder return against a comparator group of gold mining companies, Mineral Resource to Ore Reserve generation and safety.

Our Code
"Ensuring performance with integrity"

The company’s code of ethics has been translated into our main operating languages. The logo is intended to suggest that accountability begins and ends with each individual, and that ethical conduct depends on personal choices.

Code of Ethics

During 2010, we developed a revised Code of Ethics, based on our vision, mission and values. External and internal engagement was undertaken as part of the development process and the draft code was benchmarked, both internally and externally.

We view our Code of Ethics as central to the concept of building personal accountability in our business. It has been branded ‘Our Code’ to make the point that it embraces each and every employee. Communications concerning Our Code have reinforced the principle that those with whom the company interacts will judge the company according to the ethical behaviour of each individual.

Our Code is designed to offer general guidelines on how to approach situations, rather than to provide an all-encompassing set of rules on individual behaviour. It covers aspects of the business where ethical considerations are most likely to be raised, including safety, people, environment and community, fraud and corruption, conflict of interest, insider trading and disclosure.

Non-compliance with Our Code is a key business risk and mechanisms to ensure compliance and bring to light potential infringements therefore receive significant attention. A ‘whistleblowing’ hotline is already well established. The hotline is independently operated and has its own website and web address, and a telephone service through which tip-offs can be processed. It is available in the company’s major operating languages on a 24/7 basis.

As Our Code is extended through the company over the next 18 months, a communications and training programme will seek to integrate its principles into business. A company-wide training programme will be undertaken and each employee has been asked to acknowledge receipt of Our Code to reinforce personal accountability. A summary version of Our Code has been produced, translation into the company’s main operating languages is underway and compliance champions in each operating region are being identified.

The board will receive quarterly reports on the application of Our Code and, in 2011, external assurance will be introduced to assess the process of rolling out Our Code, including training offered and responses to confidential tip-offs raised through the whistle-blowing process.

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