Getting things right

By Elizna Viljoen – Company Secretary at Anglo American Platinum

Anglo American Platinum is the world’s leading primary producer of platinum group metals – in 2014, we extracted some 37 per cent of all newly mined platinum across the globe. Our headquarters are in Johannesburg, South Africa, and the company is listed on the Johannesburg Stock Exchange (JSE). Anglo American plc is our largest shareholder, with an approximate 80 per cent holding in the company.

We at Anglo American Platinum pride ourselves on the logic and rigour of our governance processes, from the development of strategy, policies and procedures, through to their implementation across our operations. But it is the commitment of our board, our management team and all our employees – at head office and the operations – that has made it possible for us to receive this prestigious 2016 Best Corporate Governance in Mining in Africa Award. We are delighted to receive this award and regard the findings of the independent assessors of Ethical Boardroom as confirmation and encouragement that we are getting things right.

Of course, winning this award does not mean that we will rest on our laurels. We will continue to review and enhance our governance policies, processes and practices in line with governance guidelines and best practice.

Our board is the focal point for, and the custodian of, our governance framework. The board forms part of the process of continual development, review and improvement of our governance policies, practices and procedures in line with an integrated governance, risk and compliance framework. It is hugely advantageous to us that our directors fully appreciate that good corporate governance is essential in protecting the interests of all stakeholders.

While the board is accountable and responsible for the performance and affairs of the company, the scale of our business necessitates that the board delegates certain functions to board sub-committees with suitably skilled non-executive directors as members which, in turn, allows the board to effectively fulfil its duties. These board sub committees act within agreed, written terms of reference, which are reviewed and updated annually. The provision of shared services provided by the Anglo American plc helps to ensure that the management and execution of key activities and controls to mitigate risk and achieve business objectives takes place.

Identifying risk

Our approach to risk is also important. The company’s risk appetite is determined by the executive committee and is verified by the audit and risk committee and the board. This, in turn, determines the areas of strategic and business focus, which then determine the level of assurance considered appropriate in respect of identified business risks and exposures.

To plan and coordinate assurance within the group, we implemented a combined assurance framework. Each assurance activity in this framework links to the company’s value drivers and is determined based on risks identified through the integrated risk management process, business processes, controls and mitigating strategies.

Our board conducts its business in accordance with the principles of the King Code of Governance (King III), which include the exercise of discipline, independence, responsibility, fairness, social responsibility and transparency and also the accountability of directors to all stakeholders. The board has a formal board charter, setting out its roles and responsibilities. The independence of the chairman and the separation of the chairman’s responsibilities from those of the chief executive, as set out in the board charter, ensure a balance of authority and also preclude any one director from exercising unfettered powers of decision-making. The chairman is responsible for leading the board and for the board’s effectiveness. The chief executive is responsible for the execution of strategy and the day-to-day business of the company.

Several features ensure our board remains effective. One is the independence of our directors. The nomination committee annually reviews the independence of directors to satisfy itself that directors meet the criteria for independence in terms of King III. Another is that we follow a formal and transparent process when appointing new directors. Any new appointment is considered by the entire board, on the recommendation of the nomination committee. The nomination committee, comprising solely of non-executive directors, evaluates the skills, knowledge and experience of proposed new directors to ensure they are up to the task of implementing group strategy.

Furthermore, we put our directors through a thorough induction process. They also receive training as our directors are expected to stay abreast of changing trends in the industry and in the group’s environment and markets. To assist directors, the company secretary arranges topical presentations prior to every board meeting and site visits to operations are arranged at least twice a year in order for the directors to familiarise themselves with the operational and environmental aspects of the business. In addition, we rotate our directors. In accordance with our memorandum of incorporation, a third of directors retires by rotation each year but is eligible for re-election by shareholders at the AGM.

Evaluating the board

Finally, we evaluate the effectiveness of our board annually. The process involves self-evaluations of the board and the effectiveness of board sub-committees and that of the chairmen. The evaluation focusses on: board composition, expertise and dynamics, time management, board support, strategic oversight, risk management and internal control, succession planning, human resource management and priorities for change.

In short, at Anglo American Platinum we strive to be the partner of choice for, inter alia, investors, governments and communities. Key to securing this status is trust – a firm belief held by our stakeholders that the behaviour of the business will meet or exceed their expectations.

We are committed to our governance journey and we truly appreciate the recognition this award gives us that our governance approach resonates with our stakeholders – the people who are instrumental in sustaining our business.

About The Author:

Elizna Viljoen is responsible for the running of the company secretarial teams at Anglo American Platinum and Anglo American South Africa, servicing the boards and board committees of these companies and ensuring appropriate compliance with JSE listing rules, the provisions of the Companies Act and governance best practice.