Annual
Financial Report
2018
2018
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Our vision of global leadership in sustainable gold mining, and our ability to fulfil our stakeholder promises requires the highest levels of corporate governance. This means maintaining a governance framework that supports the proactive and effective management of those strategic dynamics that will ultimately determine our long-term sustainability, whether operational, economic, social, environmental or otherwise.
This approach is essential given the long-term, capital-intensive nature of our mining projects, as well as the, at times, challenging social and political contexts in which we operate. It requires us not only to ensure that our business remains profitable but also to deliver clear economic, social and environmental benefits to our stakeholders.
Our management approach is underpinned by our commitment to sound and robust corporate governance standards, which are essential to our ultimate operational and strategic success. A key element of the approach is to ensure that the Company complies with all laws and regulations, as well as the highest levels of corporate governance. As such, corporate governance systems and frameworks at Gold Fields are reviewed constantly to align with the ever-changing and increasingly stringent standards that are being rolled out by regulators across the globe.
During the year under review, the Board approved a diversity policy for the Company as required by the JSE Listings Requirements.
In November 2016 the King IV Report on Governance Principles for South Africa (King IV or the Code) was launched, updating the guidelines set by the King III Code. During 2018, the Board continued to ensure compliance and uphold the principles recommended in the King IV Code.
Details of our compliance with King IV can be found on Application of King.
| Internal standards and principles | Listings requirements | Sustainability standards | Business ethics standards |
Gold Fields has developed a comprehensive set of internal standards and principles that underpin how we do business. These include: Our vision and values: Everything that we do to achieve our vision of becoming the global leader in sustainable gold mining is informed by our values. These are applied by our directors, as well as employees at every level of the Group. Board of Directors’ Charter: The charter articulates the objectives and responsibilities of the Board. Likewise, each of the Board committees operates in accordance with written terms of reference that are regularly reviewed to align with the provisions of relevant statutory and regulatory requirements. Sustainable development framework: The Group has developed a range of policy statements that direct business conduct, available online at www.goldfields.com/policies.php. Code of Conduct: Gold Fields’ Code of Conduct commits and binds every employee, officer and director within Gold Fields to conduct business in an ethical and fair manner. The Board’s Audit, and Social, Ethics and Transformation (SET) committees are tasked with ensuring the consistent application of, and adherence to, the Code. The Code is on our website at www.goldfields.com/code-of-conduct. |
Our primary listing is on the Johannesburg Stock Exchange Limited (JSE), and we are therefore subject to the JSE Listings Requirements. Gold Fields has a secondary listing on the New York Stock Exchange (NYSE) and, as a foreign private issuer, is subject to the NYSE Listings Requirements, certain provisions of the US Securities and Exchange Commission, as well as the terms of the Sarbanes-Oxley Act (2002). The Board is committed to upholding the principles and recommended practices of King IV and ensured compliance with the code during 2018. |
Our sustainable development framework is guided by the International Council on Mining and Metals’ (ICMM) 10 principles on sustainable development, their supporting position statements and external assurance thereof. We are not a direct participant in the United Nations (UN) Global Compact, but we are guided by its 10 principles and have incorporated the compact’s management model into our business activities. All of our eligible operations conform to the World Gold Council Conflict-Free Gold Standard. A copy of our Conflict-Free Gold Report, our Statement of Conformance, together with the limited assurance opinion, can be viewed online at www.goldfields.com/sustainability-reporting.php. Our reporting is guided by the internationally recognised Integrated Reporting Framework of the International Integrated Reporting Council and the Global Reporting Initiative (GRI) Standards. Our 2018 GRI submission can be viewed online at www.goldfields.com/sustainability-reporting.php. All our eligible operations are certified by the International Cyanide Management Code, the ISO 14001 (2015) environmental management system and the OHSAS 18001 occupational health and safety management system. As per King IV, 48 non-binding rules, codes and standards have been adopted by the Audit Committee. During 2019, these non-binding rules, codes and standards will be aligned to identified statutes. |
Our Code of Conduct is aligned with national and international business ethics and anti-corruption standards, including the UN Convention against Corruption (2003) and the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1997). We support the principles and processes of the Extractive Industry Transparency Initiative (EITI), through our membership of the ICMM. Ghana and Peru are the EITI-compliant countries in which we operate. We comply with the following legislation and code: The United States’ Sarbanes-Oxley Act (2002), Dodd-Frank Act (2010) and the Foreign Corrupt Practices Act (1977). All relevant regulations and legislations in jurisdictions in which Gold Fields operates. |
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The Board of Directors is the highest governing authority of the Group, and the Board Charter articulates its objectives and responsibilities. Likewise, each of the Board’s subcommittees operates in accordance with its written terms of reference, which are reviewed on an annual basis.
The Board takes ultimate responsibility for the Company’s adherence to sound corporate governance standards, and sees to it that all business decisions and judgements are made with reasonable care, skill and diligence.
In terms of Gold Fields’ Memorandum of Incorporation (MoI), available online at www.goldfields.com/standards-and-principles.php, the number of directors on the Board shall not be less than four and not more than 15. The Board currently comprises 11 directors, two of whom are executive directors and nine are independent non-executive directors (NEDs). The Gold Fields Board has had a majority of independent NEDs for over 16 years. Advised by the Nominating and Governance Committee, the Board ensures that the election of independent directors falls on reputable persons of well-known competence and experience, who are willing to devote a sufficient part of their time to the Company. Each Board member offers a range of relevant knowledge, expertise and technical experience and business acumen, which enables them to exercise independent judgement in Board deliberations and decision-making.
Furthermore, the Nominating and Governance Committee also ensures that the Board has adequate diversity in respect of race, gender, business, geographic and academic backgrounds. The composition of the committees was reviewed and approved at the November 2018 Board meeting.
The role of NEDs, who are independent of management, is to protect shareholders’ interests, including those of minority shareholders. Furthermore, they ensure that individual directors or groups of directors are subject to appropriate scrutiny in their decision-making.
The roles of the Chairperson of the Board and the Group’s Chief Executive Officer (CEO) are kept separate. NEDs Cheryl Carolus was the Chairperson of the Board, with Rick Menell the Deputy Chairperson and lead independent director. Nick Holland was Gold Fields’ CEO for the entire period under review.
The Board is kept informed of all developments relating to the Group, primarily through the executive directors, executive management and the Company Secretary. Furthermore, the Board stays up-to-date through a number of other mechanisms, including employee climate surveys, newsletters and internal staff communication, among others.
NEDs are entitled to seek independent professional advice, at the Group’s expense, on any matters pertaining to Gold Fields. They also have unrestricted access to the Group’s management, as well as to the external auditors, when necessary. A brief curriculum vitae (CV) for each Board member is set out on Directors of this report.
Paul Schmidt was appointed as the Company’s Chief Financial Officer (CFO) from 1 January 2009. In accordance with the JSE Listings Requirements, the Audit Committee considered and agreed unanimously that the level of expertise and experience of Mr Schmidt was satisfactory during 2018.
The Audit Committee was of the opinion that Mr Schmidt, together with other members of his financial management team, had managed the Group’s financial affairs effectively during the 2018 financial year.
Directors are appointed through a formal process, and the Nominating and Governance Committee assists in identifying suitable candidates and evaluating candidates from time to time. The Chairperson and Deputy Chairperson are appointed on an annual basis by the Board after a review of their performance and independence. In line with recommendations by King IV, the Board carries out a thorough evaluation of the independence of directors annually, and specifically where Board members have served on the Board for nine years or more.
The Nominating and Governance Committee develops and facilitates an induction programme with management for new members of the Board to ensure their understanding of Gold Fields and the business environment in which it operates. The Nominating and Governance Committee also assesses the commitments of non-executive candidates to ensure availability to fulfil their responsibilities.
In accordance with Gold Fields’ MoI, one-third of all directors (including executive directors) shall retire from office at each Annual General Meeting. The first to retire are those directors appointed as additional members of the Board during the year, followed by the longest serving members. Retiring directors can be re-elected immediately by the shareholders at the Annual General Meeting.
An additional Board member, Phuti Mahanyele-Dabengwa was appointed to the Board on 1 September 2018. Don Ncube retired at the Annual General Meeting held in May 2018. At the November 2018 Board meeting, the Board approved that Ms Mahanyele-Dabengwa become a member of the Safety, Health and Sustainable Development (SHSD), Social, Ethics and Transformation (SET), and Capital Projects, Control and Review committees. The Board also approved that Yunus Suleman resign from the SHSD and SET committees and become a member of the Nominating and Governance Committee. The composition of the Investment Committee was reviewed and Cheryl Carolus, Rick Menell and Steven Reid became additional members of this Committee.
The Board, assisted by the Nominating and Governance Committee, recommends the eligibility of retiring directors (subject to availability and their contribution to the business) for reappointment.
The Board in 2017 adopted a policy on race and gender diversity at Board level. During 2018 it set a target of appointing an additional South African black female director and a South African black male director. The appointment of Phuti Mahanyele-Dabengwa was completed in 2018 and the search for a black male director is ongoing.
Gold Fields’ Board members and employees are informed of closed and prohibited periods for share dealings by the Company Secretary. Closed and prohibited periods remain in force until final annual, and now bi-annual, results are published. This was done on a quarterly basis during 2018. Similar closed periods will be in place should the Company trade under a cautionary announcement. Any directors’ dealings (including executive directors) require the pre-approval of the Chairperson, and the Company Secretary keeps a register of such dealings.
Non-executive Board members are remunerated for their services as non-executive Board members, the separate committees they sit on annually, ad hoc committees officially approved by the Board, and, where applicable, travel expenses to attend Board meetings. Shareholders approve these fees on an annual basis at the Company’s Annual General Meeting. Further details of NEDs’ and executive directors’ remuneration can be found on Non-executive directors.
The Board Charter and committees’ terms of reference are reviewed on an annual basis. In 2017, the Board reviewed the Board of Directors’ Charter and committees’ terms of reference to align with the recommendations of King IV. A summary of the application of the King IV principles by Gold Fields can be found on Application of King IV.
The Company Secretary provides company secretarial services, oversees Board governance processes in relation to the Board (in accordance with the JSE Listings Requirements) and attends all Board and Board committee meetings. The Board has access to the Company Secretary, who guides the directors on their duties and responsibilities. During the year under review, the Company Secretary oversaw relevant Board governance matters and assisted the Board and its committees with annual plans, agendas, minutes and terms of reference.
The Company Secretary for the year under review was Lucy Mokoka, and the Board is satisfied that Ms Mokoka is competent, qualified and has the necessary expertise and experience to fulfil the role. The Company Secretary is not a director of the Group and has an arm’s-length relationship with the Board.
The introduction of King IV allowed the Board to assess the effectiveness of its current processes, practices and structures, which it uses to direct and manage the operations of the Company. The King IV gap analysis process conducted in 2017 revealed that the Company was materially compliant with the Code. The Board continued to review and refine governance processes to enhance compliance with the Code in 2018.
As such, a full register of the King IV principles, and the extent of the Company’s compliance therewith, Application of King IV, is available on our website at www.goldfields.com/standards-and-principles.php.
The Board is required to meet at least four times a year. It convened nine times during 2018 as five special/ad hoc Board meetings were held to deliberate on urgent substantive matters. In terms of the Board Charter, a meeting may also be conducted by electronic communication.
All directors are provided with the necessary information through comprehensive Board packs prepared by management in advance of each Board or committee meeting to enable them to discharge their responsibilities effectively. The Board agenda and meeting structure focus on strategy, sustainable development, finance, performance monitoring, governance and other related matters. During the period under review, the Board meetings and some committee meetings were preceded by closed session meetings of NEDs. Furthermore, directors are asked to recuse themselves from meetings on any matters in which they may be conflicted.
| Directors | Board meetings | Special Board meetings | Ad-hoc Investment Committee | Audit Committee | SHSD Committee | Capital
Projects,
Control and
Review Committee |
Remune- ration Committee | SET Committee | Nominating and Governance Committee | Risk Committee | |
| No of meetings per year | 4 | 5 | 4 | 7 | 5 | 4 | 4 | 4 | 4 | 2 | |
| CA Carolus1 | 4 | 5 | 2 | – | 4 | 4 | 4 | 4 | 4 | – | |
| A Andani1 | 4 | 5 | 3 | 7 | – | – | 4 | 4 | – | – | |
| PJ Bacchus1 | 4 | 4 | 4 | 7 | – | 4 | 4 | 3 | – | 2 | |
| TP Goodlace1 | 4 | 4 | – | – | 5 | 4 | – | . | – | 2 | |
| C Letton | 4 | 5 | – | – | 4 | 4 | – | 4 | – | 2 | |
| NJ Holland | 4 | 5 | 4 | 7 | 5 | 4 | 4 | 4 | 4 | 2 | |
| RP Menell1 | 4 | 4 | 2 | 7 | 4 | 4 | 4 | 4 | 4 | – | |
| DMJ Ncube1 | 2 | 2 | – | 3 | 2 | – | 4 | 4 | 4 | – | |
| SP Reid1 | 4 | 5 | 2 | – | 5 | 4 | 4 | 2 | 4 | – | |
| PA Schmidt | 4 | 5 | 4 | 7 | – | 2 | – | – | – | 2 | |
| YGH Suleman1 | 4 | 5 | 3 | 7 | 5 | 4 | – | 4 | – | 2 | |
| P Mahanyele- Dabengwa2 | 1 | 1 | – | 1 | 1 | 1 | – | 1 | – | – |
| 1 | CA Carolus attended the Capital Projects, Control and Review Committee meetings by invitation PJ Bacchus attended the SET Committee meetings by invitation RP Menell and PJ Bacchus recused themselves from the March 2018 Special Board Meeting due to a conflict of interest TP Goodlace submitted an apology for the October Special Board Meeting A Andani and YGH Suleman submitted apologies for the May 2018 and November 2018 Investment Committee meetings respectively C Carolus, R Menell and S Reid became members of the Investment Committee with effect from the 27 November 2018 Board meeting. They attended the 1 November Investment Committee meeting by invitation DMJ Ncube attended the SHSD Committee meetings by invitation. He retired from the Board with effect from the Annual General Meeting in May 2018 |
| 2 | P Mahanyele-Dabengwa was appointed to the Board with effect from 1 September 2018. |
The full Directors’ Report is detailed on Profile.
The Board has established a number of standing committees in compliance with the Companies Act and JSE Listings Requirements with delegated authority from the Board. Committee members are all independent NEDs, and the CEO, CFO and various members of management are permanent invitees to committee meetings. (The CEO is a permanent member of the SET Committee). Each Board committee is chaired by an independent NED.
Committees are required to evaluate their effectiveness and performance on an annual basis and to report findings to the Board for consideration. In line with the King IV recommendations, the Board annually reviews the terms of reference of all committees and, if necessary, adopts changes which are approved by the Board.
Committees operate in accordance with written terms of reference and have a set list of responsibilities. These are outlined at www.goldfields.com/our-leadership.php. The charters and terms of reference of the Board can be found at www.goldfields.com/standards-and-principles.php.
The Investment Committee is an ad hoc committee of the Board, established in 2017 to make recommendations to the Board on strategic restructuring options for the Group, as and when required.
The Board and all its committees reviewed their charters and terms of references to align with King IV. The written terms of reference and responsibilities of the Board and its committees are set out below. The composition of the committees refers to the position as at 25 March 2019:
The Board is responsible for strategy development and monitors performance against the strategy. The Board Charter compels directors to promote the vision of the Company while upholding sound principles of corporate governance. Other directors’ responsibilities under the charter include:
Key areas of focus during 2018
The Board assessed its performance and effectiveness during the period under review and was found to be functioning and discharging its duties satisfactorily.
It is the responsibility of this Committee, which has four independent directors, among other things, to:
Key areas of focus during 2018
The Committee assessed its performance and effectiveness during the period under review and was found to be functioning and discharging its duties satisfactorily.
The Audit Committee, which consists of four independent directors, has formal terms of reference which are reviewed annually and set out in its Board-approved charter. The Board is satisfied that the Committee has complied with these terms and with its legal and regulatory responsibilities as set out in the Companies Act, King IV and the JSE Listings Requirements.
The full duties and responsibilities of the Audit Committee, as well as the Audit Committee Statement, appear on Audit Committee Report of this report, respectively. It is the responsibility of this Committee, among other things, to:
Key areas of focus during 2018
Disclosures
The Committee assessed its performance and effectiveness during the period under review and was found to be functioning and discharging its duties satisfactorily.
It is the responsibility of this Committee, which consists of five independent directors, among other things, to:
Key areas of focus during 2018
The Company’s remuneration policies, as well as details of directors’ fees and equity-settled instruments, are in the Remuneration Report .
The Committee assessed its performance and effectiveness during the period under review and was found to be functioning and discharging its duties satisfactorily.
All members of the Committee have been selected on the basis of their considerable experience in the field of sustainable development. The Committee consists of six independent directors (one additional director attended by invitation during 2018). It is the responsibility of this Committee, among other things, to:
Key areas of focus during 2018
The Committee assessed its performance and effectiveness during the period under review and was found to be functioning and discharging its duties satisfactorily.
It is the responsibility of this Committee, which consists of seven independent directors (one of the seven independent directors attends by invitation), among other things, to:
Key areas of focus during 2018
The Committee assessed its performance and effectiveness during the period under review and was found to be functioning and discharging its duties satisfactorily. The Committee continues to review the results attained on completion of each project against the authorised work undertaken.
It is the responsibility of this Committee, which consists of six independent directors (one additional director attended by invitation during 2018) and one executive director (in line with King IV recommendations), among other things, to assist the Board in ensuring that it discharges its oversight responsibilities with regard to safety, security, health, environmental, social, ethics and sustainable development matters, as well as stakeholder relationships, to ensure the Company upholds the principles of good corporate citizenship and conducts its business in an ethical and sustainable manner.
This Committee also ensures, among other things, that the Group:
Key areas of focus during 2018
The Committee assessed its performance and effectiveness during the period under review and was found to be functioning and discharging its duties satisfactorily.
It is the responsibility of this Committee, which consists of four independent directors, to assist the Board and the Boards of all subsidiary companies in ensuring that management identifies and implements appropriate risk management controls.
The Committee acts in terms of delegated authority in respect of the duties and responsibilities assigned to it by the Board to, among other things:
Key areas of focus during 2018
The Committee assessed its performance and effectiveness during the period under review and was found to be functioning and discharging its duties satisfactorily.
The objective of the Committee is to consider and, where appropriate, make recommendations to the Board on strategic, organisational and structuring options including investment and divestment opportunities to achieve the Company’s strategic objective of maximising shareholder returns sustainably.
It is the responsibility of this Committee to:
The Exco is not a subcommittee of the Board. It is primarily responsible for the implementation of Company strategy, as well as carrying out the Board’s mandates and directives. Exco meets on a regular basis to review Company performance against set objectives, and develops Company strategy and policy proposals for consideration by the Board. Exco also assists the Board in the execution of the Company’s disclosure obligations. A series of guidelines on disclosure have been disseminated throughout the Company. Exco consists of the principal officers and executive directors of Gold Fields – 12 members in total.
Each of Gold Fields’ regional operating subsidiaries has established Board and Exco structures to ensure sound corporate governance practices and standards. At least one of the Company’s executive directors serves on the boards of the operating subsidiaries.
Executive directors |
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Nicholas Holland (60) CEO BCom, BAcc, University of the Witwatersrand; CA(SA) Appointed to the Board: Executive Director, 1998; CEO, 2008 Experience and expertise: Finance, mining, management Prior to his appointment as CEO of Gold Fields, Mr Holland was the Company’s CFO. He has more than 39 years’ experience in financial management, of which 29 years were in the mining industry. Before joining Gold Fields, he was Financial Director and Senior Manager of Corporate Finance at Gencor. |
Paul Schmidt (51) CFO BCom, University of the Witwatersrand; BCompt (Hons), University of South Africa; CA(SA) Appointed to the Board: 2009 Experience and expertise: Finance, mining, management Prior to his appointment as CFO of Gold Fields, Mr Schmidt held the positions of acting CFO from May 2008 and Financial Controller from April 2003. He has more than 23 years’ experience in the mining industry. |
The introduction of King IV allowed the Board to assess the effectiveness of its current processes, practices and structures which it uses to direct and manage the operations of the Company. In February 2017, the Board initiated a gap analysis process headed by the Chairperson of the Audit Committee, Yunus Suleman, to determine the Company’s readiness in implementing the recommended practices contained in King IV. Areas of improvement were identified, particularly relating to the new disclosure requirements that have been introduced by King IV. The Board concurred that principles that are capable of being implemented immediately should be implemented and the remainder to be implemented as work in progress. The outcome of the gap analysis, which revealed that the Company was materially compliant, was considered and discussed by the Board in November 2017.
| Principles | Principle application | |||
PART 5.1: LEADERSHIP, ETHICS AND CORPORATE CITIZENSHIP |
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LEADERSHIP |
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| Principle 1: The governing body should lead ethically and effectively. | The Board (governing body) through its various committees is confident on a prospective basis that the combined inputs of its committees produce conformity with this principle. The Board exhibits the requisite levels of integrity, competence, responsibility, accountability, fairness and transparency. | |||
ORGANISATIONAL ETHICS |
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| Principle 2: The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture. | The SET Committee comprises non-executive members and one executive member. The majority of the members are independent. The Committee ensures conformity with this principle through the Code of Ethics and the Group Disciplinary Code that set out sanctions to be followed. | |||
RESPONSIBLE CORPORATE CITIZENSHIP |
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| Principle 3: The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen. | The Board through the SET Committee and the SHSD Committee ensures conformity with this principle. The SHSD Committee is committed to the 10 principles of the ICMM and the Global Compact’s 10 sustainable development principles. | |||
PART 5.2: STRATEGY PERFORMANCE AND REPORTING |
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STRATEGY AND PERFORMANCE |
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| Principle 4: The governing body should appreciate that the organisation’s core purposes, its risks and opportunities, strategy and business model, performance and sustainable development are all inseparable elements of the value creation process. | The Board conforms to this principle. The Board oversees strategy formulation and execution. The Board sets performance targets which are agreed upon with management. On a yearly basis, the Board together with management reviews the strategy. | |||
REPORTING |
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| Principle 5: The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation’s performance, and short-, medium- and long-term prospects. | The Board keeps its shareholders updated in line with the JSE requirements and ensures integrity of external reports insofar as dealing with assurance of external reports. | |||
PART 5.3: GOVERNING STRUCTURES AND DELEGATION |
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PRIMARY ROLE AND RESPONSIBILITIES OF THE GOVERNING BODY |
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| Principle 6: The governing body should serve as the focal point and custodian of corporate governance in the organisation. | The Board adheres to the requirements of King IV. The Board receives external advice as and when required or necessary and keeps abreast of best corporate governance practices both locally and abroad, making recommendations where appropriate, for Board participation in continuing education programmes. | |||
COMPOSITION OF THE GOVERNING BODY |
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| Principle 7: The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively. | The Board has delegated to the Nominating and Governance Committee the nomination, election and the appointment processes having set the criteria for the selection of candidates to serve on the Board. The JSE Listings Requirements require that race diversity disclosure be made effective 1 June 2018. In November 2017 the Board approved a Company-wide diversity policy. | |||
COMMITTEES OF THE GOVERNING BODY |
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| Principle 8: The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties. | he Board conforms to this principle. Through the Nominating and Governance Committee, the Board ensures that the structures of the Board are well resourced with a balance of skills and expertise. The subcommittees of the Board include the following: Audit Committee; Risk Committee; Nominating and Governance Committee; SET Committee; Remuneration Committee; SHSD Committee; and Capital Projects, Control and Review Committee. In November 2017, the Board established a new ad hoc committee, known as an Investment Committee. | |||
EVALUATIONS OF THE PERFORMANCE OF THE GOVERNING BODY |
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| Principle 9: The governing body should ensure that the evaluation of its own performance and that of its committees, its Chairperson and its individual members support continued improvement in its performance and effectiveness. | The Board conforms to this principle. The Board regularly monitors and appraises its own performance, those of its subcommittees and individual NEDs. The Board further evaluates the independence of its independent NEDs, which evaluation is rigorously tested in respect of the independent NEDs who have served on the Board for an aggregate term exceeding nine years. The Board has scheduled in its yearly work plan an opportunity for consideration, reflection and discussion of its performance and that of its committees, its Chairperson and its members as a whole. |
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APPOINTMENT AND DELEGATION TO MANAGEMENT |
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| Principle 10: The governing body should ensure that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities. | The Board conforms to this principle. Board authority is conferred on management through the CEO. | |||
PART 5.4: GOVERNANCE FUNCTIONAL AREAS |
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| Principle 11: The governing body should govern risk in a way that supports the organisation in setting and achieving its strategic objectives. | The Board conforms to this principle. The Board has delegated this authority to the Risk Committee. The Risk Committee has oversight of the integrity and effectiveness of the risk management processes. A comprehensive strategic and operational risk management process is in place throughout the Group. | |||
TECHNOLOGY AND INFORMATION GOVERNANCE |
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| Principle 12: The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives. | The Board conforms to this principle. The Board has delegated this authority to the Audit Committee. The Audit and Risk committees ensure that the information and technology (I&T) framework is in place and that the I&T Charter and policies are established and implemented. A detailed information, communication and technology risk assessment is performed on a yearly basis across the Group with key strategic risk themes highlighted in the risk enterprise register. | |||
COMPLIANCE GOVERNANCE |
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| Principle 13: The governing body should govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that supports the organisation being ethical and a good corporate citizen. | The Board conforms to this principle. The Board has delegated this authority to the Audit Committee. The Board approves policies that articulate and give effect to its direction on compliance and ensures that adopted, non-binding rules, codes and standards are aligned to applicable laws and regulations. The following policies are applicable: Group Code of Conduct, Group Policy Register, Anti-Bribery and Corruption Governance Framework, Group Governance and Compliance Framework, Group Compliance Management Guideline, and Group Governance and Compliance Portal. | |||
REMUNERATION GOVERNANCE |
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| Principle 14: The governing body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term. | The Board conforms to this principle. The Board has delegated this authority to the Remuneration Committee. The Remuneration Committee assists the Board in overseeing all aspects of remuneration practices for the Group to ensure employees are remunerated fairly, responsibly and transparently. Fair and competitive reward processes are embedded in the organisation. These processes encourage and result in the achievement of the Group’s strategic objectives and positive outcomes in the short, medium and long term. | |||
| Principle 15: The governing body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation’s external reports. | The Board conforms to this principle. The combined assurance guideline for the Group provides an analysis of all the assurance activities within the Group. The Board, executive management and senior management identify additional areas that may require assurance on an ongoing basis. | |||
STAKEHOLDERS |
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| Principle 16: In the execution of its governance roles and responsibilities, the governing body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time. | The Board conforms to this principle. A Stakeholder Relationship and Engagement Policy Statement has been aligned with King IV and approved by the Board. The policy was revised to be inclusive of business-wide stakeholders that are material and not just those relevant to sustainable development, particularly employees and shareholders. The governance framework addresses relationships within the Group’s companies and shareholder relationships. Summaries of engagement undertaken with all material stakeholders can be found online at www.goldfields.com/societal-stakeholders.php. |
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Application of Section 3.84 of the JSE Listings Requirements on Board governance processes
| Requirement | Principle | The Gold Fields approach and compliance | |||||
| 3.84(a) | There must be a policy evidencing a clear balance of power and authority at Board of Directors’ level to ensure that no one director has unfettered powers of decision-making. |
The Board Charter shows that there is clear balance of power and authority at Board level and that no one director has unfettered powers. |
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| 3.84(b) | Issuers must have an appointed CEO and a Chairperson, and the same person must not hold these positions. The Chairperson must either be an independent director, or the issuer must appoint a lead director in accordance with King IV. |
Gold Fields’ CEO and Chairperson positions are held by different people, and the Chairperson is an independent NED. |
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| 3.84(c) | All issuers must, in compliance with King IV, appoint an Audit Committee. |
The Board appointed an Audit Committee that is chaired by an independent NED. Audit Committee members are all independent NEDs. |
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Issuers must appoint a Remuneration Committee; and issuers must appoint a Social and Ethics Committee. |
Gold Fields’ Remuneration Committee comprises independent NEDs and is chaired by an independent Chairperson. Gold Fields’ SET Committee has been aligned with King IV and comprises majority independent NEDs and one executive director. |
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The composition of such committees, a brief description of their mandate, the number of meetings held and any other relevant information must be disclosed in the annual report. |
Each committee provides a brief description in the Annual Report of its mandate, number of meetings held in a year and any other relevant information. |
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| 3.84(d) | Brief curricula vitae (CV) of each director standing for election or re-election must accompany the relevant notice of the meeting. |
Brief CVs of our directors are listed in Directors of this report. |
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| 3.84(e) | The capacity of each director must be categorised as executive, non-executive or independent. |
The CVs mentioned above (3.84(d)) contain information on whether a director is an independent non-executive director or an executive director. The composition of committees is in accordance with the requirements of the Companies Act and King IV. |
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| 3. 84(f) | Issuers must have a full-time executive financial director. |
Gold Fields has a full-time financial director. |
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| 3.84(g) | The Audit Committee must, on an annual basis, consider and satisfy itself of the appropriateness of the expertise and experience of the Financial Director and report same in the annual report. The Audit Committee must ensure that the issuer has established appropriate financial reporting procedures and that those procedures are operating. |
The Audit Committee considers and satisfies itself of the appropriateness of the expertise and experience of Gold Fields’ Financial Director on an annual basis and reports the findings to the Board. The Audit Committee has established appropriate financial reporting procedures and these are reviewed from time to time to ensure that they are operating effectively. |
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| 3.84(h) | The Board of Directors appoints the Company Secretary in accordance with the Companies Act and applies the recommended practices in King IV. The Board must consider and satisfy itself, on an annual basis, on the competence, qualifications and experience of the Company Secretary. |
The Company Secretary is appointed in accordance with the Companies Act. The Board considered the Company Secretary’s competence, qualifications and experience at the meeting held in November 2018, and is satisfied that she is competent and has appropriate qualifications and experience to serve as the Company Secretary. |
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| 3.84(i) | The Board of Directors or the Nominating Committee must have a policy on the promotion of gender diversity at Board level. The issuer must confirm this by reporting to shareholders in its annual report on how the Board of Directors or the Nominating Committee have considered and applied the policy of gender diversity in the nomination and appointment of directors. |
The Board approved a Company-wide diversity policy in November 2017. |
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| 3.84(j) | The Board of Directors or the Nominating Committee, must have a policy on the promotion of race diversity at Board level. If applicable, the Board of Directors or the Nominating Committee must further report progress in respect thereof on agreed voluntary targets. |
The Board approved a Company-wide diversity policy in November 2017. |
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| 3.84(k) | The remuneration policy and the implementation report must be tabled every year for separate non-binding advisory votes by shareholders of the issuer at the Annual General Meeting. The remuneration policy must record the measures that the Board of Directors of the issuers commits to take in the event that either the remuneration policy or the implementation report, or both are voted against by 25% or more of the votes exercised. In the event that either the remuneration policy or the implementation report, or both are voted against by shareholders exercising 25% or more of the voting rights exercised, the issuer must in its voting results announcement provide for the following:
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The Board approved the Group Remuneration Policy to be presented to the Annual General Meeting for a non-binding advisory vote. |