Integrated Annual Review 2012 Annual Financial Report 2012 Mineral Resources and Mineral Reserves Regional overview  
 

4.1.5 Board committees

The Board has established a number of standing committees with delegated authority from the Board. The committee members are all independent non-executive directors and the CEO is a permanent invitee to each committee meeting. Each Board committee is chaired by an independent non-executive director.

Committees operate in accordance with written terms of reference. In addition, the committees are required to evaluate their effectiveness and performance on an annual basis and to report the respective findings to the Board for consideration.

Nominating and Governance Committee

During 2012, the Nominating and Governance Committee reaffirmed its terms of reference. It is the responsibility of this committee, which has four independent directors, amongst other things, to:

  • Develop the Company’s approach towards corporate governance, including recommendations to the Board
  • Identify successors to the posts of Chair and CEO, and make appropriate recommendations to the Board
  • Consider the mandates of the Board committees, the selection and rotation of committee members and Chairs, and the performance of each committee on an ongoing basis
  • Evaluate the effectiveness of the Board, its committees and management, and report the findings of this evaluation to the Board itself

The committee assessed its performance and effectiveness during the period under review and was found to be functioning satisfactorily and discharging its duties. Following feedback from members, additional focus on succession planning for the Chair of the Board was undertaken.

Audit Committee

The Audit Committee has updated, formal terms of reference which are set out in the committee’s 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 No 71 of 2008, as amended, the King Report on Governance Principles for South Africa 2009 (King III) and the JSE Listings Requirements.

The committee consisted of five independent non-executive directors throughout the financial year and membership and attendance at meetings is set out on p62. The Board believes that the members collectively possess the knowledge and experience to exercise oversight of Gold Fields financial management, internal and external auditors, the quality of Gold Fields financial controls, the preparation and evaluation of Gold Fields financial statements and Gold Fields financial reporting.

The Board has established and maintains internal controls and procedures, which are reviewed on a regular basis. These are designed to manage the risk of business failures and to provide reasonable assurance against such failures but this is not a guarantee that such risks are eliminated.

It is the duty of this committee, among other things, to monitor and review:

  • The effectiveness of the internal audit function
  • Audit findings, audit reports and the appointment of external auditors
  • Reports of both internal and external auditors
  • Evaluation of the performance of the Chief Financial Officer
  • The adequacy and effectiveness of the Company’s enterprise-wide risk management policies, processes and mitigating strategies
  • The governance of information technology (IT) and the effectiveness of the Company’s information systems
  • Quarterly and annual financial and operational reports, the annual financial statements and all other widely distributed documents
  • The Form 20-F filing with the US Securities Exchange Commission (SEC)
  • Accounting policies of the Group and proposed revisions
  • Compliance with applicable legislation, requirements of appropriate regulatory authorities and the Company’s Code of Ethics
  • The integrity of the integrated annual report (by ensuring that its content is reliable and recommending it to the Board for approval)
  • Policies and procedures for preventing and detecting fraud

Internal and external auditors have unrestricted access to the Audit Committee, the Audit Committee Chair and the Chair of the Board, ensuring that auditors are able to maintain their independence. Both the internal and external auditors report at Audit Committee meetings. The committee also meets with both internal and external auditors separately without other invitees being present.

The committee is responsible for recommending the appointment of a firm of external auditors to the Board who in turn will recommend the appointment to the shareholders. The committee is also responsible for determining that the designated appointee has the necessary experience, qualifications and skills and that the audit fee is adequate.

The committee reviewed and assessed the independence of the external auditor, including their confirmation in writing that the criteria for independence as set out in the rules of the Independent Regulatory Board for Auditors and international bodies have been followed. The committee is satisfied that KPMG is independent of the Group. An audit fee for the period of R27.9 million (US$3.4 million) was approved, as well as R0.1 million (US$0.02 million) for tax advisory compliance services and R13.9 million (US$1.7 million) in assurance services on bonds, sustainability reporting, the unbundling of Sibanye Gold and other agreed upon services. The committee determines the nature and extent of non-audit services that the firm can provide and pre-approves all permitted non-audit assignments by the Company’s independent auditor.

The committee approved the annual audit plan presented by the external auditors and monitors progress against the plan. The audit plan forms the basis of providing the committee with the necessary assurances on risk management, the internal control environments and IT governance. The committee recommends that KPMG is reappointed for the 2013 financial year with Mr Coenie Basson as the Group audit engagement partner.

The internal control systems of the Group are monitored by internal auditors who report their findings and recommendations to the Audit Committee and to senior management. The committee determines the purpose, authority and responsibility of the internal audit function in an Internal Audit Charter. The Internal Audit function is headed by the Vice-President, Internal Audit, who can be appointed or dismissed by the Audit Committee. The committee is satisfied that the Vice-President has the requisite skills and experience and that he is supported by sufficient staff with appropriate skills and training.

Gold Fields Internal Audit (GFIA) operates in accordance with the International Standards for the Professional Practice of Internal Auditing as prescribed by the Institute of Internal Auditors (IIA). The internal audit activities carried out during the year were identified through a combination of the Gold Fields Risk Management framework and the risk-based methodologies adopted by GFIA. The committee approves the annual Internal Audit assurance plan presented by GFIA and monitors progress against the plan.

GFIA reports deficiencies to the committee every quarter together with recommended remedial actions which are then followed up. Internal Audit provided the committee with a written report which assessed the internal financial controls, IT governance and the risk management process as adequate.

The Audit Committee is responsible for IT Governance on behalf of the Board and reviews the report of the Vice-President, IT, at each meeting. During the year the Information and Technology team conducted a global ISO 27001 security standard gap analysis to determine areas of weakness which were then addressed by implementing an Information Security Management System aligned to the ISO 27001 standard.

The CFO’s expertise was evaluated by the Audit Committee. The committee is satisfied that the CFO has the appropriate expertise and experience to carry out his duties as the financial director of the Company and is supported by qualified and competent senior staff.

Audit Committee statement

Based on information from and discussions with management and external auditors, the Audit Committee has no reason to believe that there were any material breakdowns in the design and operating effectiveness of internal financial controls during the year and that the financial records can be relied upon as the basis for preparation of the annual financial statements.

The Audit Committee considered and discussed this Integrated Annual Review with both management and the external auditors. During this process, the committee:

  • Evaluated significant judgements and reporting decisions
  • Determined that the going concern basis of reporting is appropriate
  • Evaluated the material factors and risks that could impact on the Integrated Annual Review
  • Evaluated the completeness of the financial and sustainability discussion and disclosures
  • Discussed the treatment of significant and unusual transactions with management and the external auditors

The Audit Committee considers that this Integrated Annual Review complies in all material respects with the statutory requirements of the various regulations governing disclosure and reporting of the annual financial statements and that the annual financial statements comply in all material respects with the Companies Act No 71 of 2008, as amended and IFRS. The Audit Committee has recommended to the Board that the annual financial statements be adopted and approved by the Board.

Remuneration Committee

It is the responsibility of this committee, amongst other things, to:

  • Establish the Company’s remuneration philosophy
  • Establish the terms and conditions of employment for executive directors and other senior executives (which currently includes a short-term performance-linked bonus scheme and a long-term share incentive scheme)
  • Review remuneration policies on a regular basis

The notice periods of the CEO and the CFO are two years and one year respectively. The Company has a maximum exposure of two-and-a-half years’ remuneration in respect of the CEO and two years remuneration for the CFO. These limits apply when their services are terminated as a result of a takeover or a merger.

Details of Directors’ fees and equity settled instruments are contained in the Remuneration Report on p7071 and on p52 of the Annual Financial Report 2012

Digging at Damang, Ghana
Digging at Damang, Ghana

Safety, Health and Sustainable Development Committee

It is the responsibility of this committee, amongst other things, to assist the Board in its oversight of the Company’s environmental, health and safety programmes – as well as its socio-economic performance. In particular, this includes the monitoring of the Company’s efforts to minimise health, safety and environment-related incidents and accidents, and to ensure its compliance with relevant regulations around health, safety and the environment. All members of the committee have been selected on the basis of their considerable experience in the field of sustainable development.

The Committee assessed its performance and effectiveness during the period under review and was found to be functioning satisfactorily and discharging its duties. The Committee continues to monitor compliance by management to the Group’s policies and procedures, as well as the implementation of any recommendations made by the Committee.

Capital Projects Control and Review Committee

It is the responsibility of this committee, among other things, to:

  • Satisfy the Board that the Company has used correct, efficient methodologies in evaluating and implementing capital projects in excess of R1.5 billion or US$200 million
  • Ensure that adequate controls are in place to review such projects from inception to completion, and make appropriate recommendations to management and the Board

The Committee assessed its performance and effectiveness during the period under review and was found to be functioning satisfactorily and discharging its duties. The Committee continues to review the results attained on completion of each project against the authorised work undertaken.

Social and Ethics Committee

The recently established Social and Ethics Committee saw its first full year of operation over 2012 and was subject to an annual work plan to ensure it met all of its statutory requirements.

It is the responsibility of this committee, to ensure, among other things, that:

  • Gold Fields discharges its statutory duties in respect of Section 72 of Companies Act No 71 of 2008 (as amended), dealing with the structure and composition of board subcommittees
  • Gold Fields adequately embeds the Ten Principles on Sustainable Development of the International Council on Mining and Metals and the Ten Principles of the United Nations Global Compact
  • Gold Fields upholds the goals of the Organisation of Economic Co-operation and Development (OECD) recommendations regarding corruption
  • Gold Fields complies with the Employment Equity Act (as amended), the Broad-Based Black Economic Empowerment Act (as amended) and the provisions of the 2014 Mining Charter
  • Gold Fields directors and staff comply with the Company’s Code of Ethics
  • Gold Fields practices labour and employment policies that comply with the terms of the International Labour Organization (ILO) protocol on decent work and working conditions
  • Gold Fields ensures the continued training and skills development of its employees
  • Gold Fields performs its responsibilities in respect of social and ethics matters and that these policies are reviewed on an annual basis, or as required

The Social and Ethics Committee is comprised of the chairs of the Audit Committee, Remuneration Committee, the Safety, Health and Sustainable Development Committee and the Nominating and Governance Committee. Current members of the committee are Ms Wilson, Mr Pennant-Rea, Mr Murray and Ms Carolus, in their respective capacities. Mr Dañino is the Chair.

In December 2012, the Board, via the Social and Ethics Committee, commenced a thorough independent investigation concerning Gold Fields Black Economic Empowerment (BEE) transactions. The committee took this action following press reports raising questions about those transactions.

The Board engaged an independent international law firm, Paul, Weiss, Rifkind, Wharton & Garrison, LLP (Paul Weiss), with extensive experience in such matters, to undertake the investigation. The Board directed Paul Weiss to determine the facts, and to provide recommendations to the Board. The Board also asked Paul Weiss to review the Company’s relevant internal controls and to recommend any necessary improvements. The Board will report on this matter upon the conclusion of the investigation, which is being conducted with the full support of the Board and senior management.

Executive Committee

The Executive Committee (Exco) is not a committee 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. Furthermore, a disclosure coordinator has been appointed at each operation to ensure appropriate implementation throughout the Company.

Each of Gold Fields operating subsidiaries has established Board and Executive Committee 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.

Members of the Executive Committee have also been identified as the prescribed officers of the Company in terms of Section 66(10) of the Companies Act No 71 of 2008 (as amended).

Members of the Executive Committee (as at 26 March 2013)

Nicholas J Holland   1. Nicholas J Holland (54)

Chief Executive Officer (CEO)

BCom, BAcc, University of the Witwatersrand; CA(SA)

Mr Holland was appointed an executive director of Gold Fields in 1998 and became CEO on 1 May 2008. Prior to that he was the Company’s CFO. Mr Holland has more than 31 years’ experience in financial management, of which 23 years were in the mining industry. Prior to joining Gold Fields, he was Financial Director and Senior Manager of Corporate Finance at Gencor. He is also an alternate director of the Rand Refinery.

     
Paul A Schmidt   2. Paul A Schmidt (45)

Chief Financial Officer (CFO)

BCom, University of the Witwatersrand; BCompt (Hons), Unisa; CA(SA)

Mr Schmidt was appointed CFO on 1 January 2009 and joined the Board on 6 November 2009. Prior to this, he held the positions of acting CFO from 1 May 2008 and Financial Controller from 1 April 2003. He has more than 17 years’ experience in the mining industry.

     
Naseem A Chohan   3. Naseem A Chohan (52)

Senior Vice-President: Sustainable Deve

BEng (Elec), University of Limerick, Ireland

Mr Chohan joined Gold Fields in September 2010 as Senior Vice-President: Sustainable Development. Mr Chohan is a qualified Electronics Engineer and spent 25 years with De Beers during which he led the development of sustainability principles for the Company. He left De Beers in 2009 when he was Group Consultant, Sustainability and ECOHS (Environment, Community, Occupational Health and Hygiene, and Safety), to start his own mining consultancy.

     
James WD Dowsley   4. James WD Dowsley (54)

Senior Vice-President: Corporate Development

BSc (Mining Engineering), University of the Witwatersrand

Mr Dowsley has been General Manager of Corporate Development since March 1998, a title that changed to Senior Vice- President: Corporate Development, in 2002.

     
Michael D Fleischer   5. Michael D Fleischer (52)

Executive Vice-President: General Counsel

BProc, University of the Witwatersrand; Advanced Taxation Certificate, Unisa

Mr Fleischer was appointed as Executive Vice-President: General Counsel, on 1 November 2006. Prior to his appointment Mr Fleischer was a partner in the corporate services department at Webber Wentzel. Admitted as an attorney to the High Court of South Africa in 1991.

     
Jan W Jacobsz   6. Jan W Jacobsz (52)

Senior Vice-President: Head of Investor Relations and Corporate Affairs

BA (Political Science), University of Johannesburg

Mr Jacobsz was appointed Senior Vice-President and Head of Investor Relations and Corporate Affairs, as well as a member of the Group executive committee, on 15 April 2002. In addition, Mr Jacobsz held the portfolio of Group Sustainable Development Manager from 2002 to 2005. Prior to that, Mr Jacobsz was Senior Manager: Investor Relations and Corporate Affairs, Manager of Gold Fields Group Transformation Programme, and Administrator of the Gold Fields Foundation.

     
Ernesto Balarezo   7. Ernesto Balarezo (45)

Executive Vice-President: South America Region

BSc (Industrial Engineering), Texas A&M University; MSc Industrial Manag

Mr Balarezo was appointed as Executive Vice-President: South America, on 11 March 2013. Prior to this he was with Peruvian mining group Hochschild as VP Operations, with responsibility for the group’s silver and gold mining operations in Latin America, as well as its growth projects. He also held a number of other senior positions at Hochschild. Mr Balarezo replaced Juan-Luis Kruger who left Gold Fields after 4 years with the company.

     
Tommy D McKeith   8. Tommy D McKeith (49)

Executive Vice-President: Growth and International Projects

BSc (Hons) (Geology); GDE (Mining); MBA, University of Witwatersrand

Mr McKeith was appointed Executive Vice-President: Growth and International Projects, on 1 July 2011 having occupied the position of EVP: Exploration, since October 2007. Prior to rejoining Gold Fields in 2007 he was CEO of Troy Resources, NL. Between 2004 and 2006, Mr McKeith served as the Vice-President of Business Development at Gold Fields after holding various positions in mine geology, exploration and business development at the Company.

     
Kgabo Moabelo   9. Kgabo Moabelo (42)

Managing Executive: South Africa

BAdmin (Hons) (Industrial Psychology), Unisa; MSc (Engineering Business Management), University of Warwick

Mr Moabelo was appointed as Managing Executive: South Africa, from 1 March 2013. Prior to this he was Executive Vice-President: People and Organisational Effectiveness, having joined Gold Fields as Senior Vice-President, Human Resources (HR), on 1 October 2010. Prior to joining Gold Fields, he was the HR director for Cisco Systems, and, between 2005 and 2008, HR director for Standard Bank. Between 1999 and 2005 he held various HR positions at Anglo Platinum. Until 1 January 2013 the SA operations of Gold Fields were managed by Peter Turner, Executive Vice-President: South Africa, who left to join Sibanye Gold.

     
Tim Rowland   10. Tim Rowland (52)

Executive Vice-President: Group Technical Services

BSc (Hons) (Geology); MSc (Mineral Exploration); GDE (Mining Engineering); Pr Sci.Nat; FSAIMM; FGSSA; GASA

Mr Rowland was appointed Executive Vice-President: Group Technical Services, from 1 July 2011. He has 25 years’ mining industry experience and was acting Executive Vice-President: South Africa Region from 18 October 2010. Prior to this, he was Vice-President and Head of the Gold Fields Technical Division for the South African Region. He joined Gold Fields in 2003 from Anglo American, where he had held a number of senior technical positions.

     
Lee-Ann Samuel   11. Lee-Ann Samuel (35)

Senior Vice-President: Human Resources

BA Psychology, Political Science (Hons), University of Johannesburg; Global Remuneration Practitioner

Ms Samuel was appointed Senior Vice- President, Human Resources (HR), on 1 March 2013. She was previously Vice-President, Group Remuneration and Group Benefits. She joined Gold Fields in 2009 and has 14 years’ HR experience in the mining, financial services and telecommunications sector.

     
Peet van Schalkwyk   12. Peet van Schalkwyk (49)

Executive Vice-President: West Africa Region

BSc (Chemistry and Geology); Diploma in Industrial Relations

Mr Van Schalkwyk was appointed Executive Vice-President: West Africa Region, from 19 September 2011. He has more than 25 years’ experience in the mining industry. He returned to Gold Fields after a period in Turkey, where he was General Manager of Alamos Gold Inc. Prior to this he was General Manager of both the Damang and Tarkwa mines in Ghana. Before joining Gold Fields in 2007, he was the Metallurgical Manager of the Africa Region for AngloGold Ashanti, working in Mali and Tanzania.

     
Richard M Weston   13. Richard M Weston (61)

Executive Vice-President: Australasia Region

FAIMM; CPEng IEA; MSc (Mining Geomechanics), University of NSW; GDM; UCQ; BE (Civil), Sydney University

Mr Weston was appointed Executive Vice-President: Australasia Region, on 1 May 2010. He was formerly Senior Vice-President, Operations, for Coeur d’Alene Mines Corporation, a gold and silver mining company based in Idaho, US. Before joining Coeur, he oversaw the development of Barrick Australia’s Cowal gold project and, prior to that, Rio Tinto Australia’s ERA Ranger and Jabiluka uranium mines.

     
Karen Robinson   14. Karen Robinson (35)

Company Secretary

LLB, Advanced Certificate in Corporate and Securities Law

Ms Robinson was appointed as Assistant Company Secretary on 1 November 2011 and was promoted to the Company Secretary on 1 January 2013. She was previously the Company Secretary of Aveng Limited, Kagiso Trust Investments and the Assistant Company Secretary of Murray & Roberts Limited.