Corporate Governance Report
OVERVIEW
Our vision of global leadership in sustainable gold mining, and our ability to fulfil our stakeholder promises (p13 of the IAR) requires the highest levels of corporate governance. This means 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 sometimes 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 is 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 processes at Gold Fields need to be in line with the ever-changing and more stringent standards that are being rolled out by regulators across the globe. During the year, the Gold Fields Board approved an updated Code of Conduct for the Group that includes a stringent Anti-Bribery and Corruption policy. (See p40 of the IAR.)
In November 2016, the King IV Code of Corporate Governance (the Code) was launched, updating the guidelines set by the King III Code. The Board is committed to upholding the principles of the King IV Code and is taking the necessary steps to review all relevant guidelines, systems and processes to ensure full compliance with the Code by the end of 2017.
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| Underground mine operators at the South Deep mine, South Africa |
STANDARDS, PRINCIPLES AND SYSTEMS
Internal and External Standards and Principles
| Internal Standards and Principles | Listings Requirements | Sustainability Standards | Business Ethics Standards |
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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 Sustainable Development Framework: Gold Fields’ Sustainable Development Framework is based on best practice, as well as our operational requirements. The framework is governed by an overall Sustainable Development Policy The Group has developed a range of Policy Guidelines that direct business conduct. These are available online at www.goldfields.co.za/au_standards.php Code of Conduct: Gold Fields’ Code of Conduct commits and binds every employee, officer and director within Gold Fields to conducting business in an ethical and fair manner. The Board’s Audit and Social, Ethics and Transformation Committees are tasked with ensuring the consistent application of, and adherence to, the Code. The Code can be found at https://www.goldfields.co.za/cod-of-conduct/index.php |
Our primary listing is on the JSE Limited (JSE), and we are subject to the JSE Listings Requirements Gold Fields has a secondary listing on the New York Stock Exchange (NYSE) and therefore, as a foreign issuer, is subject to the NYSE Listings Requirements, the provisions of the US Securities and Exchange Commission, as well as the terms of the Sarbanes-Oxley Act (2002) Gold Fields is also listed on the Swiss Exchange (SWX) We have implemented South Africa’s King III Code on Corporate Governance (King III), principles and recommendations across Gold Fields. The Board is also committed to upholding the principles and recommendations of King IV and is currently taking steps to ensure full compliance with the Code by end-2017 |
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 guided by the 10 principles of the United Nations Global compact (in which we are a participant); we have incorporated the compact’s management model into our business activities, and make annual communication on progress report submissions All of our eligible operations conform with the World Gold Council Conflict-Free Gold Standard. A copy of our Conflict-Free Gold Report, our Statement of Conformance, together with the independent limited assurance report can be viewed online at www.goldfields.co.za/sus_reporting.php Our reporting is guided by the internationally recognised Global Reporting Initiative (GRI) G4-Core Sustainability Reporting Guidelines, including the Mining and Metals Sector Supplement and is supported by Gold Fields’ internal definition, available on request. Our 2016 GRI submission can be viewed online at www.goldfields.com>investors. |
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 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 governance requirements: South Africa’s King III Code, and the Prevention and Combating of Corrupt Activities Act (2004) The United States’ Sarbanes-Oxley Act (2002), Dodd-Frank Act (2010) and the Foreign Corrupt Practices Act (1977) All other relevant regulations and legislations in jurisdictions in which Gold Fields operates |
Board of Directors
Board Overview
The Board of Directors is the highest governing authority of the Group, and the Board’s Charter articulates its objectives and responsibilities. Likewise, each of the Board sub-committees operates in accordance with its written terms of reference, which are reviewed on an annual basis by various Board committees.
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.co.za/au_standards.php), the number of directors 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. A further non-executive director has been appointed with effect from 1 May 2017. 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 role of non-executive directors, 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 Chief Executive Officer (CEO) are kept separate. Non-executive directors Cheryl Carolus was the Chairperson of the Board and Rick Menell was the Deputy Chairperson, while Nick Holland was the CEO of Gold Fields for the entire period under review.
The Board is kept informed of all developments relating to the Group, primarily through the executive directors, the Group Executive Committee and the Company Secretary. Furthermore, the Board stays up-to-date through a number of other mechanisms, including management briefings, employee climate surveys, newsletters and internal staff communication, among others.
The non-executive directors are also 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 and access to the external auditors, when necessary. A brief curriculum vitae for each Board member is set out on p11 – 14 of this report.
Chief Financial Officer
Paul Schmidt was appointed Chief Financial Officer (CFO) from 1 January 2009. In accordance with the JSE Limited Listings Requirements, the Audit Committee evaluated his expertise and performance. The Committee continues to be satisfied that Mr Schmidt has the appropriate expertise and experience to carry out his duties as CFO of the Company and the Group, and is supported by highly qualified and competent senior staff.
The 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 2016 financial year.
Board Appointments and Rotation
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 Chair is appointed on an annual basis by the Board after a review of the Chair’s performance and independence. In line with recommendations by the King III Code, 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 also 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.
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.
The Board of Directors changed significantly during 2016. Steven Reid was appointed to the Board on 1 February 2016, Terence Goodlace on 1 July 2016, Alhassan Andani on 1 August 2016 and Peter Bacchus and Yunus Suleman on 1 September 2016. David Murray resigned on 1 June 2016, and Alan Hill and Kofi Ansah retired on 31 December 2016.
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.
Careful succession planning is critical to the Board’s effective functioning. Gold Fields understands and appreciates the importance of diverse perspectives on the Board. As such, we aim to achieve greater representation of women on the Board. Our succession plans take these needs into account and we will strive to make appointments in line with this commitment.
Directors’ Dealings in Shares of Gold Fields
Gold Fields’ Board members and employees are informed of closed and prohibited periods for share dealings by the Company Secretary in terms of the Gold Fields Share Dealing Policy. Closed and prohibited periods remain in force until final annual and bi-annual results are published. Similar special closed periods will be in place should the directors be aware of confidential price sensitive information. Any directors’ dealings (including executive directors) require the pre-approval of the Chairperson, and the Company Secretary keeps a register of such dealings.
Board Remuneration
Non-executive Board members are remunerated for their services as non-executive Board members, the separate committees they sit on annually, and where applicable, travel expenses to attend Board meetings. Shareholders approve these fees on an annual basis at the Company’s Annual General Meeting as prescribed in the South African Companies Act. Further details on non-executive directors’ and executive directors’ remuneration can be found in the Remuneration Report.
Board of Directors’ Charter
During 2016, the Board reviewed the Board of Directors’ Charter to align it to the recommendation of King III. The Board Charter will also be reviewed and aligned to the recommendations of the King IV Code, which becomes effective in April 2017. The application of the King III principles at Gold Fields can be found on our website at www.goldfields.com>investors.
The Charter compels directors to promote the Vision of the Company while upholding sound principles of corporate governance. Other directors’ responsibilities under the Charter include:
- Determining the Company’s Code of Ethics and conducting its affairs in a professional manner, upholding the core values of integrity, transparency and enterprise
- Evaluating, determining and ensuring the implementation of corporate strategy and policy
- Determining compensation, development, and other relevant policies for employees
- Developing and setting best-practice disclosure and reporting procedures that meet the needs of all stakeholders
- Authorising and controlling capital expenditure and reviewing investment capital and funding proposals
- Constantly updating risk management systems, including setting management expenditure authorisation levels and exposure limit guidelines
- Reviewing executive succession planning and endorsing senior executive appointments, organisational changes and general remuneration policies. In this, the Board is guided by the Remuneration Committee as well as the Nominating and Governance Committee
Company Secretary
The Company Secretary provides company secretarial services, oversees Board governance processes in relation to the Board (in accordance with JSE Listings Requirements and the Companies Act of 2008, as amended) and attends all Board and most 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 the ongoing training of directors 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.
Board Attendance
The Board is required to meet at least four times a year. It convened eight times during 2016 as four special Board meetings were held to deliberate on urgent substantive matters.
Meetings of the Board may be conducted by electronic communication in terms of the Board Charter. 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 focuses 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 non-executive directors.
With the appointment of five new non-executive directors during 2016, the composition of the committees was reviewed and approved at the August 2016 Board meeting.
Number of Board Meetings, Board committee Meetings and Directors’ Attendance during the Year
| Directors | Board meetings | Special Board meetings | Audit Committee | Safety, Health and Sustainability Committee | Capital Projects Committee | Remune- ration Committee | Social, Ethics and Transformation Committee | Nominating and Governance Committee | Risk Committee |
| No. of meetings per year | 4 | 4 | 71 | 4 | 4 | 4 | 4 | 4 | 2 |
| CA Carolus2 | 4 | 4 | – | 4 | 4 | 4 | 4 | 4 | – |
| A Andani4 | 2 | 2 | 3 | 2 | 2 | 1 | – | – | 1 |
| K Ansah2 | 4 | 4 | – | 4 | 1 | – | 3 | 4 | – |
| PJ Bacchus5 | 1 | 2 | 2 | – | 2 | 1 | 1 | – | 1 |
| TP Goodlace3 | 2 | 2 | – | 2 | 2 | – | 1 | – | 1 |
| AR Hill | 4 | 4 | – | 4 | 4 | 4 | 4 | – | 1 |
| NJ Holland | 4 | 4 | 7 | 4 | 4 | 4 | 4 | 4 | 2 |
| RP Menell2 | 4 | 4 | 6 | 3 | 4 | – | 4 | 4 | – |
| DN Murray7 | 2 | 2 | – | 2 | 2 | – | 1 | – | – |
| DMJ Ncube2 | 4 | 4 | 6 | 3 | 1 | 4 | 4 | 4 | – |
| SP Reid2 | 4 | 3 | 2 | 4 | 4 | 4 | 3 | 1 | 2 |
| PA Schmidt | 4 | 4 | 7 | – | 2 | – | – | – | 2 |
| YGH Suleman2 | 1 | 1 | 2 | 1 | 1 | – | 1 | – | 1 |
| GM Wilson | 4 | 4 | 7 | – | 4 | 4 | 4 | – | 2 |
| 1 | This included an unscheduled special meeting of the Audit Committee |
| 2 | During 2016, certain Board members attended the following Committees by invitation: |
| a. CA Carolus - Capital Projects Committee; | |
| b. K Ansah - Social, Ethics and Transformation Committee; Capital Projects Control and Review Committee | |
| c. DMJ Ncube - Safety, Health and Sustainability Committee (SHSD) | |
| d. RP Menell - Nominating and Governance Committee | |
| e. SP Reid - Audit Committee; Capital Projects and Review Committee | |
| f. YGH Suleman - Capital Projects and Review Committee | |
| 3 | TP Goodlace was appointed to the Board with effect from 1 July 2016. He was appointed as Chair of the SHSD Committee on 15 August 2016. He attended the following meetings by invitation in August 2016: Audit Committee, Capital Projects Control and Review Committee, Risk Committee and Social, Ethics and Transformation Committee |
| 4 | A Andani was appointed to the Board with effect from 1 August 2016. He attended the following Committee meetings by invitation in August 2016: Audit Committee, Capital Projects Committee, Risk Committee, SHSD Committee and Social, Ethics and Transformation Committee |
| 5 | P Bacchus was appointed to the Board with effect from 1 September 2016. He was appointed as Chair of the Risk Committee from 1 January 2017 onwards. SP Reid chaired the Risk Committee until 31 December 2016. |
| 6 | YGH Suleman was appointed to the Board with effect from 1 September 2016. |
| 7 | D Murray resigned from the Board on 1 June 2016 |
The full Directors’ Report is contained in the Annual Financial Report on p19 – 26.
DIRECTORS
NON-EXECUTIVE DIRECTORS
Cheryl Carolus (58)
Non-executive Chairperson
BA Law; Bachelor of Education, University of the Western Cape; Honorary Doctorate in Law, University of Cape Town
Appointed to the Board: Director 2009, Chairperson 2013
Experience and expertise: Governance and compliance, social development, training and development, people management
Ms Carolus has served on the boards of numerous listed companies, including De Beers and Investec. She is a Board member for many not-for-profit organisations, including the International Crisis Group, Soul City, World Wildlife Fund (South Africa and internationally), The British Museum (appointed by HM Queen Elizabeth), and is Chairperson of the SA Constitution Hill Education Trust.
In the past, Ms Carolus was Chairperson for South African Airways, the South African National Parks Board and has served on the boards of numerous public and private partnerships that address socio-economic challenges. Additionally, she served as South Africa’s High Commissioner to the United Kingdom from 2001 to 2004.
Ms Carolus played a role in the liberation struggle of South Africa and the constitution-making process. She was awarded an honorary doctorate in law from the University of Cape Town for her contribution to freedom and human rights. In 2014, she was awarded the French National Order of Merit by the Government of France.
Richard Menell (61)
Deputy Chair
BA (Hons), MA (Natural Sciences Geology), Cambridge; MSc (Mineral Exploration and Management), Stanford University, California
Appointed to the Board: Director 2008, Deputy Chair 2015
Experience and expertise: Executive management, geology
Mr Menell became a non-executive director of Sibanye Gold in 2013. He has over 37 years’ experience in the mining industry, including service as the President of the Chamber of Mines of South Africa, President and CEO of Teal Exploration & Mining, as well as Executive Chair of Anglovaal Mining and Avgold. He is a director of Weir Group Plc as well as a Senior Adviser to Credit Suisse. He also serves as a director for a number of unlisted companies and not-for-profit organisations.
Gayle Wilson (72)
Non-executive Director
BCom, BCompt (Hons), University of South Africa; CA(SA)
Appointed to the Board: 2008
Experience and expertise: Auditing, fi nance, governance and compliance, risk management
Ms Wilson was an audit partner at Ernst & Young for 16 years, where her focus was on listed gold and platinum mining clients. She was lead partner on the global audit of AngloGold Ashanti and other mining clients which included Northam Platinum, Aquarius Platinum, Avmin (now African Rainbow Minerals) and various Anglo Platinum operations.
Peter Bacchus (47)
Non-executive Director
MA (Economics), Cambridge University
Appointed to the Board: 2016
Experience and expertise: Investment banking, financing, mergers and acquisitions
Mr Bacchus is Chairman of the independent merchant banking boutique, Bacchus Capital Advisers. He has acted as the Global Head of Mining and Metals, and is Joint Head of European Investment Banking at Investment Bank Jefferies, a position he held until 2016. Before this he served as Global Head of Mining and Metals at Morgan Stanley, and prior to that, he was Head of Investment Banking, Industrials and Natural Resources at Citigroup.
Mr Bacchus has spent 25 years in investment and corporate banking with a focus on the global natural resources sector and is a member of the Institute of Chartered Accountants, England and Wales. He is also a non-executive director of UK-listed mining group NordGold and a trustee of Space for Giants, an African-focused conservation charity.
Alhassan Andani (55)
Non-executive Director
BSc (Agriculture), University of Ghana; MA (Banking and Finance), Finafrica Institute in Italy
Appointed to the Board: 2016
Experience and expertise: Investment banking, financing
Mr Andani was appointed a non-executive director of Gold Fields with effect from 1 August 2016. He is currently Chief Executive and Executive Director of Stanbic Bank Ghana; the Board Chairman of the Ghana CSIR (Council for Scientific & Industrial Research) and a director of SOS Villages Ghana and has held other corporate directorships in the past.
Yunus Suleman (59)
Non-executive Director
BCom, University of KwaZulu-Natal; BCompt (Hons), University of South Africa; CA(SA)
Appointed to the Board: 2016
Experience and expertise: Auditing, financial accounting
Mr Suleman serves as an independent non-executive director of Liberty Holdings, Tiger Brands, and Albaraka Bank, and is the Global Treasurer of the World Memon Organisation as well as the Chairman of Enactus SA. He was previously Chair of KPMG South Africa.
Terence Goodlace (57)
Non-executive Director
MBA, University of Wales; BCom, University of South Africa; NHDip (Metalliferous Mining), Witwatersrand Technikon
Appointed to the Board: 2016
Experience: Corporate development, operations management, mining, strategy
Mr Goodlace’s mining career commenced in 1977, spanning nearly 40 years of working with different organisations. He has previously served as both an Executive Vice-President and the Chief Operating Officer for Gold Fields, returning now to the Company to serve as an independent non-executive director. He has experience serving as Chief Executive Officer at Impala Platinum Holdings Limited and Metorex Limited. He served on the Impala Platinum Holdings Limited board for two years as an independent non-executive director and four and a half years as an executive director. He spent three years as an executive director of Metorex Limited.
Donald Ncube (69)
Non-executive Director
BA (Economics and Political Science), Fort Hare University; Postgraduate Diploma in Labour Relations, Strathclyde University; Graduate MSc (Manpower Studies), University of Manchester; Diploma in Financial Management; Honorary Doctorate in Commerce, University of the Transkei
Appointed to the Board: 2006
Experience and expertise: Finance, governance, social development, labour relations, people management
Mr Ncube was appointed a director of Gold Fields on 15 February 2006. Previously, he was an alternate director of Anglo American Industrial Corporation and Anglo American Corporation, a director of AngloGold Ashanti as well as non-executive chairperson of South African Airways. He is currently Executive Chairperson for both Badimo Gas and Afro Energy.
Steven Reid (61)
Non-executive Director
BSc (Mineral Engineering), South Australian Institute of Technology; MBA, Trium Global Executive
Appointed to the Board: 2016
Experience and expertise: Mining engineering, risk management, compensation management
Mr Reid has 40 years of international mining experience and has held senior leadership roles in numerous countries. He has served as a director of Silver Standard Resources since January 2013 and a director of Eldorado Gold since May 2013. He served as Chief Operating Officer of Goldcorp from January 2007 until his retirement in September 2012, and prior to that was the company’s Executive Vice President in Canada and the USA. Before joining Goldcorp, Mr Reid spent 13 years at Placer Dome in numerous corporate, mine management and operating roles. He also held leadership positions at Kingsgate Consolidated and Newcrest Mining, where he was responsible for the Asian and Australian operations.
EXECUTIVE DIRECTORS
Nick Holland (58)
Chief Executive Officer (CEO)
BCom, BAcc, University of the Witwatersrand; CA(SA)
Appointed to the Board: Executive Director, 1998; CEO, 2008
Experience and expertise: Finance, mining, management
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 37 years’ experience in financial management, of which 27 years were in the mining industry. Prior to joining Gold Fields, he was Financial Director and Senior Manager of Corporate Finance at Gencor.
Paul Schmidt (49)
Chief Financial Officer (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
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 21 years’ experience in the mining industry.
NON-EXECUTIVE DIRECTORS WHO RESIGNED OR RETIRED DURING 2016:
Kofi Ansah (72)
Non-executive Director
BSc (Mechanical Engineering), UST Ghana; MSc (Metallurgy), Georgia Institute of Technology
Appointed to the Board: 2005 – Retired 31 December 2016
Alan Hill (74)
Non-executive Director
BSC (Hons); MPhil (Rock Mechanics), Leeds University
Appointed to the Board: 2005 – Retired 31 December 2016
David Murray (72)
Non-executive Director
BA (Hons) Econ; MBA, University of Cape Town
Appointed to the Board: 2008 – Resigned 1 June 2016
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| At the processing plant, Agnew, Australia |
APPLICATION OF KING III AND IV WITHIN GOLD FIELDS
The King Committee published the King IV Report on Corporate Governance for South Africa 2016 (King IV) on 1 November 2016. King IV, which replaces King III in its entirety, has been endorsed by the JSE. While King IV is effective in respect of financial years commencing on or after 1 April 2017, Gold Fields’ Board of Directors has agreed that the Company should implement the recommendations of King IV by the end of 2017.
The Board supported the recommendations on good governance contained in King III, the predecessor of the King IV report. The implementation and adherence to relevant King III principles and recommendations across Gold Fields can be found on the website at www.goldfields.com/about us.
Similarly, the Group’s reporting in terms of section 3.84 of the JSE Listings Requirements on board governance processes can be found in the table below. Will also be placed on the website at www.goldfields.com>investors.
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 detailing appointment to the Board of Directors.
The appointment must be formal and transparent and a matter for the Board as a whole, assisted where appropriate by a Nominating and Governance Committee. The Nominating and Governance Committee must constitute only non-executive directors of whom the majority must be independent. |
Gold Fields’ directors are appointed using a transparent and formal procedure, governed by the mandate and terms of reference of the Nominating and Governance Committee. Members of the Nominating and Governance Committee are independent non-executive directors.
The Chair of the Committee is an independent non-executive director. |
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| 3.84(b) | 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. | |
| 3.84(c) |
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 the King Code. |
Gold Fields’ CEO and Chairperson positions are held by different people, and the Chairperson is an independent non-executive director. Refer to p8 of this report. | |
| 3.84(d) |
All issuers must, in compliance with the King Code, appoint an Audit Committee.
Issuers must appoint a Remuneration Committee in compliance with the King Code. Where necessary, depending on the nature of the business, the issuer must appoint a Risk and Nominating Committee. 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. |
The Board appointed an Audit Committee that is chaired by an independent non-executive director. Audit Committee members are all independent non-executive directors.
Gold Fields’ Remuneration Committee comprises independent non-executive directors and is chaired by an independent chairperson. The Risk Committee is mandated with overseeing that the Group’s risk management policies, practices, systems and resources are in place and are functioning effectively. The Risk Committee is chaired by an independent non-executive director and members are all independent non-executive directors. Gold Fields has a Nominating and Governance Committee, chaired by an independent non-executive, director and members are all independent non-executive directors (see p17). |
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| 3.84(e) | Brief curricula vitae of each director standing for election or re-election must accompany the relevant notice of the meeting. | Brief curricula vitae of our directors are listed on p11 – 14 of this report. | |
| 3.84(f) | The capacity of each director must be categorised as executive, non-executive or independent. | The curricula vitae mentioned above (3.84(e)) 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 III. | |
| 3.84(g) | Issuers must have a full-time executive financial director. | Gold Fields has a full-time executive financial director. | |
| 3.84(h) | 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 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. | |
| 3.84(i) | The Board of Directors must consider and satisfy itself, on an annual basis, on the competence, qualifications and experience of the Company Secretary. | The Board considered the Company Secretary’s competence, qualifications and experience at the meeting held on 14 February 2017 and is satisfied that she is competent and has appropriate qualifications and experience to serve as the Company Secretary. | |
| 3.84(j) | The provision deals with the arm’s length relationship between the Board of Directors and the Company Secretary and the Board of Directors’ responsibility in relation thereto. | The Company Secretary has the appropriate skills and qualifications and is not a director. Accordingly, the Board is satisfied that the Company Secretary maintains an arm’s length relationship with the executive team, the Board and the individual directors. | |
| Disclosure in the annual report of the policy on the promotion of gender diversity at board level will be from 1 January 2017 onwards. As such all annual reports issued on or after 1 January 2017 will have to comply with the required disclosure. The intention with the lead time is to afford issuers with sufficient time to comply with the new requirement. | Careful succession planning is critical to the Board’s effective functioning. Gold Fields understands and appreciates the importance of diverse perspectives on the Board. As such, we aim to achieve greater representation of women on the Board. Our succession plans take these needs into account and we will strive to make appointments in line with this commitment. |
BOARD COMMITTEES
The Board has established a number of standing committees in compliance with the South African Companies Act with delegated authority from the Board. Committee members are all independent non-executive directors, and the CEO and various members of management are permanent invitees to committee meetings. Each Board committee is chaired by an independent
non-executive director.
Committees are required to evaluate their effectiveness and performance on an annual basis and to report respective findings to the Board for consideration. In line with the King III recommendations, the Board annually reviews the terms of reference for all committees, and, if necessary, adopts changes which are approved by the Board.
The committees operate in accordance with written terms of reference and have a list of responsibilities, which are set out below:
Nominating and Governance Committee
During 2016, the Nominating and Governance Committee reaffirmed its terms of reference. It is the responsibility of this Committee, which has three independent, non-executive directors (and an additional independent director who attends by invitation), among other things, to:
- Develop the Company’s approach towards Board corporate governance, including recommendations to the Board
- Identify successors to the posts of Chair of the Group, CEO and other executive appointments 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 Nominating and Governance Committee assessed its performance and effectiveness during the period under review and was found to be functioning and discharging its duties satisfactorily.
Audit Committee
The Audit Committee 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 No 71 of 2008, as amended, the King Report on Governance Principles for South Africa 2009 (King III) and the JSE Listings Requirements.
The full duties and responsibilities of the Audit Committee and the Audit Committee statement appear on p2 – 5 of this report. The Audit Committee, which has six independent, non-executive directors, of which three were appointed during 2016, assessed its performance and effectiveness during the period under review and was found to be functioning and discharging its duties satisfactorily.
Remuneration Committee
It is the responsibility of this Committee, which consists of six independent, non-executive directors, among 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 Company’s remuneration policies, as well as details of directors’ fees and equity-settled instruments, are contained in the Remuneration Report on p80 – 98 of this report.
Safety, Health and Sustainable Development Committee
It is the responsibility of this Committee, among 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 Safety, Health and Sustainable Development 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 and discharging its duties satisfactorily. The Committee consists of six independent directors (and one who attends by invitation) and continues to monitor performance by management in relation to the Group’s policies and guidelines, 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, which consists of five independent, non-executive directors (and an additional two who attend by invitation), among other things, to:
- Satisfy the Board that the Company has used correct, efficient methodologies in evaluating and implementing capital projects in excess of R1.5bn or US$200m
- 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 and discharging its duties satisfactorily. The Committee continues to review the results attained on completion of each project against the authorised work undertaken.
Social, Ethics and Transformation Committee
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 the Companies Act No 71 of 2008, as amended
- Gold Fields adequately embeds the 10 Principles on Sustainable Development of the International Council on Mining and Metals (ICMM) and the 10 Principles of the United Nations Global Compact
- Gold Fields upholds the goals of the Organisation of Economic Cooperation 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 Conduct
- Gold Fields practices labour and employment policies that comply with the terms of the International Labour Organisation (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 Committee also has assumed oversight over the South Deep Education Trust, the South Deep Community Trust and the Westonaria Community Trust.
The Social, Ethics and Transformation Committee comprises the chairs of the Audit Committee, Remuneration Committee, the Safety, Health and Sustainable Development Committee, Nominating and Governance Committee and the Capital Projects Committee.
Risk Committee
The Committee assists the Board in ensuring that management identifies and implements appropriate risk management controls. The Committee, which consists of six non-executive, independent directors, acts in terms of delegated authority in respect of the duties and responsibilities assigned to it by the Board.
The Committee assists the Board and the boards of all subsidiary companies of Gold Fields in their oversight of the integrity and effectiveness of the risk management processes. The Committee continues to review the results attained on completion of each project against the authorised work undertaken.
Executive Committee
The Executive Committee (Exco) is not a Committee of the Board. It is primarily responsible for the implementation of Company strategy, day-to-day management of the Company, 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. The Executive Committee consists of the prescribed officers and executive directors of Gold Fields – 12 members in total.
Each of Gold Fields’ regional operating subsidiaries has established Regional Board and Regional 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.