Good governance is at the core of Anglo American’s board and committee
structure. In this section we have tried to give a clear and concise
description of that structure and the processes that support it. But
first, I would like to explain why I believe good corporate governance
is so important.
Over a number of years now we have seen an ever increasing focus on
standards of corporate governance, with a series of reviews and guidance
culminating, in June 2010, with the publication of the UK Corporate
Governance Code (the Code). This process of codification has provided
both important guidance for companies and, quite rightly, an agreed
set of standards against which others can judge our corporate governance
performance. I am pleased to report that Anglo American will fully
comply with the new Code, as we did with its predecessors.
Good governance is about more than mere compliance, however. For example,
by separating and clearly stating the roles and responsibilities of
the chairman and chief executive we aim to avoid unhealthy concentrations
of authority; by appointing strong independent directors we benefit
from their expertise and perspective and reduce the risk of ‘groupthink’.
Good corporate governance is therefore not just about making decisions
in the right way, it is about making better decisions. I strongly believe
that good corporate governance creates value.
Board refreshment
Since my appointment I have sought to continue and accelerate the
process of board refreshment. Sir Philip Hampton, Ray O’Rourke and
Jack Thompson were recruited as independent non-executive directors
(NEDs) to replace the three retiring NEDs: Chris Fay, Sir Rob Margetts
and Fred Phaswana. The new NEDs bring financial, strategic, mining,
engineering and major project experience to the already highly skilled
and diverse board. During 2010 we also made changes to committee composition
in order to incorporate the new NEDs.
In compliance with the Code, and in advance of its full implementation,
the entire Board is being proposed for re-election at the 2011 Annual
General Meeting. Anglo American has a diverse board that is equipped
to drive a global listed mining group. We are proud to be led by Cynthia
Carroll, one of a handful of female FTSE 100 chief executives, while
the Board as a whole comprises men and women from France, Germany,
Hong Kong, Ireland, South Africa, the UK and the US. However, diversity
is not simply about gender or race – the Anglo American Board has been
selected on the basis of the varied backgrounds, skills, experience
and insight of its members.
The Nomination Committee has defined the skills and experience profiles
required of future NEDs over the next few years. This includes our
aim to increase the representation of women on the Board (excluding
the chairman) from 20% to 30% within two years.
Board effectiveness
Following the external review in 2008, we held a comprehensive internal
board evaluation in 2010 where directors were consulted on matters
such as board composition, effectiveness, strategy and directors’ development
and which resulted in a rigorous action plan being implemented in 2011.
For details see the table below. As chairman I also held a one to one
interview with each director to review those issues raised during the
board evaluation process. The next external board evaluation will be
held in 2011.
Action plan resulting from 2010 Board effectiveness review
Relationship
between board
and management |
- Increase contact between directors and management during
intervals between board meetings
- Introduce more ‘free flowing’ informal discussions outside
board meetings - the pre-board meeting dinners will be more ‘structured’ whilst
retaining an informal style
|
Improving board
meeting
effectiveness |
- Enhance the information flow to NEDs between board meetings
to allow for a more focused board agenda
- Introduction of iPads to ensure timely provision of board
materials
- Management will consider the optimum level of detail in
presentations to the Board
|
| Committees |
- S&SD Committee – outside stakeholders to be invited
to address some
committee meetings
- Nomination Committee – detailed human resources talent strategy presented to NEDs in February 2011
- Remuneration Committee – the Committee will allot more time for ‘members only’ discussions
|
Key focus points
highlighted by
NEDs |
- Political and regulatory uncertainty;
business integrity
processes – Bribery Act 2010
- Safety and the environment
- Strategy
- Project execution
- Talent development and management succession
|
| Performance of NEDs |
- The number of site visits will be increased during 2011
- A full day mining seminar has been arranged for NEDs
- A half day exploration seminar for NEDs took place in February
2011
|
‘Corporate Governance’ is a much used (and often abused) term – it
means much more than a set of rules and processes governing the running
of a company. As chairman, I have endeavoured to ensure that Anglo
American not only complies with all relevant codes and regulations
but that the whole management structure is inculcated with a desire
to achieve the best results for its shareholders and all others affected
by its actions in the most responsible way.
Long before the term ‘corporate governance’ was coined, the founder
of the Anglo American Group, Sir Ernest Oppenheimer, said: “the aims
of this Group have been – and they still remain – to earn profits but
to earn them in such a way as to make a real and permanent contribution
to the well-being of the people and to the development of southern
Africa”. Time has moved on since then and Anglo American now has a
significantly wider geographical reach than when Sir Ernest spoke these
words, but the sentiment remains deeply engrained throughout the Company
and I shall do my utmost to ensure that your Company adheres to the
highest possible corporate behaviour and standards.
Sir John Parker
Chairman