CORPORATE GOVERNANCE FRAMEWORK

Regulatory compliance with the King Code of Governance Principles of South Africa

The directors endorse the King Code of Governance Principles of South Africa (King III) and accept full responsibility for the application of the principles necessary to ensure that effective corporate governance is practised consistently throughout the Company.

We intend to discharge this responsibility by applying the requirements of King III in both letter and spirit. Since RBPlat has converted to a listed public company, the directors have taken steps to ensure that we are, and remain fully compliant with the requirements of King III. See our King III assessment (PDF - 164KB).

Empowerment credentials

The Mining Charter, a broad-based socio-economic charter based on the Mineral and Petroleum Resources Development Act (South Africa) (MPRDA), provides a framework to facilitate the inclusion of historically disadvantaged South Africans (HDSAs) into the mining industry.

According to this legislation, at least 15% of the equity of mining companies was to be in the hands of HDSAs by 2009, and at least 26% must be owned by HDSAs within ten years (2014).

The Royal Bafokeng Nation, represented by the Royal Bafokeng Nation Development Trust (RBNDT) through Royal Bafokeng Holdings, its investment vehicle, has a majority (57.5%) equity stake and control of RBPlat, resulting in RBPlat being a fully empowered company in respect of the broad-based HDSA ownership. The extent of compliance with the Mining Charter is shown in our 2012 Mining Charter scorecard.

Corporate structure

The Board

The unitary Board is satisfied that it meets the requirements to maintain an effective Board which is collectively responsible for the success of the Company. Our Board of Directors currently consists of three executive directors and seven non-executive directors, six of whom are independent non-executive directors (including the Chairperson). The Board, chaired by Advocate Kgomotso Moroka, is ultimately responsible for the Company's business strategy and key policies.

Board responsibility

A Board Charter has been drafted and adopted, setting out the Board's roles, functions, obligations, rights, responsibilities and powers. It also includes the policies and practices of the Board in respect of its duties, functions and responsibilities. The Charter commits the Board to ensuring that we demonstrate that we are a responsible corporate citizen through the development and implementation of strategies and policies in relation to our economic, social and environmental impacts.

Responsibilities of Chairperson and Chief Executive Officer

A clear separation is maintained between the responsibilities of the Chairperson and the Chief Executive Officer (CEO), as documented in the Board Charter. The Chairperson is responsible for leadership of the Board and ensuring the integrity and overall effectiveness of the Board and its committees. The CEO's responsibility is to focus on the operation of the business, ensuring it is run efficiently and effectively in accordance with the strategic decisions of the Board.

Board committees

All the members of the Audit and Risk Committee are independent non-executive directors. The Remuneration and Nomination Committee is made up of three non-executive directors, two of whom are independent. The Social and Ethics Committee is chaired by a non-executive director who has been selected as Chairperson because of his wealth of experience and expertise in safety, health and sustainable development matters. Although not an independent non-executive director, he is supported by three independent non-executive directors who are members of the Social and Ethics Committee and two executive directors including the CEO, Steve Phiri.

Appointments to the Board

In terms of our Articles of Association, our directors are ultimately appointed by our shareholders. The Company's Board of Directors also has the power to appoint additional directors. In terms of the Board Charter, appointments to the Board are made on the recommendation of the Remuneration and Nominations Committee. The procedures for appointing directors to the Board are formal and transparent.

Professional development

All newly appointed directors receive both formal and informal induction training related to the Company and their duties as directors. In addition, ongoing support and resources are provided to directors in order to enable them to extend and refresh their skills, knowledge and familiarity with the Company. The directors also have unrestricted access to executive and general management in order to acquire any knowledge or information relevant to the discharge of their duties.

Performance assessments

The Board is responsible for undertaking regular performance assessments of the Chairperson, CEO, the non-executive directors, the Board as a whole, individual managers and Board committees in order to evaluate their effectiveness and performance.

Following our Board evaluation process, which was finalised in January 2012, certain directors received specific training related to mine operational and technical activities which included matters related to safety and health. Similar additional training is also planned for 2013.

Managing economic, environmental and social risks and opportunities

The Board of directors has committed the company to a process of risk management aligned to the principles of King III.

We apply the precautionary principle in our approach to actively managing identified risks, without necessarily requiring a scientific consensus regarding the potential for risk to occur before action is taken.

Roles and responsibilities for risk management are clearly established throughout RBPlat and the internal audit function is tasked with testing the adequacy of management controls in the business throughout the year, to promote a culture of continual improvement in risk management.

We have adopted an enterprise risk management (ERM) approach to risk, which is aligned with our approach to governance. The objective of our enterprise risk management policy, which covers all the categories of risk contained in our risk categorisation model, is to provide minimum mandatory standards for the management of risk across the RBPlat Group. The development of these standards was guided by South African legislation and international best practice.

Ethics and human rights

Our Board believes ethics are about an attitude towards doing business in the best possible way. The highest standards of ethical business conduct are required of all our directors, managers and employees, including contractors and consultants.

We became signatories of the United Nations (UN) Global Compact in May 2012 and are committed to upholding the UN Universal Declaration of Human Rights and the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work and complying with all relevant South African legislation. At RBPlat, we have a zero tolerance approach to any behaviour which may compromise the principles of human rights. The necessary grievance and corrective action procedures are in place to ensure that breaches are reported and dealt with accordingly. Training in human rights and ethics form part of our induction process at Bafokeng Rasimone Platinum Mine (BRPM).

The Anglo Platinum whistle-blowing facility has been available to employees, contractors and members of the public to raise any concerns regarding fraud, theft, dishonest business activities, misappropriation of Company resources, incorrect health and safety practices, corruption or any other unethical behaviour. BRPM is in the process of developing its own whistle-blowing facility. An independent and confidential ethics line has also been introduced for the reporting of irregular or suspicious activities and is operated by KPMG.

No legal action of any kind has been instituted against RBPlat during 2012 as far as we are aware. RBPlat is in discussion with the Department of Department of Mineral Resources (DMR) regarding a fine which is not material in nature.

Code of ethics policy (PDF - 39KB)

Information and communication technology governance

A detailed assessment of the Information & Communication Technology (ICT) and Enterprise Resource Planning (ERP) structures and framework was conducted in 2010, prior to our listing on the JSE.

During the information and communication technology (ICT) migration we worked closely with Anglo American Platinum, ICT suppliers and RBPlat super users on all migration aspects and kept employees informed on all the required milestones achieved during the process.

Our focus in 2013 will be the bedding down of the ICT service and governance processes.