Corporate governance

Tharisa is incorporated in Cyprus and is therefore subject to Cyprus Companies Law. With a primary listing on the JSE under the general mining sector, Tharisa is subject to the JSE Listings Requirements and the requirements of the South African Code of Corporate Practices and Conduct laid out in King IV. Tharisa also has a secondary standard listing of its depositary interests on the London Stock Exchange (‘LSE’) and is subject to the LSE Listing Rules and Disclosure and Transparency Rules applicable to a secondary standard listing. In addition, Tharisa listed on the A2X exchange in South Africa with effect from 6 February 2019. Tharisa’s primary listing on the JSE and secondary standard listing on the main board of the LSE remain unaffected by the secondary listing on A2X. The A2X is a licensed stock exchange authorised to provide a secondary listing venue for companies and is regulated by the South African Financial Sector Conduct Authority in terms of the Financial Markets Act 19 of 2012. The listing on A2X provides an opportunity to improve liquidity and attract new investors through the lower trading costs offered by this trading platform. There are no additional regulatory requirements or ongoing obligations to comply with.

ESG HIGHLIGHTS

Letter from the Chairman of the SHE Committee and Lead independent non-executive director, David Salter

2019 was an important year for Tharisa, as the business grew and we delivered a solid safety performance and continued to make real advances in ingraining sustainability in our operations. Key to this is the evolving manner in which we monitor, control and report on our activities that impact and benefit all elements of society that we work with and the environment.

Sustainability

"Progressed development of a framework to evaluate and verify the benefits of our actions, in collaboration with others."

Tharisa believes that sustainability should function as a type of blueprint for shared value. Sustainability enables Tharisa to create value for all of its stakeholders including employees, investors, contractors, suppliers, the communities in which it operates, and the governments, municipalities and provincial authorities which host our operations.

One of the necessities of a modern mining company is its social licence to operate. We are proud of our relationships and commitments to our stakeholders and certainly believe in a life-long partnership. This, I believe, is one of the reasons why we have been successful in maintaining our social licence, no matter how tough the circumstances. We believe in effective stakeholder relationships based on shared value and mutual benefit.

At the highest level, Tharisa has built its sustainability strategy around the Equator Principles. We have also embraced the Ten Principles of the UN Global Compact ('UNGC'). The Equator Principles comprise a risk management framework, adopted by financial institutions, for determining, assessing and managing the environmental and social risks facing projects. The Principles provide a minimum standard for due diligence to support responsible risk decision making.

The UNGC is the world’s largest corporate sustainability initiative. It calls for companies to align strategies and operations with universal principles on human rights, labour, environment and anti-corruption. The Ten Principles of the UNGC aim to help advance societal goals.

In future, Tharisa will not only continue to exceed its obligations to create social capital as enshrined in South Africa's MPRDA, but will also strive to replicate this approach in ways that create positive socioeconomic and environmental impacts in all the territories in which we operate.

Much work remains to be done, but we will continue to minimise our environmental impact by reducing water and energy consumption, investigating the use of renewable energy solutions and creating further efficiencies in mining, processing and logistics. We also remain committed to continuing our work in close partnership with communities and host governments to entrench shared value, while delivering zero harm for our people.

David Salter

Highlights

  • Total Tharisa operations achieved four years fatality free
  • Tharisa Minerals achieved 5 000 fatality-free production shifts at its process plant operations and three million fatality-free shifts for the total Tharisa Minerals operations
  • Tharisa Minerals is committed to the Minerals Council’s Khumbul’ekaya “remember home” safety initiative which aims to ensure that the mining industry becomes fatality free
  • Enrolment for adult education and training (‘AET’) has grown from 82 learners to 224, including community members
  • Tharisa Minerals trained 20 interns and graduates from local communities specialising in mining, metallurgy and engineering
  • New environmental protection initiatives including launch of innovative soil remediation and bee conservation projects

AUDIT COMMITTEE

The Audit Committee, which must comprise at least three independent non-executive directors, is chaired by Antonios Djakouris, an independent non-executive director. Other members of the Audit Committee are David Salter, Omar Kamal and Carol Bell, all independent non-executive directors. The Board is satisfied that the committee’s members have the appropriate mix of qualifications and experience in order to fulfil their responsibilities appropriately. The Group’s independent external auditor, independent internal auditors, CFO and CEO attend committee meetings by invitation. The Audit Committee meets with the internal and external auditor, without any executive directors being present.

Both the internal and external auditors have unrestricted access to the Chairman of the committee and to the Chairman of the Board.

The Audit Committee provides the Board with additional assurance regarding the quality and reliability of financial information used by the Board and the financial statements of the Group. The committee reviews the internal and financial control systems, accounting systems and reporting and internal audit functions. It liaises with the Group’s external auditor and monitors compliance with legal requirements.

Furthermore, the Audit Committee assesses the performance of financial management, approves external audit fees and budgets, monitors non-audit services provided by the external auditor against an approved policy and ensures that management addresses any identified internal control weakness. In addition, the Audit Committee oversees the integrated reporting process, risk management systems, information technology risks (as they relate to financial reporting), the Group’s whistleblowing arrangements and policies and procedures for preventing corrupt behaviour and detecting fraud and bribery.

The committee has unrestricted access to all Company and Group information and may seek information from any employee. The committee may also consult external professional advisers in executing its duties.

The Chairman of the Audit Committee is required to report to the Board after each meeting of the Committee and the minutes of meetings of the Audit Committee are provided to the Board.

For more information on the activities of the Committee during the year under review, refer to the report of the Audit Committee.

The Audit Committee is satisfied as to the appropriateness of the expertise of Michael Jones, the CFO. The appropriateness of the expertise and experience of the CFO is considered on an annual basis.

The Audit Committee meets as often as is deemed necessary, but is required to meet at least twice a year. The committee met four times during the year under review.


RISK COMMITTEE

Control of the complete process of risk management, the evaluation of its effectiveness and approval of recommended risk management and internal control strategies, systems and procedures are key Board responsibilities. For this reason, the Risk Committee comprises the entire Board. The Risk Committee is chaired by Antonios Djakouris.

The Risk Committee reviews management reports on the adequacy and effectiveness of the Group’s operational risk management functions, ensures compliance with the Group’s risk management policies and reviews the adequacy of the Group’s insurance coverage.

During the year under review, the committee conducted a high-level review of the residual risks identified by management following a facilitated risk assessment workshop and subsequent business risk reviews undertaken at operating subsidiary level. It continues to monitor progress made by risk owners in identifying mitigating factors, performing gap analyses and implementing additional mitigating measures where required. In addition, the Risk Committee identifies reviews and evaluates non-operational and strategic risks impacting on the Company and the Group on an ongoing basis. The Risk Committee meets as often as is deemed necessary and met twice during the year under review.


NOMINATION COMMITTEE

The Nomination Committee is chaired by David Salter, the Lead Independent Director. Other members of the Nomination Committee are Antonios Djakouris, an independent non-executive director, and Loucas Pouroulis, the Executive Chairman. Loucas Pouroulis is entitled to participate and contribute to the Nomination Committee, but is not entitled to vote on any matter before the Nomination Committee. In the event of a tied vote, David Salter has a casting vote. The CEO attends meetings by invitation, if required.

The Nomination Committee ensures that the procedures for appointments to the Board are formal and transparent by making recommendations to the Board on all new Board appointments in accordance with the Company’s policy for Board appointments. It does so by regularly evaluating the Board performance, undertaking performance appraisals of the Chairman and directors, evaluating the effectiveness of Board committees and making recommendations to the Board. The Nomination Committee also considers and approves the Board succession plans.

The work of the Nomination Committee during the year followed both its terms of reference and established good practice in corporate governance. The committee conducted a review of the structure, size and composition of the Board, with specific emphasis on skills, knowledge, independence and diversity of the Board members.

The committee also considered the independence of non-executive directors. Consideration was given, among others, as to whether the individual non-executive directors are sufficiently independent of the Company so as to effectively carry out their responsibilities as directors, whether they are independent in judgement and character and that there are no conflicts of interest in the form of contracts, relationships, shareholding, remuneration, employment or related-party disclosures that could affect their independence.

The committee determined that David Salter, Antonios Djakouris, Omar Kamal, Carol Bell and Roger Davey are independent. Joanna Cheng and Zhong Liang Hong are not considered independent due to their association with significant shareholders.

The Nomination Committee met once during the year under review.


REMUNERATION COMMITTEE

All members of the Remuneration Committee are independent non-executive directors. The committee is chaired by Antonios Djakouris and other members of the committee are David Salter, Carol Bell and Roger Davey. The CEO and CFO are invited to attend meetings of the committee to make presentations, except when their own remuneration is under consideration. The Remuneration Committee considers the remuneration framework of the Executive Chairman, CEO, CFO and other members of the executive management of the Company and its subsidiaries, with reference to local and international benchmarks. As far as the remuneration of the Executive Chairman and the CEO is concerned, the committee considers and if appropriate, recommends the remuneration of the Executive Chairman and the CEO to the Board for final approval.

The committee also considers bonuses, which are discretionary and based upon general economic variables, the performance of the Company and each individual’s performance against personalised key performance indicators, allocations in terms of the Group’s incentive schemes and certain other employee benefits and schemes.

During the year, the committee reviewed various aspects of the Group’s remuneration structure, including executive salaries, performance-based remuneration schemes and the Share Award Plan. The committee is satisfied with the prevailing policies, remuneration and structure.

The committee met three times during the year under review.

The remuneration report may be found in the Integrated Annual Report.


SAFETY, HEALTH AND ENVIRONMENTAL COMMITTEE

All members of the committee are independent non-executive directors. The committee is chaired by David Salter and other members are Antonios Djakouris, Carol Bell and Roger Davey. The CEO and Chief Operating Officer attend the meeting by invitation.

The Safety, Health and Environment Committee develops and reviews the Group’s framework, policies and guidelines on safety, health and environmental management, monitors key indicators on accidents and incidents and considers developments in relevant safety, health and environmental practices and regulations.

The committee met four times during the year under review.


SOCIAL AND ETHICS COMMITTEE

As required by the JSE Listings Requirements, the Board established a Social and Ethics Committee. The committee is chaired by David Salter and other members are Antonios Djakouris, Omar Kamal, Carol Bell and Phoevos Pouroulis.

The committee’s objective is, inter alia, to assist the Board in ensuring that the Company and the other entities in the Group are and remain committed, socially responsible corporate citizens by creating a sustainable business and having regard to the Company’s economic, social and environmental impact on the communities in which it operates which, among others, includes public safety, HIV/Aids, environmental management, corporate social investment, consumer relationships, labour and employment, the promotion of equality and ethics management.

The committee has an independent role with accountability to both the Board and the Company’s shareholders. The committee does not assume the functions of management of the Company. These functions remain the responsibility of the Company’s executive directors, executive management and senior managers.

It is the committee’s responsibility to monitor the Group’s activities, having regard to any relevant legislation, other legal requirements or prevailing codes of best practice, with regard to matters relating to, among others, the following:

(i)

Social and economic development, focusing on the Company’s standing in terms of the goals and purposes of the 10 United Nations Global Compact Principles, among others:

  • upholding and respecting human rights
  • fair labour practices, which include the freedom of association, right to collective bargaining and the elimination of forced labour, child labour and discrimination
  • promotion of greater responsibility toward the environment
  • prevention of bribery and corruption
  • the Organisation for Economic Co-operation and Development’s recommendations regarding corruption
  • the Equator Principles
  • the Employment Equity Act and the Broad-Based Black Economic Empowerment Act, applicable to South African subsidiaries.
(ii)

Good corporate citizenship and the impact of the Group’s activities and of its products or services on the environment, health and public safety and the Company’s employment relationships and its contribution toward the educational development of its employees. In order to ensure that Tharisa is seen to be a responsible corporate citizen, the committee oversees and monitors, on an ongoing basis, the consequences of the Group’s activities and outputs on:

  • the workplace, by ensuring employment equity, fair remuneration, safety, health, dignity and development of employees and the Group’s standing in relation to the International Labour Organisation Protocol on decent work and working conditions
  • the economy, by working towards economic transformation
  • the prevention, detection and response to fraud and corruption
  • society, by upholding public health and safety, consumer protection, community development and protection of human rights
  • the environment, by ensuring the prevention of pollution, minimising waste disposal and protecting biodiversity.
(ii)

Ethical leadership and ethical behaviour, by reviewing the Company’s Code of Ethics and making recommendations to the Board for approval, reviewing results of whistleblowing activities, reviewing significant cases of employee conflicts of interest, misconduct or fraud, or any other unethical activity by employees or the Company and ensuring that the Company’s ethics performance is assessed, monitored, reported and disclosed.

The committee meets as often as it deems necessary but, in any case, at least once a year and at such other times as determined. The committee met once during the year under review.


NEW BUSINESS COMMITTEE

The New Business Committee is responsible for the investigation and assessment of new projects and business opportunities, particularly from a strategic, technical and operational point of view, and the identification of project-related risks, and safety, health and environmental risks. The Committee is not authorised to approve individual projects or investments or commit the Company, but works with executive management to review and evaluate new business opportunities and initiatives and make recommendations to the Board for approval. The committee has the right of access to management and/or external consultants and the right to seek additional information or explanations.

The committee is chaired by Roger Davey and other members are David Salter, Carol Bell, Loucas Pouroulis and Phoevos Pouroulis. Michael Jones attends meetings as a permanent invitee.

Meetings of the committee will be held as often as necessary to undertake its role effectively. The committee met five times during the year under review.


View further information on Corporate Governance in our Integrated annual report 2020