Anglo American Annual Report 2012

GOVERNANCE BOARD IN ACTIONNOMINATION COMMITTEEAUDIT COMMITTEESir John ParkerChairman,NominationCommitteeCompositionCompliant withthe Code:• Sir John Parker –chairman• David Challen• Sir CK Chow• Peter Woicke“TheNominationCommittee’s aimis to enhancethe currentdiversity ofthe Board byidentifying andnominatingsuitablyqualifiedcandidates.”Sir John ParkerChairman,NominationCommitteeRole and responsibilities• Setting guidelines (with the approval of theBoard) for the types of skills, experience anddiversity being sought when making a search fornew directors and with the assistance of externalconsultants, identifying and reviewing in detaileach potential candidate available in the market.The Committee then agrees a ‘long list’ ofcandidates for each directorship and followingfurther discussion and research decides upon ashortlist of candidates for interview. Shortlistedcandidates are each interviewed by theCommittee members who then convene todiscuss their impressions and conclusions,culminating in a recommendation to the Board;• Making recommendations as to the compositionof the Board and its committees and the balancebetween executive directors and NEDs, with theaim of cultivating a board with the appropriatemix of skills, experience, independence andknowledge of the Company;• Ensuring that the HR function of the Groupregularly reviews and updates the successionplans of directors and senior managers.Diversity policyTo increase the representation of women on theBoard (excluding the chairman) from 20% toabout 30% by 2013. In 2012 the representationof women on the Company’s Board (excludingthe chairman) reached 27%. With the resignationof Dr Ramphele in July 2012, this fell to 20%.Committee discussions in 2012• Following extensive research into potentialcandidates, Anne Stevens was appointed inMay 2012;• The Board received biannual presentations fromthe Group director, HR and corporate affairs.These presentations dealt with successionmanagement at ExCo level and long term talentmanagement across the Group;• Following the October 2012 announcementthat Cynthia Carroll would be standing downas CEO of the Company, the Committeeimmediately set in motion the process to identifya successor, resulting in the appointment ofMark Cutifani;• The Committee initiated a search for a furthernon-executive director to join the Board and theAudit Committee with the intention that theappointee will succeed David Challen aschairman of the Audit Committee;• Following an extensive search, Byron Grotewas identified by the Committee and has beennominated by the Board for election at the AGMon 19 April 2013.David ChallenChairman, AuditCommitteeCompositionCompliant with theCode andcomprises onlyindependentnon-executivedirectors:• David Challen –chairman• Sir PhilipHampton• Phuthuma Nhleko• Ray O’Rourke• Anne Stevens“The AuditCommitteeplays apivotal role inensuring highstandards ofcorporategovernanceand providesassurance tothe Board onits reports toshareholders.”David ChallenChairman, AuditCommitteeRole and responsibilities• Monitoring the integrity of the annual andinterim financial statements, the accompanyingreports to shareholders and corporategovernance statements;• Making recommendations to the Boardconcerning the adoption of the annualand interim financial statements;• Overseeing the Group’s relations with theexternal auditors;• Making recommendations to the Board onthe appointment, retention and removal ofthe external auditors;• Reviewing and monitoring the effectivenessof the Group’s internal control and riskmanagementsystems, including reviewingthe process for identifying, assessing andreporting all key risks;• Approving the terms of reference and plansof the internal audit function;• Approving the internal audit plan and reviewingregular reports from the head of internal audit oneffectiveness of the internal control system;• Receiving reports from management on thekey risks of the Group and management ofthose risks.Committee discussions in 2012At the February 2012 meeting the Committee:• Reviewed and approved the 2011 year endresults, accounting matters and press releasesubject to comments from the Committee toimprove the disclosures;• Reviewed the accounting treatment anddisclosure in connection with the option forthe Chilean state-owned entity, Codelco, tobuy a stake up to 49% in Anglo American Sur.The Committee approved the accountingtreatment and disclosure following the discussionwith management and the external auditors;• Discussed the external auditors’ reportthat included comments on internal controlfindings, a statement on their independenceand objectivity and compliance with the AuditPractices Board ethical standards and theletter of representation. The Committee notedthe report;• Reviewed a report on the Group’s ore reservesand mineral resources. Significant changes in thestatements from prior years were highlighted anddiscussed along with the three-year audit planconducted by independent third-party auditors;• Noted and approved the register of non-auditassignments conducted by the external auditorsin 2011;102 Anglo American plc Annual Report 2012