Merafe Resources Integrated Annual Report 2018

MERAFE RESOURCES INTEGRATED ANNUAL REPORT 2018 44 TRANSPARENCY AND ACCOUNTABILITY Introduction Merafe is committed to high standards of corporate governance and it endorses the four governance outcomes set out in King IV, namely an ethical culture, good performance, effective control and legitimacy. Our approach to governance King IV register The register set out below provides an overview of Merafe’s application of the principles contained in King IV. The register should be read in conjunction with the 2018 Merafe Integrated Annual Report. Leadership Principle 1 The governing body should lead ethically and effectively. The Merafe Board (the "Board”) leads ethically and effectively. Disclosure of interests is a standard agenda item at Board and committee meetings and there is an annual declaration by all directors. Further, there is a Code of Ethics in place which applies to all directors and all employees. It is displayed on Merafe’s website. There is also a Director Induction and Training Programme, which is reviewed annually. Further, various aspects of Principle 1 are covered in Merafe’s Board Charter and other key documents. The Code of Ethics and the Board Charter are on Merafe’s website and form part of the 2018 online Integrated Annual Report. The Company has a policy to guide directors on dealing in Company securities and no director or employee may buy or sell the Company's shares during a closed period. Organisational ethics Principle 2 The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture. The ethical tone at Merafe is set by the Board and applies throughout the organisation. Although Merafe’s Code of Ethics applies to all directors and employees, it has not yet been extended to suppliers. This will be a focus area in 2019. There is a Whistle Blowing Line and reports are provided to the Social, Ethics and Transformation Committee and the Audit and Risk Committee on a confidential basis. In respect of any ethical breaches discovered by staff and the external auditors, the relevant laws and regulations are applied. More information on Merafe and the Venture's Whistle Blowing Policy is on our website. Responsible corporate citizen Principle 3 The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen. The Board’s approach to being a responsible corporate citizen is supported by various policies and the work done by the Social, Ethics and Transformation Committee. Various safety, health, environmental and community aspects are covered by the above committee with inputs from the Venture as set out in this report. Strategy and performance Principle 4 The governing body should appreciate that the organisation's core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process. The Board recognises that all these elements are inseparable, and Merafe follows the six capitals approach as described in this report. This integrated approach is taken by the Board at its meetings, strategy sessions and committee meetings. All budgets and strategic plans (medium and longer term) are approved by the Board. Risks and opportunities are covered in strategy sessions and meetings of the Audit and Risk Committee and the Board in an integrated manner. Reporting Principle 5 The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation's performance, and its short, medium and long-term prospects. The Board is responsible for the integrity of the information contained in this report and other reports including the annual financial statements and interim and year end results presentations. It is assisted in this regard by the Board Committees which review and recommend their respective reports to the Board in accordance with their terms of reference. Reports are provided in printed and online form. The approved reporting framework is set out on page 1 of this report. Matters material to Merafe are reflected in this report at pages 8 and 9. Primary role of the board Principle 6 The governing body should serve as the focal point and custodian of corporate governance in the organisation. The Board is the focal point and custodian of corporate governance in the Company. Various key policies supporting the strategy are in place. The Board has an annual strategy session and performance is measured against agreed targets. The Board oversees the implementation and execution of the strategy by management. The Board has a Board Charter, a copy of which is on our website, and which is reviewed annually against best practices. It measured and discharged its duties against the Board Charter in 2018. Composition of the board Principle 7 The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively. Assisted by the Remuneration and Nomination Committee, the Board reviews its knowledge, skills, experience, diversity and independence annually, or as circumstances change. The Company has a Diversity Policy and has set targets in this regard. The Board comprises a majority of non-executive members, most of whom are independent. The King IV recommendations for director independence, board composition, chair, induction and training, managing conflicts and nomination and appointments of directors are met. Merafe will appoint the Chairperson of the Remuneration Committee as the Lead Independent Director during 2019. Committees of the board Principle 8 The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties. Merafe has three standing Board Committees (as described in this report on pages 46 and 47), to which specific duties and responsibilities have been delegated. They operate under written terms of reference which are reviewed annually and are on our website. The composition of the Board and Committees are in line with King IV, the Companies Act and the JSE Listings Requirements, as applicable.