OUR COMMITMENT TO CORPORATE GOVERNANCE
The following sections provide an overview of our leading corporate governance initiatives, enhanced shareholder engagement efforts, how our Board oversees enterprise-wide risks, and how we have continued to build the right Board with experience and expertise that complements our strategy.
Our Board: Structure and Operations and Our Company: How We Operate contain a detailed description of our corporate governance practices in accordance with the applicable rules and standards of the Canadian Securities Administrators, the Toronto Stock Exchange (TSX), and the New York Stock Exchange (NYSE). We are committed to our governance practices being state-of-the art and generally abide by the rules of the NYSE Standards, even though most of them do not directly apply to Barrick as a Canadian company.
Our Corporate Governance Initiatives
- Board Independence: We adopted a minimum independence standard of two-thirds for our Board.
- Committee Independence: All of our Board committees are comprised entirely of independent directors.
- Independent Sessions: Our Corporate Governance Guidelines mandate that an in camera session follows every Board meeting (including special meetings) at which the independent directors meet without the non-independent directors and without any other officers or employees present.
- Enhanced Board Interlocks Policy: Our guidelines limit the number of board interlocks that can exist at any time to no more than two, and prohibit any senior executive of Barrick from serving on the board of directors of another public company if any senior executive of such other company serves on the Board of Barrick. A Board interlock occurs when two or more of Barrick’s directors also serve together as directors of another public company.
- Board Assessment: The Board, its committees, and individual directors participate in an annual assessment process in which the Lead Director and the Chairman of the Corporate Governance & Nominating Committee jointly interview each of the directors. The interview process includes director peer reviews and specific questions relating to the effectiveness of the Executive Chairman, the Lead Director, and the Committee Chairs. The results of the assessment process are reviewed with the entire Board, and the Lead Director and Chairman of the Corporate Governance & Nominating Committee meet with the individual directors to share feedback from the peer reviews.
- Continuing Education for Directors: We continue to enhance the ongoing education of our directors. Continuing education sessions are incorporated into all regularly scheduled Board meetings. For further details on the education program for 2017, see Board Orientation and Continuing Education.
- Shareholder Engagement Policy: In March 2016, the Board adopted a formal Shareholder Engagement Policy. The Policy is designed to facilitate an open dialogue and exchange of ideas between our Board and our shareholders. We encourage our shareholders to review the policy and to reach out to our directors to discuss matters of significance. The Policy is available on our website at www.barrick.com/company/governance.
- Majority Voting Policy: Any nominee proposed for election as a director who receives a greater number of votes withheld than votes in favor of his or her election, in an uncontested election, must promptly tender his or her resignation to the Executive Chairman, or in the case of the Executive Chairman, to the Lead Director. The resignation will be accepted absent exceptional circumstances.
- Enhanced Clawback Policy: Incentive compensation paid or granted to the Executive Chairman, Named Partners, and select senior employees is subject to clawback in cases of a material financial misstatement, or determination by the Board that wrongful conduct has occurred, which resulted in a plan participant receiving or realizing a higher amount of incentive compensation than would have been received or realized absent the wrongful conduct.
- Share Ownership Policies for Directors and Executives: Barrick maintains minimum share ownership requirements for its directors, executives, and other officers. Directors are required to hold at least three times the value of their annual Board retainer in Common Shares and/or Deferred Share Units (DSU). See Report on Director Compensation and Equity Ownership – Director Share Ownership Requirements of this Circular. Our NEOs are required to hold between four and ten times their salary in Common Shares, RSUs, and PGSUs. See Share Ownership Requirements.
- Anti-hedging Policy: Barrick has adopted a formal anti-hedging policy prohibiting all officers and directors from hedging the economic exposure of their share ownership and equity-based LTI compensation.
Leading Corporate Governance Initiatives
We continuously assess and enhance our governance practices every year.
Dedicated Focus on Corporate Governance
To allow us to put equal focus on enhancing our shareholder engagement, as well as ensuring we are adopting leading governance practices through building enduring partnerships with new and existing shareholders, we established the role of Senior Vice President, Governance. Among other things, the Senior Vice President, Governance is responsible for fostering greater transparency and communication with shareholders and improving our communication on all corporate governance matters.
Enhanced Shareholder Engagement
Consistent with our commitment to enhanced shareholder engagement, Barrick undertook a number of initiatives in 2017 to meet with, and facilitate feedback from, its shareholders. Highlights include the following:
- 2017 Operations and Technical Update: On February 22, 2017, Barrick hosted its first Operations and Technical Update, which was attended by a group of 544 significant shareholders and key analysts, and was broadcast via live video webcast for those unable to attend in person. Our Chief Innovation Officer and other senior executives and general managers of our core mines provided updates on Barrick’s key growth opportunities at our operations and projects, as well as our progress on digital transformation, innovation, and sustainability initiatives.
- Investor luncheon with independent directors: On November 17, 2017, J. Brett Harvey (Barrick’s Lead Director and Chair of the Compensation Committee), along with Graham G. Clow (member of the Risk Committee), Dambisa F. Moyo (member of the Audit Committee, Corporate Governance & Nominating Committee, and Risk Committee), and J. Robert S. Prichard (member of the Compensation Committee and Risk Committee) hosted Barrick’s second annual investor luncheon in New York City without management present, which was attended by shareholders representing approximately 19% of Barrick’s outstanding Common Shares. The purpose of the luncheon was to engage with investors and directly solicit their views on Barrick’s strategy, performance, governance initiatives, and approach to executive compensation.
- 2017 Sustainability Briefing and sustainability engagement: On May 9, 2017, Barrick hosted its first Sustainability Briefing for investors, which was broadcast via live video webcast for those unable to attend in person. Online attendees also had the ability to submit questions electronically. Speakers included Nancy H.O. Lockhart, Chair of the Corporate Responsibility Committee, along with our Chief Sustainability Officer and other leaders from across the organization. This session focused on Barrick’s commitment to responsible mining in partnership with host governments and communities in which we operate. During the fall of 2017, Barrick’s Chief Sustainability Officer conducted a series of engagements which included meetings with a number of key shareholders in Europe regarding environmental and social matters. Enhanced investor engagement on sustainability issues will continue in 2018 in other regions, including North America.
- Enhanced shareholder communication: Barrick established a designated Investor Relations hotline to supplement the existing email address. The hotline provides shareholders with improved access to the Company and facilitates shareholder engagement. Shareholders may communicate their views to management through the Company’s Investor Relations department at:
Attention: Investor Relations
Barrick Gold Corporation
TD Canada Trust Tower
161 Bay Street, Suite 3700
P.O. Box 212
Toronto, Ontario M5J 2S1
Phone: (416) 307-7474
In December 2017, Barrick was awarded the top prize at the 2017 Awards of Excellence in Corporate Reporting, given by the Chartered Professional Accountants of Canada. Barrick was the recipient of a Platinum Award, which is given to companies that demonstrate exemplary quality across all four judging categories, namely: financial reporting, corporate governance disclosure, electronic disclosure, and sustainability reporting.
Ongoing Board Renewal
The Board should represent a mosaic of skills and experience that are relevant to our business. We seek individuals who will serve as a voice for owners, by crafting policies to create long-term value per share and ensuring that the partnership successfully carries out those policies.
We have undertaken significant Board renewal over the past five years, which has increased the independence of the Board from just over 50% in 2013 to 87% today (assuming all nominees are elected). It has also strengthened the diversity of the experience and skills represented on the Board. Ten of our 15 nominated directors are new to the Board since April 2014. In all cases, our recent nominees bring with them specific and relevant experience to our business.
In furtherance of our commitment to ongoing Board renewal, our Corporate Governance & Nominating Committee has retained an independent advisor who has been tasked with identifying additional director nominees with a specific mandate to propose diverse candidates, particularly women.
This year, Patricia A. Hatter and María Ignacia Benítez have been nominated for election at the Meeting. Ms. Hatter and Ms. Benítez were identified after a rigorous search and selection process overseen by our Corporate Governance & Nominating Committee, which retained an independent search firm to identify diverse candidates for our Board, with particular expertise in digital technology and innovation and government affairs and environmental matters.
Ms. Hatter is a seasoned executive, with 22 years of leadership experience at Fortune 500 companies in the technology industry, as well as other sectors. She was most recently Senior Vice President and General Manager of Services for Intel/McAfee, where she was responsible for scaling the business to tackle complex cybersecurity challenges facing McAfee’s enterprise customers. Prior to that, Ms. Hatter served as the General Manager of Security and Software IT and Chief Information Officer at Intel Security Group and as Senior Vice President of Operations and Chief Information Officer at McAfee, Inc. Ms. Hatter is an award-winning technology leader, sought-after speaker, and member of the US Department of Commerce’s Information Security and Privacy Advisory Board. As a director of Barrick, Ms. Hatter will apply her skills and expertise to help guide the Company’s digital transformation, and the implementation of new technologies.
Ms. Benítez is a chemical engineer. She has extensive public and private sector experience, including as Minister of the Environment of Chile between 2010 and 2014. Ms. Benítez has developed a deep understanding of the environmental issues that arrive in the mining industry and, through her governmental experience, she brings with her an intimate understanding of the Chilean political, legal, and regulatory system. Ms. Benítez will be the Company’s first director with primary expertise in environmental management, and will provide invaluable knowledge from a region where Barrick has significant long-term interests, including the Pascua-Lama and Alturas projects, as well as the Norte Abierto joint venture. Her election will complement the 2017 appointment of our first director from Argentina, further enhancing the Company’s oversight and risk management capabilities in the region.
Since 2014, the Board has enhanced its technical and operating expertise by adding four directors with deep mining experience. Most recently, Pablo Marcet joined the Board in December 2016. Mr. Marcet is a seasoned mining professional with nearly 30 years of experience in the exploration, development, and operation of mines across Latin America and in East Africa. During his extensive career, Mr. Marcet has held senior management positions in geology, mining operations, and business development, including 15 years at BHP. Three of our other recent nominees also have deep mining experience. Graham G. Clow, a seasoned mine builder and operator with more than 40 years of experience across all technical aspects of the business, from exploration to mine closure, joined the Board in 2016. Mr. Clow’s experience is complemented by Ernie L. Thrasher, who joined the Board in 2014, and whose career in mining spans five decades. Mr. Thrasher began as a heavy equipment operator at a family-owned mining company in 1971 and went on to become the founder and CEO of a leading coal products supplier. Kelvin P.M. Dushnisky, President of Barrick, who joined the Board in 2016, has 30 years of international mining industry experience. Taken together, these four director nominees have nearly 150 years of experience in the mining industry.
Rounding out the skill set of our recent nominees, Nancy H.O. Lockhart brings strong leadership and expertise on environmental and social governance, Brian L. Greenspun is our first ever director from Nevada, a state that accounted for more than 45% of our gold production in 2017 and which will be critical to our future success, J. Michael Evans is among the world’s foremost experts on risk management, equity capital markets, and international finance, and J. Robert S. Prichard recently received the Fellowship Award from Canada’s Institute of Corporate Directors, one of the country’s highest honors for directors, recognizing excellence and leadership in the boardroom.
Director Search Process
We identify director candidates through a rigorous search and selection process overseen by our Corporate Governance & Nominating Committee and carried out in accordance with Barrick’s Diversity Policy. As required, Barrick retains an external search firm to identify potential candidates.
In 2017, the Corporate Governance & Nominating Committee retained an independent advisor to identify additional director candidates for our Board and gave the advisor a specific mandate to propose diverse candidates, particularly women. This process, which is ongoing, resulted in the nomination of Patricia A. Hatter and María Ignacia Benítez for election to the Board at the upcoming Meeting. See Our Commitment to Corporate Governance – Leading Corporate Governance Initiatives – Ongoing Board Renewal.
The Board believes that an enterprise-wide approach to risk management allows the Company to assess and mitigate risks most efficiently and effectively. The Board therefore expects management to:
- maintain a framework that ensures we manage and mitigate risk effectively and in a manner that creates the greatest value;
- integrate procedures for managing and mitigating risk into all our important decision-making processes so that we reduce the effect of uncertainty on achieving our objectives;
- ensure that the key controls we rely on to achieve the Company’s objectives are actively monitored so that they remain effective; and
- provide assurance to the executives and relevant Committees of the Board of Directors on the effectiveness of key control activities.
By simplifying our head office and eliminating management layers between it and the mines, we have accelerated the pace at which information flows between them. This nimble structure enhances our risk management processes by promoting faster information sharing and greater transparency. Risks facing the operations and organization more broadly are reviewed during the weekly Business Plan Review (BPR) meetings. The Investment Committee, as well as the Value Assurance Review (VAR) process which supports it, ensures that a high degree of consistency and rigor is applied to all capital allocation decisions based on a comprehensive understanding of risk and reward. The VAR process is a comprehensive technical peer review through which all projects are assessed prior to evaluation by the Investment Committee. During the VAR, in addition to review of all technical aspects of a project, options, risks, and opportunities are analyzed.
The Board and its Committees are responsible for overseeing the Company’s enterprise risk and internal control frameworks, risk management and major financial risks and financial reporting exposures, the alignment of Barrick’s executive compensation programs with strategic priorities, and the development of risk management programs relating to Barrick’s environmental, health and safety, corporate social responsibility, security, and human rights exposures. The Risk Committee assists the Board, among other things, in overseeing the Company’s management of enterprise risk as well as the implementation of policies and standards for monitoring and mitigating such risks. During 2017, we continued to improve the quality of risk information provided to the Risk Committee to ensure the Committee is provided with concise and relevant risk information that facilitates meaningful discussions about key risks facing the organization and how they are being managed. In-depth briefings are provided on specific topics to provide a more detailed understanding of risks, and management’s risk mitigation strategies, where appropriate. During 2017, in-depth briefings were provided to the Risk Committee on a range of topics including geopolitical risk, cybersecurity, tailings storage facility stewardship, and Barrick’s anti-corruption program. The Company’s risk management framework was also further enhanced through the implementation of a structured Critical Controls Management approach for material risks, which will continue in 2018.
With respect to climate matters, the Board’s Corporate Responsibility Committee meets at least quarterly and is responsible for overseeing Barrick’s policies, programs, and performance relating to climate change. Climate change is a risk that is assessed during the formal risk management process, the outputs of which are reviewed by the Risk Committee on a regular basis. The Audit Committee reviews the Company’s approach to climate change in the context of our disclosures.
At the management level, our Climate Change Committee is chaired by our Chief Sustainability Officer and is comprised of senior members of our management team including our Chief Innovation Officer; Chief Investment Officer; Executive Vice President and Chief Financial Officer; and Senior Vice President, Operational and Technical Excellence. Our Climate Change Committee provides strategic oversight and governance over key decisions related to Barrick’s climate change strategy, such as overseeing climate change risk and opportunities assessment, monitoring progress against greenhouse gas emissions targets, and providing guidance on external disclosures. In 2017, under the direction of the Climate Change Committee, we performed a climate change risk assessment to identify and assess risks and opportunities across potential regulatory, reputational, and physical risks related to climate change, considering both existing and emerging regulatory requirements (e.g., carbon tax, cap-and-trade) to limit greenhouse gas emissions. The Company has set a goal to keep its current greenhouse gas (GHG) emissions flat in the short-term and is targeting a 30 percent reduction in GHG emissions by 2030 from a 2016 baseline. Also in 2017, we affirmed our commitment to support the voluntary recommendations of the industry-led Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD) and will seek to implement the full recommendations of the TCFD over the next two years. For a more detailed description of our risk oversight processes, please see Risk Oversight.