Schedule A: Corporate Governance Disclosure
We aim to be the world’s most valued gold mining business by finding, developing and owning the best assets, with the best people, to deliver sustainable returns for our owners and partners. By treating our external partners’ interests as our own, we become the preferred partner of host governments and communities, the most sought-after employer among the world’s best talent, and the natural choice for the most thoughtful long-term investors. A partnership culture is Barrick’s most authentic, distinctive, and sustainable competitive advantage.
We have also made a partnership culture central to our distinctive structure for governance and management, one that is best suited to this moment in Barrick’s history.
In the section entitled “Our Governance and Leadership Structure” below, we explain in detail how our structure works and delineate clearly and specifically the responsibilities of our Board, our Executive Chairman, our Lead Director, and our President and Chief Executive Officer.
The Board works continuously and carefully to review and enhance our corporate governance policies and practices. These are consistent with the Canadian Securities Administrators’ National Policy 58-201 – Corporate Governance Guidelines, and they also take into account rules of the TSX (TSX Rules) and the NYSE (NYSE Standards), even though most of the NYSE Standards do not directly apply to us as a Canadian company. We have summarized below the significant difference between our corporate governance practices and the NYSE Standards which are applicable to U.S. companies:
- Section 303A.08 of the NYSE Standards requires shareholder approval of all “equity compensation plans” and material revisions. The definition of equity compensation plans under the NYSE Standards covers plans that provide for the delivery of newly issued securities, as well as plans that rely on securities reacquired on the market by the issuing company for the purpose of redistribution to employees and directors. In comparison, the TSX Rules require shareholder approval of security-based compensation arrangements only in respect of arrangements which involve the delivery of newly issued securities or specified amendments thereto. Therefore, Barrick does not seek shareholder approval for equity compensation plans and amendments unless they involve newly issued securities or constitute specified amendments under the TSX Rules.
Barrick’s corporate governance framework includes the mandates and key practices of the Board and its committees, position descriptions for our Executive Chairman, Lead Director, and President and Chief Executive Officer, as well as a set of Corporate Governance Guidelines available on our website at www.barrick.com/about/governance. Additional governance information is available on Barrick’s website, including our Code of Business Conduct and Ethics, and our Disclosure Policy. Detailed information on our committees of the Board (Audit & Risk, Compensation, and Corporate Governance & Nominating) can be found under the heading “Committees of the Board”.
Board Mandate and Responsibilities
Our Board serves as the voice of all owners by setting the Company’s policies and priorities in keeping with its purpose and values, and ensuring that management carries out those priorities to the highest possible standard. The Board has adopted a formal mandate which describes its major responsibilities, goals, and duties. The Board is satisfied that it is not constrained in its access to information, in its deliberations, or in its ability to satisfy its legal mandate to supervise the business and affairs of the Company, and that there are sufficient systems and procedures in place to enable the Board to function independently of management. In performing its role, our Board makes major policy decisions, participates in strategic planning, delegates to management the authority and responsibility for day-to-day affairs, and reviews management’s performance and effectiveness. The full text of the Board’s mandate is set out in Schedule B of this Circular. Since our last annual meeting, in connection with the Merger, the Board reviewed and updated its mandate.
The Board’s primary supervisory responsibilities are described below.
One of the Board’s major responsibilities is to review, with management, our strategic goals and objectives. Throughout the year, the Board reviews the Company’s operating plans and budgets, which take into account the opportunities and principal risks of our business. The Board is provided with regular updates on the implementation of our strategies, plans, and budgets and any regulatory, environmental, or social constraints that may impact the achievement of the Company’s business objectives. In 2018, in connection with its deliberations regarding the approval of the Merger, the Board also considered the other potential transactions and strategic options available to Barrick.
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 of 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.
Our distinctive and authentic partnership model reflects our belief that complex matters are better understood and managed by a team of partners working together, especially in assessing and reducing risk. Our lean, decentralized model has led to more collaboration, better decision-making, and faster communication and problem-solving. By further decentralizing our corporate office, we have accelerated the pace at which information flows between leadership and the mines. This nimble structure enhances our risk management processes by ensuring instant information sharing and greater transparency.
In late 2018, the weekly BPR meetings transitioned to a Weekly Executive Review which is now the main forum to raise and discuss risks facing our operations and organization more broadly. The Weekly Executive Review is held among the President and Chief Executive Officer and other key executives and other senior management, including our regional Chief Operating Officers. At regularly scheduled meetings, the Board and the Audit & Risk Committee are provided with updates on issues identified by management at these weekly sessions.
During 2018, we continued to improve the quality of risk information provided to the Risk Committee, including concise and relevant risk information that facilitates meaningful discussions about key risks facing the organization and how they are being managed. In-depth briefings were provided on specific topics to provide a more detailed understanding of risks, and management’s risk mitigation strategies, where appropriate. For example, during 2018, in-depth briefings were provided to the Risk Committee on a range of topics, including Barrick’s tailings storage facility stewardship program, Pascua-Lama, the Porgera earthquake, decentralization, Barrick’s insurance programs, integration risks related to the Merger, and talent management for mine general managers. Effective January 1, 2019, the duties and responsibilities of the Risk Committee were assumed by the Audit & Risk Committee, and the Risk Committee was dissolved. The Audit & Risk Committee will continue to hold these in-depth briefings and receive this enhanced quality of risk information going forward.
The Board oversees the Company’s enterprise risk and internal control frameworks principally through the Audit & Risk Committee, which is composed entirely of independent directors. The Audit & Risk Committee also oversees the design and execution of Barrick’s financial risk management programs. Through this Committee, the Board also oversees risk management of major financial risks and financial reporting exposures, as they relate to internal control over financial reporting. The Audit & Risk Committee also provides oversight over the Internal Audit function, which is responsible for providing assurance over the effective design and operation of internal controls related to key risk areas. Through the Compensation Committee, also composed entirely of independent directors, the Board oversees the alignment of Barrick’s executive compensation programs with strategic priorities, including programs implemented to manage risks related to compensation practices and mitigate undue risk-taking. Through the Corporate Governance & Nominating Committee, the Board oversees the development of risk management programs relating to Barrick’s environmental, health and safety, corporate social responsibility, security, and human rights exposures.
Barrick considers climate change, including shifts in temperature and precipitation and more frequent severe weather events, to be a company, community and global concern. Volatile climatic conditions can affect the stability and effectiveness of infrastructure and equipment; potentially impact environmental protection and site closure practices; lead to changes in the regulatory environment, including increased carbon tax regimes; and potentially impact the stability and cost of water and energy supplies.
In 2018, Barrick continued to implement the climate change strategy it developed in 2017, which is aligned with Barrick’s overall business strategy to grow free cash flow per share(1) through safe and responsible mining.
Barrick’s climate change strategy has three pillars:
- Understand and mitigate the risks associated with climate change. In 2018, climate change was incorporated into Barrick’s formal risk assessment process, whereby sites included climate related factors into their risk assessment process (e.g., by considering the impact of increased precipitation, drought, or severe storms on operations as well as on communities near our operations).
- Reduce Barrick’s impact on climate change. Mining is an energy-intensive business and we understand the important link between energy use and greenhouse gas emissions. By effectively managing our energy use, we can seek to reduce our draw from local energy grids, reduce greenhouse gas emissions, achieve more efficient production, and save direct mining costs. In 2018, a tangible example of this was the announcement of our plan to convert the Quisqueya I power generation facility in the Dominican Republic from heavy fuel oil to natural gas in 2019.
- Improve our disclosure on climate change. In 2018, we published our 2017/18 Climate report, which described our climate change strategy, identified climate-related risks and opportunities, and reported on emissions for all operating facilities and power plants. Publishing this report reflects our commitment to the voluntary disclosure of our emissions.
Governance over climate-related risks and opportunities is provided at both the Board and management level.
Prior to the completion of the Merger, the Corporate Responsibility Committee, which met quarterly, was responsible for overseeing Barrick’s policies, programs, and performance relating to the environment, including climate change. The Risk Committee assisted the Board in overseeing the Company’s management of enterprise risks as well as the implementation of policies and standards for monitoring and mitigating such risks. Climate change is built into Barrick’s formal risk management process, outputs of which were reviewed by the Risk Committee throughout 2018. In addition, the Audit Committee reviewed the Company’s approach to climate change in the context of Barrick’s public disclosure.
Following completion of the Merger and the changes to Board and committee composition, the Corporate Governance & Nominating Committee assumed the responsibilities of the Corporate Responsibility Committee with respect to its oversight of environmental matters, as described above, while the respective responsibilities of the Audit Committee and the Risk Committee prior to the Merger were assumed by the Audit & Risk Committee. In addition, Barrick reaffirmed its commitment to sustainability by establishing the E&S Committee. The E&S Committee is chaired by the President and Chief Executive Officer, and includes each of the regional Chief Operating Officers, Mine General Managers and health, safety, environment and closure leads, as well as the Group Sustainability Executive and an independent sustainability consultant. The E&S Committee meets each quarter to review the Company’s sustainability performance and compliance with its sustainability policies, as well as to identify concerns and opportunities at the Company’s operations at an early stage. The President and Chief Executive Officer reviews the reports of the E&S Committee with the Corporate Governance & Nominating Committee on a quarterly basis as part of the Committee’s mandate to oversee Barrick’s environmental, safety and health, corporate social responsibility, and human rights programs, policies and performance.
The diagram below summarizes our enterprise-wide approach to risk oversight and the allocation of risk oversight responsibilities.
- Free cash flow per share is a non-GAAP financial performance measure with no standardized definition under IFRS and therefore may not be comparable to similar measures presented by other companies. For further details regarding non-GAAP financial performance measures, please see “Other Information – Use of Non-GAAP Financial Performance Measures”.
Integrity of Internal Controls
The Board is responsible for overseeing the Company’s internal control environment. The Board exercises oversight of assurance activities designed to provide comfort on the effectiveness of internal controls principally through the Audit & Risk Committee. The Audit & Risk Committee regularly reviews reports from the head of the Company’s risk management and assurance group, as well as from our independent auditor, to assess the adequacy and effectiveness of our internal controls over financial reporting and disclosure controls and procedures, and other controls considered critical to the management of enterprise level risks.
Through the Audit & Risk Committee, the Board oversees assurance relating to accounting and financial reporting and external disclosure. The Audit & Risk Committee also reviews and recommends approval of our consolidated financial statements and other external reporting and audit requirements. At each of its meetings, the Audit & Risk Committee meets with the external auditor and the head of Barrick’s internal audit function as part of its regular in camera session. Through the Corporate Governance & Nominating Committee, the Board oversees assurance relating to our environmental, health and safety, corporate social responsibility, security, and human rights performance.
The Board believes that talent management and succession planning are critical to Barrick’s continued success. At each regularly scheduled Board meeting, the Board receives a Talent Report covering succession planning, recruitment, development considerations, and retention of senior leaders and individuals who have been identified as high-potential executives. This ensures that the Board is kept apprised of our pipeline of talent at all levels of the business. In addition, Barrick focuses on ensuring the development of its high potential partners and people through development moves to other positions, on-the-job mentoring and training, and internal and external courses. In addition, in 2018, the Board participated in an in-depth succession planning session to discuss and establish succession plans for key roles ranging from management at mine sites to members of the 2018 Executive Committee.
The Board reviews senior leadership succession, including for the Executive Chairman and the President and Chief Executive Officer. The succession plans are based on Barrick’s talent management systems that identify candidates who have the skills, experience, and leadership needed for progression to a senior leadership role. The Board is introduced to high-potential individuals in the Company. The Company also has in place an emergency succession plan to deal with a situation which requires the immediate replacement of the President and Chief Executive Officer.
In addition, the Board meets regularly with our senior partners through their participation in Board and Committee meetings and continuing education sessions. Our senior partners also participate in informal meetings with members of the Board throughout the year. This regular interaction with the Board ensures that directors get to know the individuals who have been identified as potential future leaders of the Company.
Evaluating Our Executive Chairman, President and Chief Executive Officer, and Other Senior Officers
Following the closing of the Merger, to reflect Barrick’s new governance structure, the Board approved new position descriptions and Committee mandates, including with respect to Barrick’s management evaluation processes.
The Lead Director works with the Executive Chairman to set the Executive Chairman’s objectives annually, which are then recommended to the entire Board for approval concurrently by the Corporate Governance & Nominating Committee and the Compensation Committee. Both Committees are composed entirely of independent directors.
The Corporate Governance & Nominating Committee, in consultation with the Lead Director, conducts an annual performance evaluation of the Executive Chairman against those objectives and provides a report on the performance evaluation to the Compensation Committee and the Board. The Compensation Committee recommends to the Board the Executive Chairman’s annual compensation. A more detailed description of the criteria and methodology used to assess the Executive Chairman’s performance and compensation awards in 2018 is set out in the “2018 Compensation of the Executive Chairman” section of this Circular.
The Executive Chairman conducts an annual performance evaluation of the President and Chief Executive Officer with input from the Lead Director and reports to the Board and the Compensation Committee, as appropriate, regarding such review. The Compensation Committee recommends to the Board the annual compensation of the President and Chief Executive Officer. The compensation of the Executive Chairman and President and Chief Executive Officer is approved by our independent directors. The Compensation Committee reviews and approves the annual compensation of the other senior officers based on the annual performance evaluation of such officers and the compensation recommendations provided by the President and Chief Executive Officer. The Compensation Committee bases its recommendations and approvals on Barrick’s established policies regarding the performance of each individual executive as measured against the annual performance incentive scorecard disclosed to shareholders in advance and on the performance of the Company as measured against the long-term company scorecard disclosed to shareholders in advance. Executive compensation is considered in the context of the overall stewardship and governance of the Company. A more detailed description of the criteria and methodology used to assess performance and determine the compensation of our former President and other senior officers prior to the closing of the Merger is set out in the “2018 Compensation of our Named Partners” section of this Circular.
Communications and Shareholder Engagement
We maintain a Disclosure Policy that enshrines our commitment to providing timely, factual, and accurate disclosure of material information about the Company to our shareholders, the financial community, and the public. The Company has adopted disclosure practices that ensure material information is not disclosed to investors, analysts, or others selectively in contravention of applicable securities laws. Any communications or meetings with our shareholders or others will comply with those disclosure practices. The Board reviews and approves the contents of major disclosure documents, including our Annual Report, quarterly reports to shareholders, Annual Information Form, and Circular. A copy of our Disclosure Policy is available on our website at www.barrick.com/about/governance.
Communications regarding our business and operations, financial results, and strategy are provided by senior management periodically throughout the year in many ways, including our annual and quarterly reports, Annual Information Form, Sustainability Report, news releases, and through industry and investor conferences and meetings with analysts and investors. Management also hosts conference calls and webcasts for quarterly earnings releases and major corporate developments as soon as practical after they are publicly announced. These disclosure documents, investor presentations, conference calls, and webcasts are available through our website at www.barrick.com/investors.
As part of our effort to promote improved shareholder engagement, the Board adopted a formal Shareholder Engagement Policy to facilitate an open dialogue and exchange of ideas between the Company, our Board, and our shareholders. The Shareholder Engagement Policy is available on our website at www.barrick.com/about/governance. We also established the role of Senior Vice-President, Governance to foster greater transparency and communication with shareholders and to improve our communication on all corporate governance matters. As we did last year, Barrick is holding a hybrid (physical/virtual) annual meeting which can be attended in person or, in the case of registered shareholders, through an online video portal which allows them to ask questions of the Board and management and vote their Barrick Shares through the LUMI meeting platform. More information can be found in “Meeting and Voting Information – Voting Procedures”.
Shareholders can contact the Executive Chairman by mail (marking the envelope “Confidential”) or email at:
Attention: Executive Chairman
Barrick Gold Corporation
TD Canada Trust Tower
161 Bay Street, Suite 3700
P.O. Box 212
Toronto, Ontario M5J 2S1
Shareholders can contact independent directors by mail (marking the envelope “Confidential”) or email at:
Attention: Lead Director
Barrick Gold Corporation
TD Canada Trust Tower
161 Bay Street, Suite 3700
P.O. Box 212
Toronto, Ontario M5J 2S1
Shareholders can contact the President and Chief Executive Officer by mail or email at:
Attention: President and Chief Executive Officer
Barrick Gold Corporation
TD Canada Trust Tower
161 Bay Street, Suite 3700
P.O. Box 212
Toronto, Ontario M5J 2S1
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
Our Governance and Leadership Structure
We have consciously established a distinctive structure for the governance and management of Barrick. In this section, we lay out the responsibilities of our Board, our Executive Chairman, our President and Chief Executive Officer, and our Lead Director, and we explain how they work together. We also explain why we continue to believe this is the right structure for Barrick at this time.
Under our Executive Chairman’s stewardship, five years ago Barrick undertook a “Back to the Future” strategy to recapture and make relevant the original, authentic DNA of this company as it existed when Peter Munk and his partners created it. Specifically, the phrase referred to re-establishing four core elements: one, a partnership culture; two, a lean, nimble, decentralized business model; three, an intensive focus on creating long-term value as measured by free cash flow per share; and four, financial rigor and prudence as evidenced by discerning portfolio management and a healthy balance sheet. Today, the Company has embraced and executed on each of these elements.
We have continued to advance the implementation of our decentralized operating model, reallocating roles to operations where appropriate, and eliminating those roles that are no longer required. The corporate office sets strategy and allocates people and capital according to the Company’s strategic priorities. Regional Chief Operating Officers determine how best to maximize the long-term value of their business, with advice and assistance from corporate office experts. Those regional leaders work side-by-side with our regional teams to maintain and enhance our license to operate, building partnerships of depth with host governments and communities. This lean, decentralized model allows information to flow freely and swiftly throughout the organization, and ensures that problems are solved quickly by the people closest to them. It also empowers our partners to work together as a team to understand and manage the complex matters of our business, and assess and reduce risk.
Having re-established the model that drove Barrick’s early success, our ambition is to become the world’s most valuable mining business. We are cultivating a high-performance culture defined by the following principles: a deep commitment to partnership; consistent high-level execution; operational excellence; disciplined capital allocation; and continual self-improvement. We are obsessed with talent, and seek out fresh perspectives from other industries, challenging ourselves to think differently. We are investing in digital technology in a disciplined manner to make us faster, safer, more efficient, and more transparent with our partners. Our Board of Directors serves as the voice of all owners. It sets the Company’s strategic priorities in keeping with our purpose and values. The Executive Chairman is a meaningful owner himself and serves as the representative of the Board and the owners. He ensures that the strategic priorities set by the Board are executed to the highest possible standard.
Board of Directors
In carrying out its oversight function, our Board of Directors, as the voice of all owners, reviews with management and sets the Company’s priorities in keeping with our purpose and values.
Our priorities are executed by our partnership, created in early 2015. As at March 28, 2019, we have 40 partners, 14 of whom are executive officers. Partners are individuals who consistently demonstrate the highest qualities of transformational leadership: a tireless dedication to Barrick’s values, the pursuit of excellence and innovation, and a capacity to motivate and inspire others. Our partners approach their work with a balance of boldness and prudence: acting with urgency, but also with discipline and care. Our partners are owners of the Company, and rise and fall together with shareholders. A significant portion of their total compensation is long-term in nature, in the form of PGSUs which convert to Barrick Shares that cannot be sold until a partner retires or leaves the Company. Ongoing membership is contingent upon superior performance and leadership, and underperforming partners will be removed.
President and Chief Executive Officer
The President and Chief Executive Officer is appointed by the Board and reports to the Executive Chairman. The President and Chief Executive Officer has overall responsibility, subject to the oversight of the Executive Chairman and the Board, for managing the Company’s business on a day-to-day basis, for general supervision of the business of the Company and the execution of the Company’s operating plans and, working with the Executive Chairman, execution of the Company’s strategic priorities. In fulfilling his executive role, the President and Chief Executive Officer acts within the authority delegated to him by the Executive Chairman and the Board. Among other things, the President and Chief Executive Officer also: (i) monitors operational performance and the strategic direction of the Company, (ii) manages the Company’s internal control framework, (iii) develops appropriate capital, corporate and management structures to ensure the Company’s objectives are met, and (iv) reports to the Executive Chairman and the Board on the progress being made by the Company towards its strategic objectives, along with the Company’s short-, medium-, and long-term plan.
The Executive Chairman is appointed by the Board and, as his primary functions, provides leadership and direction to the Board, facilitates the operations and deliberations of the Board and the satisfaction of the Board’s functions and responsibilities under its mandate, and assumes responsibility for the strategic initiatives of Barrick. In addition to the responsibilities applicable to all other directors, the Executive Chairman’s responsibilities include, among other things, (i) working with the Board and the President and Chief Executive Officer to develop the strategy for the Company’s future growth; (ii) working with the President and Chief Executive Officer to identify opportunities for value-enhancing strategic initiatives including acquisitions, joint ventures, and strategically important relationships, as well as the disposition from time to time of non-core assets; (iii) taking the lead in developing and maintaining the Company’s relationships with future strategic partners and investors whose capital, influence and knowledge could add significantly to the Company’s value and its share price; (iv) working with members of Barrick’s International Advisory Board and the President and Chief Executive Officer to expand and deepen Barrick’s relationships with heads of state, chief executives of global sovereign wealth funds, and other senior officials and stakeholders in countries of critical importance to Barrick; and (v) working with the President and Chief Executive Officer and senior executives on critical issues related to government relationships and strategic alliances.
In connection with his leadership and direction of the Board, the Executive Chairman chairs each meeting of the Board and works in consultation with the Lead Director to, among other things, plan and organize the activities of the Board. Together with the Lead Director, the Executive Chairman ensures that the Board has all the information it needs to function effectively, at all times, including, as necessary, communication between Board meetings. The Executive Chairman serves as the principal liaison between the Board and the Executive Committee and meets with representatives of our shareholders and other partners on behalf of the Board. The Executive Chairman is also responsible for conducting an annual performance evaluation of our President and Chief Executive Officer with input from the Lead Director.
Because the Executive Chairman is not an independent director, the independent directors elect an independent director to serve as Lead Director following each annual meeting. The Lead Director provides leadership to the Board and particularly to the independent directors. The Lead Director facilitates the functioning of the Board independently of management, serves as an independent leadership contact for directors and shareholders, and assists in maintaining and enhancing the quality of the Company’s corporate governance. In early 2016, the Corporate Governance & Nominating Committee conducted its annual review and assessment of our Lead Director position description. Following that process, our Corporate Governance & Nominating Committee recommended, and our Board adopted, an enhanced Lead Director position description, which augments the Lead Director’s already robust role. Among other things, the Lead Director’s authority and responsibilities include the following:
- Consulting with the Executive Chairman regarding the agenda and ultimately approving the agenda (including additions to the agenda) and associated materials for each Board meeting;
- Approving Board meeting schedules to ensure that there is sufficient time for discussion of all agenda items;
- Chairing Board meetings when the Executive Chairman is absent or in circumstances where the Executive Chairman is (or may be perceived to be) conflicted;
- Presiding over in camera sessions of the independent directors following every Board meeting;
- Calling meetings of the independent directors, or the Board, as required;
- Briefing the Executive Chairman on decisions reached or suggestions made at meetings of independent directors, or during in camera sessions;
- Facilitating communication between the independent directors and the Executive Chairman, including by presenting the Executive Chairman’s views, concerns, and issues to such directors and raising with the Executive Chairman, as appropriate, the views, concerns and issues raised by such directors;
- Engaging with the Executive Chairman between Board meetings and assisting with informing or engaging with independent directors;
- Overseeing the annual Board and directors evaluation process;
- Engaging with each director individually regarding the performance and functioning of the Board, its committees, and other evaluation matters, as appropriate, and inquiring as to whether any director has concerns about the nomination of other directors;
- Providing input in respect of the Executive Chairman’s annual performance evaluation of the President and Chief Executive Officer;
- Consulting with the Corporate Governance & Nominating Committee in its performance evaluation of the Executive Chairman;
- Providing leadership to the Board if circumstances arise in which the Executive Chairman may be (or may be perceived to be) in conflict, in responding to any reported conflicts of interest, or potential conflicts of interest, arising for any director;
- Being available for consultation and direct communication with shareholders and other key constituents, as appropriate; and
- Retaining independent advisors on behalf of the Board as the Board or the independent directors may deem necessary or appropriate.
J. Brett Harvey has served as our Lead Director since December 2013 and was the Chairman of Barrick’s Compensation Committee from July 2012 to December 31, 2018. In 2018, Mr. Harvey played a fundamental role as our Lead Director in a number of key Board initiatives, including consulting with the Executive Chairman regarding the agenda and associated materials for all Board meetings, chairing all meetings of the independent directors that occurred throughout the year, facilitating communication between the independent directors and the Executive Chairman, consulting with the Corporate Governance & Nominating Committee in evaluating the Executive Chairman’s 2018 performance and, in consultation with the Executive Chairman, setting the Executive Chairman’s performance objectives for 2019. The Board has adopted position descriptions for the Executive Chairman, the Lead Director, and the President and Chief Executive Officer. A copy of these position descriptions can be found on our website at www.barrick.com/about/governance. Each Board committee mandate also sets out the role and responsibilities of its committee chair.
The Board believes that Barrick’s current governance and leadership structure is vital to completing Barrick’s positive transformation. In particular, we believe that our Executive Chairman plays a critical role in ensuring that our partnership continues to execute on the ambitious goals we have set for ourselves for the benefit of all stakeholders. The Board believes it is functioning effectively under its current structure, and that the current structure, including a board that is 75% independent and a robust Lead Director position, provides appropriate oversight protections.
Through the Corporate Governance & Nominating Committee, which is composed entirely of independent directors, the Board monitors best practices in corporate governance, develops corporate governance guidelines, and establishes appropriate structures and policies to allow the Board to function effectively and independently of management. The Corporate Governance & Nominating Committee recommends corporate governance policy changes to the Board as appropriate, and the Board approves our corporate governance guidelines annually.
Board Composition and Nomination of Directors
Shareholders elect directors annually to hold office until our next annual meeting or until their successors are elected or appointed. Shareholders vote for individual directors. Between shareholder meetings, the Board may appoint additional directors within the maximum number set out in the Articles of the Company and provided that the number of additional directors appointed cannot exceed one-third of the current directors who were not appointed as additional directors. The Articles of the Company provide for a minimum of five and a maximum of 20 directors.
The Corporate Governance & Nominating Committee is charged with identifying and reviewing potential candidates and recommending nominees to the Board for approval. The Corporate Governance & Nominating Committee strives to ensure that the Board possesses a broad range of experience and expertise so that it can effectively carry out its mandate and be an asset to the Company, both as a whole and through its three standing committees. To promote this objective, the Corporate Governance & Nominating Committee oversees a process by which the areas of experience and expertise that the Board needs over the medium-term are identified.
The table below shows those areas of experience and expertise and indicates the primary areas that the director nominees bring to our Board.
|Health, Safety, and Environmental|
|Capital Allocation & Financial Acumen|
|Talent Development and Allocation & Partnership Culture|
|International Business Experience and Global Partnerships|
|Governmental and Regulatory Affairs & Community Relations|
Descriptions of Areas of Experience and Expertise
- Mining Operations: Experience at a senior level with mining operations including production, exploration, reserves, capital projects, and related technology. Familiarity with setting performance expectations, driving continuous improvement through Best-in-Class operational standards, building operational leadership capabilities, and fostering innovation.
- Health, Safety & Environmental: Knowledge of, or experience with, leading health, safety, and environmental practices and related requirements, including sustainable development and corporate responsibility practices and reporting.
- Capital Allocation & Financial Acumen: Experience overseeing the allocation of capital to ensure superior risk-adjusted financial returns, including strengthening our capital structure, evaluating capital investment decisions, setting and enforcing thresholds for financial returns, optimizing asset portfolios, and knowledge of, or experience with, financial accounting and corporate finance.
- Talent Development and Allocation & Partnership Culture: Thorough understanding of the key processes to ensure optimal human capital allocation including attracting, motivating, and retaining top talent. Familiarity with partnership structures and their related cultures. Experience in areas such as setting performance objectives, designing compensation plans, ensuring the right people are in the right roles, succession planning, and organizational design.
- M&A Execution: Experience in evaluating and executing mergers, acquisitions, and asset sales, including the formation of partnerships and joint ventures across the globe.
- International Business Experience and Global Partnerships: Experience conducting business internationally, including exposure to a range of political, cultural, and regulatory environments. Familiarity with the critical role of partnerships with host governments, local communities, indigenous people, non-governmental organizations, and other stakeholders, and an understanding of how to establish and strengthen those partnerships.
- Government and Regulatory Affairs & Community Relations: Experience with the workings of government and public and regulatory policy in Canada, the United States, and internationally. Familiarity with community engagement.
- Risk Management: Knowledge of risk management principles and practices, an understanding of some or all of the major risk areas that the Company faces, and an ability to probe risk controls and exposures.
We believe our Board nominees must strike the right balance between those who have the skills and experience necessary to ensure our business can secure and maintain our license to operate, and those who have technical and operating expertise and financial and business acumen. Based on their assessment of the existing experience and strengths of the Board and the needs of the organization, the Corporate Governance & Nominating Committee and the Board determine the competencies, skills, and qualities they should seek in new Board members. In recommending nominees, the Corporate Governance & Nominating Committee assesses the ability to contribute to the effective management of the Company, taking into account the needs of the Company and the individual’s background, experience, perspective, skills, and knowledge that are appropriate and beneficial to the Company. Consistent with Barrick’s Diversity Policy, the Committee and the Board also consider diversity criteria, such as gender, age, and ethnicity.
Nominees for membership to the Board are recommended to the Board by the Corporate Governance & Nominating Committee. In identifying candidates, the Committee consults broadly with the other members of the Board and retains external consultants to assist with sourcing the best available candidates and/or consult with key stakeholders. Throughout the director nomination process, the Committee provides updates to the Board and solicits input on candidates. New candidates are interviewed by members of the Committee and other directors as appropriate. The Committee ultimately submits recommendations on Board composition to the full Board, which approves the nominees for submission to shareholders and election to the Board.
Following the merger of Barrick and Randgold, which became effective on January 1, 2019, Barrick’s Board was reconstituted with nine directors, two-thirds of whom were appointed by Barrick and one-third of whom were appointed by Randgold. Regrettably, on February 28, 2019, shortly before this Circular was finalized, Ms. María Ignacia Benítez, an independent director of Barrick since April 2018, passed away. Due to the passing of María Ignacia Benítez, this Circular does not include a female director Board nominee. While this unfortunate and untimely event has set back our pursuit of greater gender diversity, the Corporate Governance & Nominating Committee is now actively looking for an equally compelling and qualified female candidate to appoint to the Board. As a result of the passing of Ms. Benítez, Barrick’s Board now consists of eight directors, each of whom is nominated for election at the Meeting. Our new Board includes international business leaders and mining industry professionals with expertise and experience working in all the jurisdictions in which Barrick now operates. The new Board also leverages the experience and knowledge of both Barrick and Randgold to facilitate a seamless and effective transition at the newly merged company. Our newly reconstituted Board brings together diverse viewpoints and perspectives, and exhibits the skills, professional experience, and backgrounds necessary to best address the opportunities, challenges, and risks of our business.
Expectations of Directors
The Board has adopted Corporate Governance Guidelines to promote the effective functioning of the Board and its committees. These Guidelines set out how the Board should manage its affairs and perform its responsibilities. Among other things, the Guidelines establish a minimum attendance expectation for directors of 75% of all Board and committee meetings, subject to extenuating circumstances, a minimum share ownership requirement for directors, and a requirement that directors make every reasonable effort to attend our annual meeting of shareholders.
Majority Voting Policy
The Company has adopted a majority voting policy as part of its Corporate Governance Guidelines, which are available on our website at www.barrick.com/about/governance. The majority voting policy provides that 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 must promptly tender his or her resignation to the Executive Chairman or, in the case of the Executive Chairman, to the Lead Director. Any such resignation will take effect on acceptance by the Board. This policy applies only to uncontested elections of directors where the number of nominees is equal to the number of directors to be elected.
The Corporate Governance & Nominating Committee will expeditiously consider the director’s offer to resign and make a recommendation to the Board on whether it should be accepted, provided that the Board must accept the resignation absent exceptional circumstances. The Board will have 90 days to make a final decision and will announce its determination by way of press release, a copy of which will be provided to the TSX in accordance with Barrick’s standard procedure. The director will not participate in any Committee or Board deliberations on their resignation offer. If a resignation is accepted, the Board may appoint a new director to fill the vacancy.
Barrick does not impose term limits on its directors and does not have a retirement age policy for directors as the Board believes that term limits and mandatory retirement are arbitrary mechanisms for removing directors which can result in valuable, experienced directors being forced to leave the Board solely because of length of service or age. Instead, we believe that directors should be assessed based on their ability to continue to make a meaningful contribution. Barrick’s annual performance review of directors assesses the strengths and weaknesses of directors and the contributions they make. In our view, this is a more meaningful way to evaluate the performance of directors and to make determinations about whether a director should be removed due to under-performance. See “Annual Performance Assessments”.
The Board believes that it must be independent of management to be effective. The Board has adopted director independence standards consistent with the NYSE Standards and National Instrument 58-101 – Disclosure of Corporate Governance Practices and has adopted a policy that requires at least two-thirds of our directors to be independent. To be considered “independent”, the Board must make an affirmative determination, by resolution, that the director being reviewed has no material relationship with the Company other than as a director, either directly or indirectly (such as a partner, shareholder, or officer of another entity that has a material relationship with the Company) that could reasonably be expected to interfere with the director’s ability to exercise independent judgment as a director. In each case, the Board broadly considers all relevant facts and circumstances. The threshold for independence is higher for members of the Audit & Risk Committee, as required by Canadian Security Administrators’ National Instrument 52-110 – Audit Committees and the NYSE Standards. All members of the Audit & Risk Committee meet the additional Canadian and U.S. independence requirements for membership on public company audit committees.
Generally, a director will not be considered to be “independent” if:
- the director is, or has been within the last three years, employed by the Company or any of its subsidiaries;
- an immediate family member of the director is, or has been within the last three years, employed by the Company as an executive officer;
- the director, or an immediate family member, is a current partner of a firm that is the Company’s internal or external auditor;
- the director, or an immediate family member, has been within the last three years (but is no longer) a partner or employee of the Company’s internal or external auditor and personally worked on the Company’s audit within that time;
- the director is a current employee of the Company’s internal or external auditor;
- an immediate family member of the director is a current employee of the Company’s internal or external auditor and that person participates in the firm’s audit, assurance, or tax compliance (but not tax planning) practice;
- a director, or an immediate family member, received more than Cdn $75,000 in direct compensation from the Company during any 12-month period within the last three years, other than director and committee fees and pensions or other forms of deferred compensation, so long as such compensation is not contingent on continued service;
- a director, or an immediate family member, is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s current executives serve or served at that time on the company’s compensation committee; or
- a director, or an immediate family member, is an executive officer or an employee of a company that has made payments to, or received payments from, the Company for property or services in an amount that exceeds in any of the last three fiscal years $1,000,000 or 2% of that company’s consolidated gross revenues, whichever is greater.
An “immediate family member” includes a director’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone (other than domestic employees) who shares such director’s home. A director’s service as an executive officer of a not-for-profit organization will not impair his or her independence if, within the preceding three years, the Company’s charitable contributions to the organization in any single fiscal year, in the aggregate, do not exceed the greater of $1,000,000 or 2% of that organization’s latest publicly available consolidated gross revenues. With the assistance of the Corporate Governance & Nominating Committee, the Board has considered the relationship to Barrick of each of the director nominees and has determined that six of the eight individuals nominated for election as directors at the Meeting are independent as shown in the following table.
|Name||Executive Officer||Independent||Not Independent||Reason for Lack of Independence|
|Mark Bristow||President and Chief Executive Officer of the Company|
|Gustavo A. Cisneros|
|Christopher L. Coleman|
|J. Michael Evans|
|Brian L. Greenspun|
|J. Brett Harvey|
|Andrew J. Quinn|
|John L. Thornton||Executive Chairman of the Company|
Outside Board Memberships and Interlocking Board Positions
The Board has not adopted guidelines setting the specific number of other boards and committees on which a director may serve. The Company’s Corporate Governance Guidelines provide that directors should recognize that Board and committee service requires significant time and attention in order to properly discharge their responsibilities, and that service on boards or committees of other organizations should be consistent with the Company’s conflict of interest standards as set out in our Code of Business Conduct and Ethics.
The Board has adopted guidelines limiting the number of board interlocks that can exist at any time to two, and prohibiting 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. As of March 28, 2019, there are no board interlocks on our Board.
Other Independence Mechanisms
The Board has established other important governance policies and practices to enhance Board independence, including the following:
- Each committee mandate provides that the committee may engage external advisors at Barrick’s expense.
- To facilitate open and candid discussion among our directors, 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; and
- the Lead Director presides at each of these sessions.
In 2015, consistent with its commitment to diversity on the Board and in senior leadership positions, Barrick adopted a written diversity policy. The policy does not establish any fixed targets regarding the representation of women on the Board or in senior leadership, including executive officer, positions because the Board does not believe that targets necessarily result in the identification or selection of the best candidates for Barrick’s highly specialized business. In addition, appointments of directors and senior leadership should be made, and should be perceived as being made, on the merits of the individuals, and having a fixed target could impede the application of this principle. Instead, the policy articulates the Company’s desire to promote better corporate governance and performance and effective decision-making by having a diverse range of views and considerations represented at the Board and senior leadership levels. In considering directors for election to the Board, the policy requires the Board and the Corporate Governance & Nominating Committee to consider diversity criteria more generally, such as age, ethnicity, and geographical and industry background. The policy requires similar considerations to be taken into account by the Board, the Executive Chairman, and the President and Chief Executive Officer in making senior leadership appointments. In addition, the Company’s diversity policy requires the Corporate Governance & Nominating Committee to consider and recommend, where appropriate, the implementation of initiatives to promote gender diversity at the Board and senior leadership levels. In particular, in order to improve the representation of women on the Board, the diversity policy specifically requires the Corporate Governance & Nominating Committee, when identifying and considering the selection of candidates for election or re-election to the Board, to consider the level of representation of women on the Board. Similarly, the diversity policy requires the Board, the Executive Chairman, and the President and Chief Executive Officer, when identifying and considering candidates for senior leadership positions, to consider the level of representation of women in senior leadership positions.
Every year, the Corporate Governance & Nominating Committee reviews the diversity policy and assesses the Company’s progress against its objectives. This review will enable the Corporate Governance & Nominating Committee, on an ongoing basis, to assess the effectiveness of the diversity policy. The results of the Corporate Governance & Nominating Committee’s assessment are set out below under the heading “Diversity Policy Assessment”.
Following the merger of Barrick and Randgold, which became effective on January 1, 2019, Barrick’s Board was reconstituted with nine directors, two-thirds of whom were appointed by Barrick and one-third of whom were appointed by Randgold. Regrettably, on February 28, 2019, shortly before this Circular was finalized, Ms. María Ignacia Benítez, an independent director of Barrick since April 2018, passed away. While this unfortunate and untimely event has set back our pursuit of greater gender diversity, the Corporate Governance & Nominating Committee is now actively looking for an equally compelling and qualified female candidate to appoint to the Board. As a result of the passing of Ms. Benítez, Barrick’s Board now consists of eight directors, each of whom is nominated for election at the Meeting. Our new Board includes international business leaders and mining industry professionals with expertise and experience working in all the jurisdictions in which Barrick now operates. The new Board also leverages the experience and knowledge of both Barrick and Randgold to facilitate a more seamless and effective transition at the newly merged company. Our newly reconstituted Board brings together diverse viewpoints and perspectives, and exhibits the skills, professional experience, and backgrounds necessary to best address the opportunities, challenges, and risks of our business.
As part of the identification and selection process for potential candidates for the Board, the Corporate Governance & Nominating Committee is mindful of the benefit of diversity on the Board and the need to maximize the effectiveness of the Board and its decision-making abilities. Gender diversity is only one element of diversity that the Board considers important. The Corporate Governance & Nominating Committee considers several aspects of diversity within the context of the Company’s needs and objectives and its domestic and international operations, including each candidate’s background and experience, expertise, geographical representation, ethnicity, cultural background, disability, and age, as well as gender. The current Board members range in age from 50 to 73 years and have experience conducting business and operating in the very geographic regions where Barrick operates. In addition, our Board nominees possess a range of expertise and knowledge garnered through experiences in a broad range of industries, including mining, finance, real estate, media, government, oil and gas, and transportation. Accordingly, in searches for new directors, the Corporate Governance & Nominating Committee considers the level of female representation on the Board, along with ways in which diversity can be increased in other areas.
Senior Leadership Diversity
In addition to Board diversity, Barrick understands the benefits of a diversified workforce. While Barrick does not have a fixed target for the representation of women in executive officer positions, under its diversity policy Barrick is committed to promoting diversity (including gender diversity) among its senior leadership and will consider the level of female representation and the other indicia of diversity, outlined above, when deliberating on hires and promotions regarding all senior leadership positions, including executive officers.
In identifying and considering potential candidates for senior leadership, including executive officer appointments, the Board considers factors such as years of service, regional background, merit, experience, and qualifications. In addition, unlike the identification and selection process for the Board, the diversity of the Company’s senior leadership is driven by other factors, some of which are outside of the control of the Company, including the level of staff turnover, the times at which hiring and promotion opportunities arise, and the available pipeline of staff.
As of March 28, 2019, there are six women in vice-president roles at Barrick, comprising 15% of the Company’s vice-president group, and three of the Company’s executive officers are women (21%). Women comprise 13% of our Partners.
Diversity Policy Assessment
The Corporate Governance & Nominating Committee conducted an assessment of the diversity policy by comparing the diversity characteristics and profiles of the Board and executive team as of February 2019, relative to February 2018. The profile of the Board continues to represent a broad range of geographies, age groups, education, and experience. As noted above, Ms. María Ignacia Benítez regrettably passed away on February 28, 2019. At the date of this Circular, the search for an equally compelling female candidate to fill the position left vacant by Ms. Benítez was ongoing. Over time, as Barrick makes further changes to its Board, it will look to increase the Board’s diversity with a particular emphasis on adding additional women.
In 2019, the Board confirmed the appointments of three female partners to our Executive Committee. As of March 28, 2019, the percentage of female executive officers is 21% (i.e., 3 out of 14). The Company’s Human Resources function ensures that diverse candidates are considered for all executive roles and that when independent advisors are retained, they are instructed to present a diverse list of candidates. Since November 2016, Barrick has been a member of the 30% Club Canada, an organization that works with the business community to achieve better gender balance on the boards and senior leadership of Canadian companies. Like Barrick, the 30% Club Canada does not believe that setting mandatory quotas is the right approach to achieving greater gender balance. Rather, the organization, whose name comes from its aspirational goal for 30% of Canadian board seats to be held by women by 2022, is focused on building a strong foundation of business leaders who are committed to meaningful and sustainable gender balance in business leadership. Barrick supports this important objective. In furtherance of this objective, 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.
Ethical Business Conduct
Code of Business Conduct and Ethics
The Company has adopted a Code of Business Conduct and Ethics (the Code) that applies to all of our directors, officers, employees, contract employees, and third-party vendors. In 2017, the Code was revised and updated to make it less formal, more closely connected to our core values, and more user friendly by incorporating clear examples and a section of frequently asked questions. The Code embodies our commitment to conduct our business in accordance with the highest ethical standards and all applicable laws and regulations, industry practices, and international norms. The Code sets out fundamental principles that guide the Board in its deliberations and shape the Company’s business activities. The Code addresses, among other things:
- compliance with laws, including laws prohibiting bribery and corruption;
- respect for human rights;
- accurate financial controls and records;
- avoidance of conflicts of interest;
- protection and proper use of Company assets;
- confidentiality of information;
- insider trading and non-disclosure of material, non-public information;
- fairness in all our dealings;
- health and safety in the workplace;
- dignity and respect within working relationships; and
- sound environmental practices.
The Code also deals with the reporting of potential violations of law and the Code. Barrick has established a toll-free compliance hotline and Internet web portal to allow for anonymous reporting of any suspected Code violations, including concerns regarding accounting, internal accounting controls, or other auditing matters. The Company encourages and expects our personnel to raise possible ethical issues and will not tolerate retaliatory action against any individual for raising, in good faith, concerns or questions regarding ethics or Code matters. Any waivers of the Code may generally only be granted by the President and Chief Executive Officer or the General Counsel. However, any waiver of the Code for executive officers may only be granted by the Board or a committee thereof, and will be disclosed to shareholders as required by applicable laws. To date, no waivers of our Code have been granted.
The Code was developed in consultation with the Corporate Governance & Nominating Committee. The Board monitors compliance with the Code through the Audit & Risk Committee, which receives periodic reports from management with respect to any reports of alleged violations of the Code and any corrective actions taken by the Company. Once each year, employees may be required to complete an acknowledgment confirming that they:
- have received Code training;
- understand and agree to abide by the requirements of the Code; and
- are not aware of any potential misconduct under the Code that has not been reported to appropriate Company management.
The Company has also implemented an online component to its Code training programs. This training provides employees with real-time training and testing and supplements the Company’s other training programs and annual certification process.
Conflict of Interest
In addition to the independence requirements described above, our Code, our Corporate Governance Guidelines, and the BCBCA specifically address conflicts of interest involving directors. Pursuant to the Code, all of our directors are required to act in the best interests of the Company and to avoid conflicts of interest. Directors may not use their position to obtain any improper benefit for themselves. Our directors may not serve as officers or directors of, or otherwise be engaged with, a competitor or potential or actual business partner of the Company without the prior written approval of the Executive Chairman and the Chair of the Corporate Governance & Nominating Committee.
Our Corporate Governance Guidelines provide that directors are required to advise the Executive Chairman and the Chair of the Corporate Governance & Nominating Committee prior to accepting a directorship of another public company or of any actual or potential competitor, business partner, or significant investor in the Company and to ensure that such service is consistent with Barrick’s conflict of interest standards.
Division 3 of Part 5 of the BCBCA addresses conflicts of interest of a director of a British Columbia company, such as Barrick. Among other things, the BCBCA provides that a director of a corporation who: (a) has a material interest in a material contract or transaction or proposed material contract or transaction with the corporation; or (b) is a director or an officer of, or has a material interest in, any person who has a material interest in a material contract or transaction or proposed material contract or transaction with the corporation, is required to disclose that interest. Disclosure must be in writing to the directors, must include the nature and extent of the disclosable interest and must be evidenced in a consent resolution, the minutes of a meeting or any other record deposited in the company’s records office. If a director has a disclosable interest in a contract or transaction proposed to be entered into with Barrick, the director may not vote on any resolution to approve the contract or transaction. The director is, however, entitled to be counted in the quorum for the Board meeting. The BCBCA contains a number of exemptions for particular situations, including certain contracts or transactions with wholly-owned subsidiaries, a contract of indemnity or insurance for the director, and contracts or transactions relating to the remuneration of the director in his or her capacity as a director, officer, agent or employee of the company or an affiliate.
The Company has a formal anti-hedging policy prohibiting all directors, officers, senior vice-presidents, vice-presidents, partners covered by the Partnership Plan and others from hedging the economic exposure of their share ownership and equity-based long-term incentive compensation. Our anti-hedging policy ensures that our interests and the interests of our shareholders are one and the same.
Procedures for Complaints Regarding Accounting Matters and Auditor Independence Mechanisms
The Audit & Risk Committee has established procedures for the receipt, retention, and treatment of complaints regarding accounting, internal controls, or auditing matters, and for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. These procedures are posted on Barrick’s website at www.barrick.com/about/governance.
The Audit & Risk Committee has adopted the Audit Services Policy for the pre-approval of services performed by Barrick’s auditor. The objective of the Audit Services Policy is to specify the scope of services permitted to be performed by the Company’s auditor and to ensure that the independence of the Company’s auditor is not compromised through engaging the auditor for other services. All services provided by the Company’s auditor are pre-approved by the Audit & Risk Committee as they arise or through an annual pre-approval of services and related fees. All services performed by Barrick’s auditor comply with the Audit Services Policy, and professional standards and securities regulations governing auditor independence.
The Audit & Risk Committee has established a hiring policy for employees or former employees of the external auditor. Under our hiring policy, the Company shall not employ a person as its Chief Executive Officer, Chief Financial Officer, or Chief Accounting Officer (or in an equivalent position) if: (1) such person is, or was within the two years prior to becoming employed by the Company, an employee or partner of an independent auditor that audited the Company’s financial statements during such two-year period, and he or she participated in any capacity in such audits, or (2) the hiring of such person would otherwise violate the restrictions set forth in, or established pursuant to, Section 206 of the Sarbanes-Oxley Act of 2002.
Board Orientation and Continuing Education
New members of the Board are provided with information about their roles, responsibilities, and duties as Board members, as well as information about the Company, its business, and the factors that affect its performance. They receive orientation packages that contain information concerning key legal requirements, the Company’s Articles, the duties and responsibilities of directors, the mandates of the Board and its committees, the Company’s key policies, including our Code, and copies of our public disclosure documents.
In addition to meeting with the Executive Chairman, the President and Chief Executive Officer, and the other members of senior management to discuss the nature and operation of our business, new directors participate in targeted orientation sessions, carried out over several hours, which address multiple topics that are critical to understanding our business. In 2018, these topics included:
- Finance: The role of the Senior Executive Vice-President and Chief Financial Officer; the finance group’s key responsibilities; financial reporting processes; commercial planning and optimization; the role of the treasury group; the corporate tax function; information management and technology; risk management and assurance; and investor engagement.
- Investment Management: A review of our capital allocation and project evaluation processes, and our approach to investment analysis.
- Operations Overview: The role of Barrick’s operational risk oversight process; Barrick’s values; operational targets; business improvement initiatives; health and safety; environment; and major project overview.
- License to Operate: Public perception of the industry; overview of government regulation; expectations of various constituencies (communities, investors, governments, and non-governmental organizations); industry considerations; evolution of corporate social responsibility at Barrick; and sustainability principles.
- Risk Management and Assurance: Role of risk management and assurance; financial governance; the internal audit function; and operational management assurance.
- Exploration and Growth: Barrick’s exploration profile and outlook; global summary of exploration projects and initiatives; Barrick’s exploration system; project selection processes; geochemistry; geophysics; drilling; modelling; and case study review.
- Talent Management and Human Resources: Overview of Barrick’s approach to executive compensation; compensation philosophy; shareholder engagement; partner and non-partner compensation; and the Barrick Global Share Plan and the Barrick Share Purchase Plan.
- Law Department Overview: The role played by the in-house corporate legal department in supporting Barrick’s business functions and global operations; legal risk management; litigation management; reporting obligations; key corporate policy review; and directors’ duties and responsibilities.
- Legal Governance and Compliance Overview: Review of ethics and compliance governance structure, including internal policies, procedures, and reporting obligations; Barrick’s human rights and corruption risk profile; and internal compliance and ethical business conduct training programs.
- Audit Approach: Introduction of the external auditing team, the approach to auditing and the interaction between the independent auditor and Barrick.
On an ongoing basis, directors:
- receive a comprehensive package of information prior to each Board and committee meeting;
- receive reports on the work of committees of the Board following committee meetings;
- participate in information sessions at Board and committee meetings on specific aspects of our business operations such as key development projects, financial risk management programs, corporate development and exploration strategies and activities, and corporate social responsibility activities;
- have full access to our senior management and employees;
- receive updates as appropriate between Board meetings on matters that affect our business and operations;
- participate in continuing education sessions that are incorporated, to the greatest extent practicable, into every regularly scheduled Board meeting and certain meetings of committees of the Board; and
- are encouraged to participate in other available educational opportunities, at the Company’s expense, that would further their understanding of our business and enhance their performance on the Board.
|Date||Topic of Educational Session||Benítez(2)||Cisneros||Clow(3)||Doer(4)||Dushnisky(5)||Evans||Greenspun||Harvey||Hatter(6)||Lockhart(7)||Marcet(8)||Moyo(9)||Munk(10)||Prichard(11)||Shapiro(12)||Thornton||Thrasher(13)|
Description of blockchain; increasing investment in blockchain across industries; implications for, and applicability of blockchain to, the mining industry; blockchain opportunities for Barrick
Role and composition of Barrick’s evaluation team; functional role of the evaluations process and approach for ranking opportunities; case study review of Barrick’s evaluation process (sales models, identification of synergies, and resource conversion); Barrick’s pipeline for growth opportunities
|July 2018||Artificial Intelligence
Advances in artificial intelligence; role to be played by artificial intelligence; implications of artificial intelligence for businesses generally and uses for business processes
|December 2018||Barrick/Randgold Integration
Goals of merged company; regional opportunities for unlocking value; short and long-term objectives; strategic considerations and priorities; optimization of sustainability initiatives; exploration opportunities; shareholder engagement; analysis of strengths and weaknesses; systems integration; enhancing partnerships; vision and culture
- In order to comply with the Canadian residency requirements under the Business Corporations Act (Ontario), Mr. Kevin Thomson – Senior Executive Vice-President, Strategic Matters and a Canadian resident – became a director on an interim basis between November 7, 2018 and November 27, 2018. No Board meetings or educational sessions were held during the period that Mr. Thomson was a director.
- Ms. Benítez became a director on April 24, 2018. Ms. Benítez passed away on February 28, 2019.
- Mr. Clow ceased to be a director on January 1, 2019.
- Mr. Doer ceased to be a director on April 24, 2018.
- Mr. Dushnisky ceased to be a director on August 31, 2018.
- Ms. Hatter became a director on April 24, 2018. Ms. Hatter ceased to be a director on January 1, 2019.
- Ms. Lockhart ceased to be a director on September 23, 2018.
- Mr. Marcet ceased to be a director on January 1, 2019.
- Dr. Moyo ceased to be a director on April 24, 2018.
- Mr. Munk ceased to be a director on January 1, 2019.
- Mr. Prichard ceased to be a director on January 1, 2019.
- Mr. Shapiro ceased to be a director on January 1, 2019.
- Mr. Thrasher ceased to be a director on January 1, 2019.
Annual Performance Assessments
Generally, the Board, its committees, and individual directors participate in an annual assessment process. For 2017, the Lead Director and the Chairman of the Corporate Governance & Nominating Committee jointly interviewed the directors to obtain feedback on priorities for 2018, the operation of the Board and its committees, and opportunities to enhance their effectiveness. The interviews included 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 were reviewed with the Board in 2018. The Lead Director and the Chairman of the Corporate Governance & Nominating Committee provided individual feedback to directors based on the peer reviews. Due to the ongoing Merger process and associated governance changes, formal annual performance assessments were not conducted in 2018. The newly-constituted Board plans to recommence the annual performance assessment process in 2019.
Enhanced Clawback Policy
Barrick’s Clawback Policy was recently amended to subject incentive compensation paid or granted to the Executive Chairman; President and Chief Executive Officer; Senior Executive Vice-President and Chief Financial Officer; Senior Executive Vice-President, Strategic Matters; other Named Partners; and other select senior employees to clawback in cases of a material financial misstatement or a determination by the Board that wrongful conduct had occurred, in each case, that resulted in a participant receiving a higher amount of incentive compensation than would have been received absent the material misstatement or wrongful conduct, as applicable. The full text of our Clawback Policy is available on our website at www.barrick.com/about/governance.