The board of directors is responsible for establishing management structures and processes based on ethical values and good corporate governance principles, ensuring Harmony’s business is sustainable in terms of our financial, social and environmental performance. The board is governed by its terms of reference, downloadable from the Harmony website.

The board and its committees have work plans to ensure responsibilities are appropriately addressed throughout the year.

One of the duties of the board is to ensure that Harmony complies with all applicable laws, in both South Africa and Papua New Guinea, and that it adheres to non-binding rules, codes and standards. During FY14 we held a workshop, attended by all departmental heads and relevant people to review the regulatory framework that governs our business.

A comprehensive compliance strategy will be drafted during FY15 which will then be the framework for an overriding, renewed monitoring system.

The foundation of our corporate governance is compliance with the Companies Act, the requirements of both the Johannesburg Stock Exchange, our primary listing, and the New York Stock Exchange, as well as King III and the related principles of good corporate governance. Harmony also complies voluntarily with the principles of the United Nations Global Compact, International Council of Mining and Metals, the Global Reporting Initiative and the Cyanide Code.

The internal audit function is responsible for assisting the board and management by independently reviewing the adequacy and effectiveness of Harmony’s system of internal control. Significant findings are reported to the audit and risk committee and followup audits are conducted in areas where significant internal control weaknesses are found. Harmony has an in-house internal audit function in a co-sourced arrangement with KPMG to provide assurance on the effectiveness of governance, risk management and the internal control environment.

The purpose, authority and responsibility of the internal audit function are formally documented in the internal audit charter as approved by the audit and risk committee.

The board should elect a chairman who is an independent non-executive director. The chief executive officer of the company should not also fulfil the role of chairman of the board.

Johannesburg Stock Exchange Listings Requirement, section 3.84(c)

On our board, the roles of the chairman and chief executive officer are distinct and separate, as governed by the board’s terms of reference and the delegation of authority framework.

Our chairman, Patrice Motsepe, was appointed based on the value he adds to Harmony in this role, as a result of the vital skills he has. Mr Motsepe has served on our board since 2003 and was re-elected as chairman in August 2014. In terms of our succession plan, the chairman is currently Securities and Exchange Commissiononded by deputy chairman, Modise Motloba, who has held this position since August 2012. As determined with the guidance of King III, Mr Motsepe is not considered to be an independent chairman.

As a result, Fikile De Buck was re-appointed as our lead independent non-executive director in August 2014. Her role is in line with the recommendations of King III and she assists the board in managing any actual or perceived conflicts of interests that may arise from the chairman not being independent. Mavuso Msimang was appointed deputy lead independent non-executive director on 5 May 2014.

Johannesburg Stock Exchange Listings Requirement, section 3.84(b)

We have paid specific attention to the composition of our board to ensure it reflects our objectives and is therefore sustainable. Harmony has a unitary board comprising a majority of independent non-executive directors.

On recommendation by the nomination committee, in terms of the King III requirement, the board evaluated and confirmed the classification of all independent non-executive directors as independent. This includes directors serving longer than nine years.

The responsibility for board appointments lies with the nomination committee, which recommends all new board appointments and reviews succession plans for directors and management. In line with King III, the board chairman is a member of this committee, and the procedures governing appointments are formal and transparent. While the nomination committee recommends individuals as members of the board, the appointment of board members is considered by the board as a whole, in accordance with its terms of reference. These appointments are, in turn, approved by shareholders.

When making new appointments to the board, Harmony considers the following factors: skills; experience; gender; and demographics. We are satisfied that we currently have an acceptable balance of members and that our non-executive and independent directors have sufficient experience and knowledge among them to carry significant weight in the board’s decision-making process.

Once appointed, directors undergo the company’s board induction programme. Managed by the company Securities and Exchange Commissionretary, this programme provides new board members with comprehensive company information and governance packs. It also offers directors the opportunity to meet with various management teams and tour the business.

A formal training-needs analysis is conducted annually to ensure board members are appropriately trained with ad hoc training opportunities identified during the year. Formal training on relevant topics is given at each board meeting, while the company Securities and Exchange Commissionretary provides board members with regular updates on regulatory and industry developments. Our board also takes time to visit our operations and community projects during the year.

The board should be assisted by a competent, suitably qualified and experienced company Securities and Exchange Commissionretary

Johannesburg Stock Exchange Listings Requirement, section 3.84(i)&(j)

In terms of the relevant section of the Johannesburg Stock Exchange Listings Requirements, the board has, on recommendation from the nomination committee, considered the qualifications, level of experience and competence of the company Securities and Exchange Commissionretary. The board is satisfied that Riana Bisschoff is sufficiently competent, qualified and experienced to act as Harmony’s company Securities and Exchange Commissionretary. The board is further satisfied that Riana is not a director of the board or any of the company’s subsidiaries and maintained an arm’s-length relationship with the board during the year under review. The following information was taken into consideration during the review:

Riana Bisschoff (LLB, LLM) is a qualified attorney, conveyancer and notary. She has been a company Securities and Exchange Commissionretary for the past ten years (seven years in a listed environment). Riana was appointed group company Securities and Exchange Commissionretary in March 2012, and is fully supported by the board and management. She plays an active role in achieving good corporate governance, supporting the chairman and the board in:

• Ensuring the effective functioning of the board
• Providing guidance to the chairman, board and directors of Harmony’s subsidiaries on their responsibilities and duties in the prevailing regulatory and statutory environment
• Raising matters that may warrant the attention of the board

The board should delegate certain functions to well-structured committees without abdicating its own responsibilities

Johannesburg Stock Exchange Listings Requirement, section 3.84(d)

In order to focus on our priorities, particular responsibilities have been delegated to board committees in terms of the board delegation of authority and the committees’ terms of reference. These committees do not abdicate the board’s overall responsibility but rather serve to support the board in executing that responsibility. At each board meeting, the committee chairmen report on the activities of their respective committees and make recommendations on key decisions. Some duties are further delegated to the chief executive officer and financial director who, in turn, delegate some of these responsibilities to the executive committee (Exco) and management, who are closer to the operations. A clear line of communication is in place to ensure these responsibilities are well managed, underpinning our value of accountability.

Each committee comprises board members with the skills and expertise that suit its portfolio, allowing committee members to apply their minds and make well-considered recommendations to the board. Minutes of each committee meeting are included in the board packs distributed prior to board meetings to provide context to deliberations at committee meetings. To ensure board members are able to fully consider what they need to within these committees, and on the board, each director has unrestricted access to the advice and services of senior management, allowing them insight into the business, as well as full access to company and subsidiary information, records, documents and property. Our non-executive directors are encouraged to visit our operations and attend management meetings to get a sense of how they are run. However, they remain independent, allowing management and Exco to fulfil their duties fully. If they feel it is necessary, our board members can request independent, professional advice at the company’s expense.

The audit committee should satisfy itself of the expertise, resources and experience of the company’s finance function

Johannesburg Stock Exchange Listings Requirement, section 3.84(g)&(h)