Our Commitment to Corporate Governance
Effective governance is a foundation of our performance and success.
The following sections provide an overview of how we have continued to build the right Board with experience and expertise that complements our strategy, how we approach corporate governance, and how our Board oversees enterprise-wide risks.
Schedule A of this Circular contains 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.
Board Composition and Refreshment
Barrick has nominated nine directors for election at the Meeting who collectively represent the necessary mosaic of skills and experience that is relevant to our business and who serve as a voice of owners, by developing strategic priorities to create long-term value per share and ensuring that Barrick successfully executes these strategic priorities. Our Board includes international business leaders and mining industry professionals with expertise and experience working in all the jurisdictions in which Barrick operates and brings together diverse viewpoints and perspectives, exhibiting the skills, professional experience, and backgrounds necessary to best address the opportunities, challenges, and risks of our business.
The Board will continue to advance state-of-the-art governance practices including a rigorous annual evaluation process, which encompasses peer reviews and an assessment of the effectiveness of the Executive Chairman, the Lead Director, and Board committee chairs.
In furtherance of our initiative of ongoing Board renewal and our commitment to increasing the Board’s diversity, Barrick appointed Loreto Silva as a director in August 2019 following the untimely passing of Ms. María Ignacia Benítez in early 2019. Barrick identified Ms. Silva through a rigorous search and selection process overseen by our Corporate Governance & Nominating Committee. Ms. Silva brings to the Board significant expertise in large-scale infrastructure projects and wide-ranging experience in legal and government affairs with a specific focus in South America and increases the proportion of female Board nominees to 11%. In addition to Ms. Silva’s appointment, Barrick’s search for a second female director, who is expected to be an African with the appropriate experience to bring an independent view as well as an understanding of doing business in Africa, is well-advanced.
We intend to continue our initiative of ongoing Board renewal, with a view to increasing the Board’s diversity with a particular emphasis on adding additional women. For more details on the director search and selection process, see “Corporate Governance – Board Composition and Nomination of Directors” in Schedule A of this Circular, and for more details on our Diversity Policy, see “Diversity Initiatives” in Schedule A of this Circular.
Board and Senior Leadership Structure
Following completion of the Merger on January 1, 2019, John L. Thornton continued to serve as Executive Chairman of Barrick, providing leadership at the Board level and guiding business decisions on a macro level. Mark Bristow became President and Chief Executive Officer, overseeing the day-to-day operations of the business. Graham Shuttleworth became Senior Executive Vice-President, Chief Financial Officer and Kevin Thomson continued to serve as Senior Executive Vice-President, Strategic Matters.
The respective duties, responsibilities, and relationships among the Board, the Executive Chairman, and the President and Chief Executive Officer are described in greater detail below.
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. See “Board Mandate and Responsibilities” in Schedule A of this Circular.
The Executive Chairman is appointed by the Board. His primary functions include providing leadership and direction to the Board, facilitating the functions and responsibilities of the Board according to its mandate, and assuming responsibility for the strategic initiatives of Barrick outlined below. In addition to the responsibilities applicable to all other directors, the Executive Chairman’s responsibilities include, among other things, working with the Board and the President and Chief Executive Officer to develop strategies for the Company’s future growth, to ensure that Barrick’s operations are managed according to best-in-class practices, and to maintain strong and constructive relationships with strategic partners, including host governments and stakeholders in countries of critical importance to Barrick. See “Our Governance and Leadership Structure – Executive Chairman” in Schedule A of this Circular.
President and Chief Executive Officer
The President and Chief Executive Officer is appointed by the Board and reports to the Executive Chairman and the Board. 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 and monitoring operational performance, 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. The President and Chief Executive Officer is responsible for managing the Company’s internal control framework and reporting to the Corporate Governance & Nominating Committee on Barrick’s progress towards its corporate responsibility objectives. Among other things, the President and Chief Executive Officer is also responsible for overseeing the implementation of our decentralized management ethos with a strong ownership culture, and streamlining management and operations to eliminate non-essential costs. See “Our Governance and Leadership Structure – President and Chief Executive Officer” in Schedule A of this Circular.
Regionally-Focused Leadership Teams
Under the oversight of the President and Chief Executive Officer, Barrick has implemented a flat management structure with a strong ownership culture through the establishment of regionally-focused leadership teams in each of the geographies where Barrick operates (i.e., North America, Latin America and Asia Pacific, and Africa and the Middle East). By delegating authority to the executives and teams that are directly responsible for overseeing these regions, while streamlining management and operations to eliminate non-essential costs, Barrick expects to be better-positioned to deliver long-term value to its shareholders.
In addition, Barrick has established leadership teams whose responsibility is to focus on: (i) finance, risk management, business assurance, information technology, and supply chain; (ii) strategic matters; (iii) exploration & geology; (iv) mineral resource management; (v) metallurgy, engineering, and capital projects; (vi) health, safety and environment, and sustainability; (vii) human resources; and (viii) corporate communications. Each of these teams, together with the regional operating teams, reports directly to the President and Chief Executive Officer whose objective is to ensure the seamless operation of the entire organization with a view to driving value creation.
Director Search Process
We identify director candidates through a rigorous search and selection process overseen by our Corporate Governance & Nominating Committee. As required, Barrick retains an external search firm to identify potential candidates. The aim of this process is to supplement the Board with individuals possessing complementary skills. In particular, consistent with our Diversity Policy, Barrick has been working to increase the gender diversity of its Board as it continues to seek out directors whose skills, professional experiences, and backgrounds are able to best address the opportunities, challenges, and risks of our business. With the nomination of Ms. Loreto Silva at the Meeting, 11% of the nominees to Barrick’s Board are women. We hope to increase the percentage of women on the Board and we are well-advanced in our search for a second highly qualified female candidate to join our Board. See “Our Commitment to Corporate Governance – Board Composition and Refreshment”.
Our Approach to Corporate Governance
Our Board is independent.
- 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.
Our Board is effective.
- Board Assessment: The Board, its committees, and individual directors participate in an annual assessment process in which the Lead Director and the Chair 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 Chair 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 almost all regularly scheduled Board meetings. For further details on the education program for 2019, see “Board Orientation and Continuing Education” in Schedule A of this Circular.
Our Board is responsive.
- Shareholder Engagement Policy: The Board has adopted a formal Shareholder Engagement Policy. The Shareholder Engagement 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 Shareholder Engagement Policy is available on our website at www.barrick.com/about/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.
- Governance-Focused Shareholder Engagement: In the fall of 2019, the Lead Director and the Chair of the Compensation Committee met with significant shareholders to provide an update on Barrick’s compensation philosophy review and the progress achieved with the Executive Chairman’s redesigned compensation framework.
- Sustainability-Focused Shareholder Engagement: Throughout 2019, the Group Sustainability Executive met with significant shareholders and leading ESG ratings firms to discuss Barrick’s sustainability vision, sustainability policies, site level sustainability performance, and approach to sustainability, including Board and management oversight of sustainability matters. Our Lead Director, Chair of the Compensation Committee, and Human Resources Executive also participated in discussions with shareholders to provide an overview of the Board’s role in overseeing the Company’s approach to sustainability and how sustainability performance is reflected in incentive compensation.
- Nevada Gold Mines Analyst Day: In September 2019, Barrick hosted a site visit of the operations of Nevada Gold Mines for a group of 24 significant shareholders and key analysts. The President and Chief Executive Officer and Senior Executive Vice-President, Chief Financial Officer led the three-day visit, which highlighted Barrick’s long-term vision for generating shareholder value from Nevada Gold Mines. Operational, exploration, growth, and community updates were provided by the Executive Managing Director of Nevada Gold Mines, along with the senior leadership team of Nevada Gold Mines.
- Quarterly Results Presentations: Throughout 2019, the President and Chief Executive Officer hosted four live presentations in Toronto, Canada and London, United Kingdom to discuss Barrick’s quarterly financial, operational, and exploration results, as well as updates on our strategy and organizational structure. Each quarterly results presentation was attended by approximately 50 significant shareholders, key analysts, and media journalists. These presentations were also broadcast live via audio webcast for those who could not attend in person.
Our approach to corporate governance evolves with state-of-the-art practices.
- Enhanced Clawback Policy: Our Clawback Policy subjects incentive compensation paid or granted to the Executive Chairman; President and Chief Executive Officer; Senior Executive Vice-President, Chief Financial Officer; Senior Executive Vice-President, Strategic Matters; Chief Operating Officer, Latin America and Asia Pacific; other Partners; and other select senior employees to clawback in cases of a material financial misstatement or a determination by the Board that wrongful conduct has 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.
- Share Ownership Policies for Non-Executive Directors and Executives: Barrick maintains minimum share ownership requirements for its directors, executives, and other officers. Non-executive directors are required to hold at least three times the value of their annual Board retainer in Barrick Shares and/or Deferred Share Units (DSUs) within five years of joining the Board. Our Executive Chairman is required to hold at least four times his salary in Barrick Shares and DSUs within three of joining Barrick. Our President and Chief Executive Officer is required to hold ten times his salary in Barrick Shares, RSUs, and PGSUs within the later of five years from the date of his appointment and February 2025. Our other Named Partners are required to hold five times their salary in Barrick Shares, RSUs, and PGSUs within the later of five years from the date they become a Partner and February 2025. See “Report on Director Compensation and Equity Ownership – Director Share Ownership Requirements” and “2019 Compensation of Named Executive Officers – Managing Compensation Risks – NEO Share Ownership Requirements”.
- Anti-hedging Policy: Barrick has a formal anti-hedging policy prohibiting all officers and directors from hedging the economic exposure of their ownership of Barrick Shares and equity-based LTI compensation.
- Innovative Approach to Disclosure: Since 2018, Barrick has issued an online digital information circular (Digital Circular) that modernizes the way that proxy materials are presented to shareholders and makes proxy-related information more accessible and interactive. Barrick’s 2020 Digital Circular will be available on our website at www.barrick.com/investors/agm starting in April 2020.
- 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
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.
By further decentralizing our corporate office, we have continued to accelerate the pace at which information flows between leadership and our mines. This nimble structure enhances our risk management processes by promoting faster information sharing and greater transparency. We hold a Weekly Executive Review, which is the main forum to raise and discuss risks facing the operations and organization more broadly. The Weekly Executive Review is held among the President and Chief Executive Officer and other key executives, including the Senior Executive Vice-President, Strategic Matters; Senior Executive Vice-President, Chief Financial Officer; our regional Chief Operating Officers; and senior management.
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 Audit & Risk Committee assists the Board in, among other things, overseeing the Company’s management of enterprise risks as well as the implementation of policies and standards for monitoring and mitigating such risks.
During 2019, we continued to improve the quality of risk information provided to the Audit & 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 delivered on specific topics to provide a more detailed understanding of risks and management’s risk mitigation strategies, where appropriate. For example, during 2019, in-depth briefings were provided to the Audit & Risk Committee on a range of topics, including on the integration of the former Randgold operations following the Merger and development of a new Group risk register reflecting Barrick’s new regional operating model; the formation of Nevada Gold Mines and the integration of the joint venture assets contributed by Newmont Corporation and now operated by Barrick; the consolidation of Acacia Mining plc’s Tanzanian operations by Barrick and risks related to the framework agreement to create a new partnership and settle outstanding disputes with the Government of Tanzania; and tax risks, cybersecurity risks, and Barrick’s mine closure and tailings storage facility stewardship programs.
For a more detailed description of our risk oversight processes, see “Risk Oversight” in Schedule A of this Circular.
Our Commitment to Managing Climate Change Risks
Barrick considers climate change, including shifts in temperature and precipitation and more frequent severe weather events, to be a company, community, and global concern. In 2019, following the Merger and formation of Nevada Gold Mines, Barrick reviewed and updated 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. In recognition of the important link between energy use and greenhouse gas (GHG) emissions, in 2019, Barrick updated its GHG emissions reduction target to achieve reductions of at least 10% by 2030 (against a 2018 baseline that combines legacy Barrick and Randgold data), while maintaining a steady ounce production profile. By effectively managing our energy use and implementing renewable energy solutions, we can reduce our draw from local energy grids, reduce our GHG emissions, achieve more efficient production, and reduce direct mining costs.
Barrick’s climate change strategy has three pillars: (i) identify, understand and mitigate the risks associated with climate change, (ii) measure and reduce Barrick’s impact on climate change, and (iii) improve our disclosure on climate change. Governance over climate-related risks and opportunities is provided at both the Board and management level.
The Corporate Governance & Nominating Committee, which meets quarterly, is responsible for overseeing Barrick’s policies, programs, and performance relating to the environment, including climate change. The Audit & Risk Committee assists 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 Corporate Governance & Nominating Committee throughout 2019. In addition, the Audit & Risk Committee reviews the Company’s approach to climate change in the context of Barrick’s public disclosure.
In furtherance of its commitment to sustainability, Barrick established 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, and 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 E&S Committee reports include a quarterly update on climate change and greenhouse gas emissions by our mines. 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.
- Free cash flow 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, see “Other Information – Use of Non-GAAP Financial Performance Measures”.