Board composition

Independence

In line with King IV™, non-executive members may be categorised as independent if the board concludes that there is no interest, position, association or relationship which, when judged from the perspective of reasonable and informed third party, is likely to influence unduly or cause bias in decision making in the best interest of the company.

Currently, one non-executive director, Mr J van Rooyen, has served on the board in an independent capacity for longer than nine years. In line with the company's memorandum of incorporation and the board charter, a formal assessment regarding the independence of mind has been conducted annually since 2017. After in-depth deliberation, the remco, upon recusal of Mr van Rooyen, concluded that the member exercises objective judgement and that there is no interest, position, association or relationship which, when judged from the perspective of a reasonable and informed third party, is likely to influence unduly or cause bias in decision making.

After a formal assessment, the board concluded that the majority of the directors are independent:

Board composition (%)

Excluding Ms Mashile-Nkosi who resigned with effect from 11 October 2019.

There has been a marked increase in the independence of our board since 2017, increasing from 50% to 76% independent non-executive directors in 2019.

Director tenure

The following directors resigned during 2019:

1. Ms D Mashile-Nkosi resigned as a non-executive director of the company with effect from 11 October 2019

2. Ms MW Hlahla resigned as an independent non-executive director of the company with effect from 31 December 2019

The period in office of our directors provides a proper blend of experience to the board. Our director tenures can be summarised as follows:

Director tenure (%)

Excluding Ms Mashile-Nkosi who resigned with effect from 11 October 2019.

Diversity of our board

The importance and promotion of broader diversity at board level is recognised by the board. The board formally adopted a diversity policy in February 2018, focusing specifically on the diversity attributes of gender, race, culture, age, field of expertise, skills and experience. The new appointments to be made to the board following the resignations of two of our female directors will apply the policy of broad diversity in the nomination of new directors to the shareholders for appointment.

For the reporting period, our board of directors consisted of a truly diverse number of directors:

(i) Racial diversity

The board set a racial diversity target, at board level, of 50%, and we achieved the following:

Racial diversity (%)

Excluding Ms Mashile-Nkosi who resigned with effect from 11 October 2019.

There has been a marked increase in the racial diversity of our board since 2017, increasing from 50% to 69% in 2019.

(ii) Gender diversity

In line with King IV^TM, the board set a gender diversity target in 2017 of 30% historically disadvantaged South African female directors to be achieved by 2022. The female representation on the Exxaro board achieved 14% in 2017 and increased to 35.7% in 2018.

The remco requested management to compile a gender charter and policy for implementation within the company, which will also be considered in any new appointment to be made on the board.

However, notwithstanding the resignation of Ms Mashile-Nkosi on 11 October 2019, we still achieved the board's female representation target:

Gender diversity (%)

(iii) Diversity of age

The retirement age for an executive director is 63 years and for a non-executive director 70 years. The board is entitled to recommend the re-election of a non-executive director who has passed the age of 70, provided that the remco and the board recommends to shareholders that the individual is suitable for re-election. Such re-election will occur on an annual basis once the director has reached the age of 70.

In line with the above, the chairman, Mr van Rooyen, is obliged to retire annually from 2020. The remco confirmed that Mr van Rooyen is available for re-election in 2020 and has, through a fit and proper assessment confirmed that he has the necessary depth of skills and experience. The remco's assessment was confirmed by the board and it was stated that Mr van Rooyen steered the board with confidence, strength and conviction during the 2018 and 2019 periods, and that he therefore be recommended for re-election by shareholders. The abovementioned conclusion was also reached by the independent board evaluation process.

To ensure continuity of experience and knowledge, the company has adopted a process of staggered continuity and re-election of directors in terms of the memorandum of incorporation. After thorough deliberation by the remco about the members standing for re-election, it was confirmed by the board that they are recommended for re-election by shareholders.

The age of our directors for the period under review:

Diversity of age (%)

Excluding Ms Mashile-Nkosi who resigned with effect from 11 October 2019.

(iv) Diversity in skills and experience

Our directors are carefully selected to ensure a balanced amalgamation of expertise and experience for the board to be able to effectively fulfil its decision-making role on behalf of Exxaro. In accordance with King IV^TM, directors should be knowledgeable, skilled, experienced, diverse and independent enough to discharge fully their governance responsibilities.

Following the resignation of Ms Mashile-Nkosi on 11 October 2019, the remco has been working on a succession plan to source a new black director in order to meet the recommended gender diversity target as approved by the board.

Exxaro considers, over and above management experience, the following technical expertise when appointing directors:

• Mining industry
• Mining engineering
• Renewable energy
• Water technology
• Agricultural/food security.

The board is satisfied that it comprises the appropriate balance of knowledge, skills, experience, diversity and independence to enable it to discharge its governance role and responsibilities objectively and effectively.

Skills and experience matrix

	Diversity
Director's name	Qualifications	Date of appointment	Tenure (years)	Date of birth	Age	Ethnicity	Gender	Experience as a director (years)
GJ Fraser-Moleketi	DPhil Honoris Causa (Nelson Mandela University), Masters in Administration (University of Pretoria), Leadership Programme (Wharton), Fellow of the Institute of Politics (Harvard)	2018/05/18	1	1960/08/24	59	Coloured	Female
MW Hlahla Resigned 31 Dec 2019	MA Urban Planning, UCLA School of Architecture and Planning, Advanced Management Programme (INSEAD, France), Certificate in Accounting and Finance (Wits Business School)	2015/06/04	5	1963/02/03	56	Black	Female	10
L Mbatha	BA LLB (University of Lesotho), LLM (University of the Witwatersrand)	2018/03/07	2	1954/02/17	65	Black	Female	10
D Mashile-Nkosi Resigned 11 Oct 2019	Small Business Management Diploma (Wits Business School)	2018/03/06	2	1958/07/02	61	Black	Female	10
VZ Mntambo	BJuris, LLB (North West University), LLM (Yale)	2006/11/28	13	1957/09/17	62	Black	Male	17
LI Mophatlane	BA (University of Pretoria)	2018/05/23	2	1973/05/12	45	Black	Male	1
M Moffett	BCom, (CTA), CA(SA)	2018/05/18	1	1959/12/07	60	White	Male	25
EJ Myburgh	BEng (Electrical) (Pretoria), BSc (Hons) (Energy Studies) (Johannesburg), MBL (Stellenbosch), Executive Programme (Virginia)	2016/09/01	3	1958/09/14	61	White	Male	10
V Nkonyeni	BSc (Hons), Postgraduate Diploma in Accounting, CA(SA)	2014/06/03	6	1969/09/13	50	Black	Male	17
J van Rooyen	BCom, BCompt (Hons), CA(SA)	2008/08/13	12	1950/02/18	69	Coloured	Male	12
PCCH Snyders	BEng (Mining), Diploma in Marketing Management and MCom in Business Management, Mine Manager's Certificate of Competence (Coal and Metalliferous)	2016/07/01	4	1960/06/02	59	White	Male	14
A Sing	BSc Eng (Mechanical) (University of Natal), MBA (University of the Witwatersrand), AMP (INSEAD, France)	2018/03/07	2	1971/03/12	48	Indian	Female	7

	General management experience
Director's name	Qualifications	Leadership	Finance	Human resources	Legal	Governance and compliance	Economics
GJ Fraser-Moleketi	DPhil Honoris Causa (Nelson Mandela University), Masters in Administration (University of Pretoria), Leadership Programme (Wharton), Fellow of the Institute of Politics (Harvard)
MW Hlahla Resigned 31 Dec 2019	MA Urban Planning, UCLA School of Architecture and Planning, Advanced Management Programme (INSEAD, France), Certificate in Accounting and Finance (Wits Business School)
L Mbatha	BA LLB (University of Lesotho), LLM (University of the Witwatersrand)
D Mashile-Nkosi Resigned 11 Oct 2019	Small Business Management Diploma (Wits Business School)
VZ Mntambo	BJuris, LLB (North West University), LLM (Yale)
LI Mophatlane	BA (University of Pretoria)
M Moffett	BCom, (CTA), CA(SA)
EJ Myburgh	BEng (Electrical) (Pretoria), BSc (Hons) (Energy Studies) (Johannesburg), MBL (Stellenbosch), Executive Programme (Virginia)
V Nkonyeni	BSc (Hons), Postgraduate Diploma in Accounting, CA(SA)
J van Rooyen	BCom, BCompt (Hons), CA(SA)
PCCH Snyders	BEng (Mining), Diploma in Marketing Management and MCom in Business Management, Mine Manager's Certificate of Competence (Coal and Metalliferous)
A Sing	BSc Eng (Mechanical) (University of Natal), MBA (University of the Witwatersrand), AMP (INSEAD, France)

	General management experience
Director's name	Qualifications	Transformation and ethics	Risk and opportunity management	Innovative technology and information governance	Environmental sustainability	Sales and marketing	Health and safety
GJ Fraser-Moleketi	DPhil Honoris Causa (Nelson Mandela University), Masters in Administration (University of Pretoria), Leadership Programme (Wharton), Fellow of the Institute of Politics (Harvard)
MW Hlahla Resigned 31 Dec 2019	MA Urban Planning, UCLA School of Architecture and Planning, Advanced Management Programme (INSEAD, France), Certificate in Accounting and Finance (Wits Business School)
L Mbatha	BA LLB (University of Lesotho), LLM (University of the Witwatersrand)
D Mashile-Nkosi Resigned 11 Oct 2019	Small Business Management Diploma (Wits Business School)
VZ Mntambo	BJuris, LLB (North West University), LLM (Yale)
LI Mophatlane	BA (University of Pretoria)
M Moffett	BCom, (CTA), CA(SA)
EJ Myburgh	BEng (Electrical) (Pretoria), BSc (Hons) (Energy Studies) (Johannesburg), MBL (Stellenbosch), Executive Programme (Virginia)
V Nkonyeni	BSc (Hons), Postgraduate Diploma in Accounting, CA(SA)
J van Rooyen	BCom, BCompt (Hons), CA(SA)
PCCH Snyders	BEng (Mining), Diploma in Marketing Management and MCom in Business Management, Mine Manager's Certificate of Competence (Coal and Metalliferous)
A Sing	BSc Eng (Mechanical) (University of Natal), MBA (University of the Witwatersrand), AMP (INSEAD, France)

	General management experience
Director's name	Qualifications	Tax	Stakeholder relations	Project management	International	Local
GJ Fraser-Moleketi	DPhil Honoris Causa (Nelson Mandela University), Masters in Administration (University of Pretoria), Leadership Programme (Wharton), Fellow of the Institute of Politics (Harvard)
MW Hlahla Resigned 31 Dec 2019	MA Urban Planning, UCLA School of Architecture and Planning, Advanced Management Programme (INSEAD, France), Certificate in Accounting and Finance (Wits Business School)
L Mbatha	BA LLB (University of Lesotho), LLM (University of the Witwatersrand)
D Mashile-Nkosi Resigned 11 Oct 2019	Small Business Management Diploma (Wits Business School)
VZ Mntambo	BJuris, LLB (North West University), LLM (Yale)
LI Mophatlane	BA (University of Pretoria)
M Moffett	BCom, (CTA), CA(SA)
EJ Myburgh	BEng (Electrical) (Pretoria), BSc (Hons) (Energy Studies) (Johannesburg), MBL (Stellenbosch), Executive Programme (Virginia)
V Nkonyeni	BSc (Hons), Postgraduate Diploma in Accounting, CA(SA)
J van Rooyen	BCom, BCompt (Hons), CA(SA)
PCCH Snyders	BEng (Mining), Diploma in Marketing Management and MCom in Business Management, Mine Manager's Certificate of Competence (Coal and Metalliferous)
A Sing	BSc Eng (Mechanical) (University of Natal), MBA (University of the Witwatersrand), AMP (INSEAD, France)

	Technical experience
Director's name	Qualifications	Mining industry	Mining engineering	Renewable energy	Water technology	Agricultural/ food security
GJ Fraser-Moleketi	DPhil Honoris Causa (Nelson Mandela University), Masters in Administration (University of Pretoria), Leadership Programme (Wharton), Fellow of the Institute of Politics (Harvard)
MW Hlahla Resigned 31 Dec 2019	MA Urban Planning, UCLA School of Architecture and Planning, Advanced Management Programme (INSEAD, France), Certificate in Accounting and Finance (Wits Business School)
L Mbatha	BA LLB (University of Lesotho), LLM (University of the Witwatersrand)
D Mashile-Nkosi Resigned 11 Oct 2019	Small Business Management Diploma (Wits Business School)
VZ Mntambo	BJuris, LLB (North West University), LLM (Yale)
LI Mophatlane	BA (University of Pretoria)
M Moffett	BCom, (CTA), CA(SA)
EJ Myburgh	BEng (Electrical) (Pretoria), BSc (Hons) (Energy Studies) (Johannesburg), MBL (Stellenbosch), Executive Programme (Virginia)
V Nkonyeni	BSc (Hons), Postgraduate Diploma in Accounting, CA(SA)
J van Rooyen	BCom, BCompt (Hons), CA(SA)
PCCH Snyders	BEng (Mining), Diploma in Marketing Management and MCom in Business Management, Mine Manager's Certificate of Competence (Coal and Metalliferous)
A Sing	BSc Eng (Mechanical) (University of Natal), MBA (University of the Witwatersrand), AMP (INSEAD, France)

Must have used the skills in the past 20 years.
	Significant skills and experience (10+ years, in depth, main focus area, weekly use of skills and "line" accountability).
	Average skills and experience (5 – 10 years, ad hoc but regular and fairly in depth exposure/use of skills monthly).
	Limited skills and experience (5 years, very irregular or superficial exposure/use of skills quarterly/biannually).
	No experience.

Board membership

Appointment of directors

It is a commitment in our board charter that all directors must be individuals of calibre and credibility with the necessary skills and experience. In this regard, the remco ensures continuity of directorships and undertakes succession planning on behalf of the board, which includes the identification, mentorship and development of future candidates. To ensure continuity of experience and knowledge, the board has furthermore adopted a process of staggered continuity and re-election of directors, in terms of the company's memorandum of incorporation.

Exxaro directors are appointed through a formal process with the remco responsible for identifying suitable candidates as independent non-executive directors and, on the board's recommendation, shareholders then consider the directors for approval. The remco is also responsible for overseeing that the required independent background checks are done and that proposed candidates provide the required information as recommended in King IV™.

The retirement age for an executive director will be 63 (sixty-three) years and 70 (seventy) years for a non-executive director. The board, on recommendation by the remco, will be entitled to recommend for the re-election by shareholders a non-executive director who has passed the age of 70 (seventy), provided that the board formally motivates the recommendation for re-election to shareholders. Such re-election will occur on an annual basis at every AGM following the date on which the non-executive director has reached the age of 70 (seventy).

Details regarding the rotation and election of directors are contained in the notice of the AGM for 2020.

Board leadership

Our board continues to be led by an independent non-executive chairman, Mr J van Rooyen, in compliance with paragraph 3.84 of the JSE Listings Requirements and the recommended practices of King IV^TM, and Ms GJ Fraser-Moleketi continues to serve the board as the lead independent non-executive director.

The role of the chairman is separate and distinct from that of our chief executive officer and the separation of powers and responsibilities, as set out in the board charter ensures that no single person has unfettered decision-making powers and that the appropriate balance of power exists at board level.

Roles and responsibilities of the chairman, CEO and lead independent non-executive director

Functions	Responsibilities
Chairman	Is an independent non-executive director who will be responsible for setting the tone for an ethical culture at board level and for ensuring adherence to the rules of conduct and etiquette Is responsible for representing the board to shareholders and indirectly to other stakeholders relating to performance. Is responsible for ensuring the integrity and effectiveness of the governance process of the board Is responsible for managing conflicts of interest at any meeting of the board in accordance with all applicable legal requirements and best practice Is responsible for maintaining regular dialogue with the CEO over all operational matters and will consult with the remainder of the board promptly on any matter that gives him cause for major concern Acts as facilitator at board meetings to ensure that no director dominates discussion, that appropriate discussion takes place and that the relevant opinion among directors is forthcoming and discussions result in logical and understandable outcomes Plays a crucial role in ensuring the board is properly led and that the composition of the board is appropriate and adequate to enable the board to effectively fulfil its functions Provides the necessary direction required for an ethical and effective board and should form the link between the board, the CEO and management
CEO	Formulating and developing the company's short, medium and long-term strategy vision that will realise the company's core purpose and values while taking into consideration relevant risks and opportunities that will generate satisfactory levels of value creation as defined in King IVTM Leading the implementation and execution of approved strategy, policy and operational planning and shall be chief link between management and the board Monitoring and managing the day-to-day operational requirements and administration of the company Developing and recommending business plans, policies and objectives for consideration by the board and taking into consideration business, economic and political trends that may affect the operations of the company Managing/ensuring the submission of reports, financial statements and consolidated budgets for consideration by the board Overseeing the financial management of the company including financial planning, cash flow and management reporting Involving himself in group affairs via the executive committee and acting as its chair Not causing or permitting any practice, activity or decision by or within the company that is contrary to commonly accepted good business practice, good corporate governance or professional ethics Ensuring that key management functions are headed by individuals with the necessary competence and authority and that they are adequately resourced and performance managed Setting the tone at management level in providing ethical leadership and creating an ethical environment and culture and maintaining a positive ethical work climate that is conducive to attracting, retaining and motivating a diverse group of employees Ensuring the implementation and execution of the company's codes of conduct and ethics policies
Lead independent non-executive director	Leading in the absence of the chair Serving as a sounding board for the chair Acting as an intermediary between the chair and other members of the board, if necessary Dealing with shareholders' concerns where contact through the normal channels has failed to resolve concerns or where such contact is inappropriate Strengthening independence on the board if the chair is not an independent non-executive member of the board for whatever reason Chairing discussions and decision making by the board on matters where the chair has a conflict of interest Ensuring that the chair adheres to the rules of conduct and etiquette Leading the performance appraisal of the chair

Performance of our board

Board attendance

The attendance reflected below is based on four quarterly meetings, two governance sessions and six special board meetings calculated against the number of meetings the individual was required to attend.

Director	Designation		Attendance (%)
J van Rooyen	Independent non-executive director and chairman of the board		100
GJ Fraser-Moleketi	Lead independent non-executive director		100
**MW Hlahla	Non-executive director		50
PA Koppeschaar	Executive director: Finance director		100
*D Mashile-Nkosi	Non-executive director		71
L Mbatha	Non-executive director		83
MDM Mgojo	Executive director: Chief executive officer		100
VZ Mntambo	Non-executive director		83
MJ Moffett	Independent non-executive director		100
LI Mophatlane	Independent non-executive director		92
EJ Myburgh	Independent non-executive director		100
V Nkonyeni	Independent non-executive director		92
A Sing	Independent non-executive director		83
PCCH Snyders	Independent non-executive director		100

*	Ms D Mashile-Nkosi resigned as a director of the company with effect from 11 October 2019.
**	Ms MW Hlahla resigned as a director of the company with effect from 31 December 2019.