Exxaro Resources limited
Environmental, social and governance report 2021

Ethical culture

King IV refers to organisational ethics as ethical values applied to decision making, conduct and the relationship between the organisation, its stakeholders and broader society. The board has taken active steps to address the King IV principle of progressing from merely ethics management to establishing an ethical culture within the organisation, which will receive particular focus in 2022 as an ethics strategy and management plan are being developed.


Building organisational ethics is a journey. Our board assumes responsibility for ensuring that organisational ethics is managed effectively and governs the group's ethics to support the establishment of an ethical culture. Through the code of ethics, the company confirms the organisation's ethical principles that, when followed, promote values such as trust, acceptable behaviour and fairness.

Our values provide general guidelines for our interactions with each other and our stakeholders, and reflect what is important to us and how we conduct ourselves. The following fundamental values are expressed in the code of ethics:

  • Empowered to grow and contribute
  • Teamwork
  • Honest responsibility
  • Committed to excellence

Recognising that our public reputation is one of our most important assets, the organisation is committed to achieving the highest ethical standards in our business operations. We recognise our obligations to our stakeholders, particularly shareholders, clients, employees, business partners, competitors, the authorities, the environment and the wider community. Maintaining the trust and confidence of our stakeholders is the responsibility of every employee. In our actions, the values and associated behaviours must guide and direct our conduct.

Our group company policies and procedures, relating to specific issues, processes and situations, support the code of ethics. The following policies support the establishment of an ethical culture (but should not be seen as an exhaustive list) in addition to the code of ethics:

  • Anti-bribery and anti-corruption
  • Conflicts of interest
  • Exxaro's supplier code of conduct
  • Fraud prevention
  • Fraud investigation process
  • Fraud response
  • Gifts and benefits from suppliers
  • Recruitment and selection
  • Whistleblowing
  • Insider dealing
  • Political donations
  • Nepotism
  • Diversity and inclusion


The board monitors the ethical culture of the group through its reporting structures, which include two board committees (the SERC and audit committee) and the ethics committee (a management committee).

Following the 2020 group-wide integrity survey conducted by internal audit, a group-wide ethical risk assessment was conducted by The Ethics Institute in 2021. The assessment sought to measure ethical culture, behaviour and perceptions of how ethics are managed in the group, and to produce an ethics profile of the group, which included a level of ethical culture maturity.

Flowing from this, the ethics committee began formulating a statement of strategic ethical intent, and developing an ethics strategy and management plan to address specific identified development areas. These areas include ethics awareness, ethics accountability and responsibility in an open and transparent manner, increasing ethics talk at every level of the business and commitment to ethics by all levels of the organisation. This strategy and management plan will be considered by the SERC in 2022 for approval by the board.


Our board charter and code of conduct (board charter) regulates the parameters in which the board operates and ensures the application of good corporate governance principles in all dealings in respect and on behalf of the company and the group. It sets out the roles and responsibilities of the board and individual directors, including the composition and relevant procedures.

The board charter requires board members to be individuals of calibre and credibility with the necessary skills and experience. In this regard, the remuneration and nomination committee must ensure continuity of directorships and undertake succession planning on behalf of the board. This includes identification, mentorship and development of future candidates. Exxaro also engages with shareholders about the required skills, competencies, and gender and diversity targets for the board's effective functioning.

In terms of the board charter, all directors are required to undergo continuing professional development, as approved by the board from time to time, on recommendation by the remuneration and nomination committee, and to attend regular briefings arranged by the company on changes in legislation, governance and the business environment.


In terms of the Companies Act and King IV, directors and prescribed officers have specific duties regarding the disclosure of actual direct and indirect conflicts of personal financial interests as well as the perception of a conflict, including that of their related parties.

The group has a conflicts of interest policy, which is reviewed regularly. In line with the JSE Debt Listings Requirements, the company's conflicts of interest policy and register, reflecting material disclosures, are on the company's website.

The policy places an obligation on directors, prescribed officers and employees (as well as their related parties) to firstly avoid conflicts of interest. It also lists several conflicts that are not acceptable to the company and may not be approved when declared.

Annual general declarations are required from directors and prescribed officers of outside interests in accordance with section 75(4) of the Companies Act. In terms of the policy, annual declarations are also required from all employees in the group.

In addition to the annual declarations, an item dealing with the declaration of interests at the beginning of each meeting appears on every executive committee, board, board committee and management committee agenda. All attendees are required to formally declare that none of them, nor their related parties, have any personal financial interest in any matter on the agenda. This is recorded in meeting minutes. Similarly, a director or prescribed officer must indicate personal financial interest in a matter to be decided through written resolution by informing the group company secretary.

The implementation of an electronic platform to facilitate reporting, workflow approvals and an auditable communication trail for disclosures in 2020 were reviewed. The company has identified an alternative platform to address shortcomings that would allow for managing other governance-related matters. These include the gift and benefits register, director trade clearances and policy management. The new platform would also enable employees without access to computers to make disclosures. It is anticipated that the new platform will be implemented in 2022.


The group company secretary hosts two annual, fixed, governance-related intervention sessions for the board.

The themes of the two governance sessions in 2021 were:

  • Ethical and effective leadership
  • The role of governing bodies in responding to climate change

Both sessions included training by the sponsors on the JSE Listings Requirements as well as the JSE Debt Listings Requirements.

As the regulatory environment within which Exxaro operates is continually changing, and to systematically develop directors' fields of knowledge and skills, a structured, themed programme has been recommended by the group company secretary for 2022.


As part of our ethical culture, Exxaro encourages employees and stakeholders to report suspected fraud or corruption to its fraud and ethics hotline, independently managed and reported to the board's SERC as well as management's ethics committee.

Based on the importance of retaining the integrity of the Exxaro hotline, it is deemed necessary that Exxaro should, as far as reasonably possible, protect the interests of the disclosing parties. As the hotline plays an important role in combating fraudulent activities, Exxaro has successfully defended an application for the disclosure of an anonymous complaint, which could have undermined the system's confidentiality.


The Exxaro supplier code of conduct drives the company's commitment to ethical conduct with its suppliers and service providers. The code

communicates the company's mandatory standards and suppliers must live up to this code. The company also conducts rigorous audits to ensure compliance. The code is available to current and prospective suppliers on our website.


The board ensures the organisation's strategy and conduct reflect its drive to be a responsible corporate citizen and purpose to power better lives in Africa and beyond.

As the organisation is an integral part of society, the board sets the direction and ensures that the company's responsible corporate citizen efforts include compliance with the Constitution of South Africa (including the Bill of Rights), the law, leading standards, and its own codes of conduct and policies.

Therefore, the board exercises independent judgement in overseeing management and safeguarding the interests of all stakeholders, including shareholders. In fulfilling its stewardship role, the board seeks to instil and foster a corporate environment founded on integrity, and to provide management with sound guidance in pursuit of long-term shareholder value, thus ensuring that the company provides sustainable value to society as a whole.


In addition to the role of the board and its committees, the SERC's role has been amended in 2021 to entrench responsible corporate citizenship as part of the committee's focused activities. The role and responsibility of the board's SERC include overseeing how the consequences of the group's activities and outputs affect its status as a responsible corporate citizen in the following areas:

  • Economy: economic transformation as well as fraud and corruption prevention, detection and mitigation
  • Society: public health and safety, consumer protection, community development and protection of human rights


Effective from 1 March 2008, our labour and human rights policy outlines the company's position and intent with regard to protecting the human rights of our employees and people in the company's sphere of influence within our host communities. In 2021, Exxaro initiated a process to develop a framework for the organisation that will further guide management of human rights issues. Herein, Exxaro is guided by the industry framework proposed by the Minerals Council, drawn mainly from the UN guiding principles on business and human rights. For more on our human rights commitment please consider Human rights of this report.

Exxaro remains, since 2007, committed to supporting the 10 principles of the UNGC on human rights, labour, environment and anti-corruption. The UNGC principles are embedded in our Sustainable Growth and Impact strategy, values, operations and stakeholder engagements in alignment with our endeavours to meet the SDGs. For more information on the UNGC commitment, please visit our website.

Focus areas

In summary, some areas of focus in 2021, with some activities rolling over into 2022, were:

  • approving the SERC's new terms of reference to include oversight of this responsibility
  • conducted a group-wide ethical risk assessment
  • initiating a review and development of a human rights framework
  • roll out of the POPIA project implementation plan, including group-wide training
  • compulsory group-wide anti-bribery and corruption training on MyNexxt
  • compulsory training by directors, prescribed officers, group company secretary and directors of major subsidiaries, in respect of insider dealing and training made available to all employees on MyNexxt
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Appendix A: Criteria