Integrated reporting, Richard Carpenter, MerchantCantos

SES Re-brand21.04.11Best practice narrative reportingManaging reputation in the Oil, Gas and Mining Industries

25 May 2012

Richard Carpenter Managing Partner

02© MerchantCantos 2012

Best practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries

Contents

• Changing reporting world — UK Government proposals

— Executive remuneration

— Integrated reporting

• Best practice examples

Corporate communications: An introduction to MerchantCantos

03

Changing reporting worldUK Government proposals Executive remuneration Integrated reporting



© MerchantCantos 2012 04

What’s happening in the UK?

• UK Government proposals to restructure narrative reporting

• Plans for split of current reporting format into: — Strategic report

— Annual Directors’ Statement

• Additional plans to: — Reduce disclosure requirements

— Reform executive pay disclosure

© MerchantCantos 2012



Business review

Current

Directors’ report Accounts

ARAARA




Key forward-looking information Detailed disclosures

Business review

Current

Future


ARAARA

StRAtegic RepoRtAccountS?

AnnuAl DiRectoRS’ StAtementAccountS?




Key forward-looking information Detailed disclosures Print version?

Business review

Current

Future


ARAARA

StRAtegic RepoRtAccountS?

AnnuAl DiRectoRS’ StAtementAccountS?

AnnuAl DiRectoRS’ StAtement



08

Split reporting format

• Strategic report — To provide key information including key

risks and forward-looking analysis – reputation management

• Content: — Strategy

— Business model

— Performance (including key financial data)

— Risks

— Social and environmental information

— Key governance and remuneration information



09


• Annual Directors’ Statement— To provide more detailed disclosures

to underpin the strategic report

• Content: — Information required by law

— Additional voluntary disclosures

— To include:— Directors’ Remuneration Report

— Corporate Governance Statement

— Audit Committee Report



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New reporting framework

Strategic Report

Audit

Annual Directors’ Statement

Financial Statements



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What do we think?

• Like— Moving repetitive disclosures online

— Cutting back on crossover

• Dislike — Lack of understanding of bigger reporting issues

— Still potentially too prescriptive

— Remains a lot of debate on how best to move forward

— Government does not seem to know all the ins and outs – but remains committed

— Change is coming… but it may be slow

— World may have moved on again



Executive remuneration

• Massive reputational issue at the moment

• Proposals include:— Requirement to disclose total remuneration

per director in a single cumulative figure— Potential to disclose remuneration below

board level— Greater linkage of pay and performance

— Linkage back to strategic objectives

— Historic performance of CEO over last five financial years

— Disclosure of fees paid to remuneration consultants



Integrated reporting

• Current buzz phrase

• Structured approach from IIRC (www.theiirc.org)

• Integration of financial, non-financial and narrative

• Strategic linkage and alignment



Narrative reporting linkage

CSR/sustainability

Strategy KPIs Risk information

What we do

How we measure it

What could knock us off course

How we plan to do it

Why we do it

Strategy/priorities/business model and resources

KPIs Risk management information

Mission/vision/ at a glance

Marketplace discussion/ context

+ + + +


Best practice examples


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The bucket listBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Benchmarking• Group at a glance

• Market context

• Business model

• Strategy

• KPIs

• Performance

• Resources

• Risks

• Sustainability

• Governance

• Reporting centre



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The great and the good


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Group at a glanceBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Group at a glance – Antofagasta1. Group at a glance Antofagasta •  Segmental data


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Market contextBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Market context – Evraz2. Market overview Evraz •  Succinct, sector by sector discussion

of demand •  Lots of graphs


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Business modelBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Business model – Fresnillo



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Business model – Fresnillo

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Our Business Model continued

Business model component Description Strategic focus

Value chainOperate Maximise the potential of existing operations

The extraction and beneficiation of ore from our operating mines. We apply optimal mining methods in accordance with the changing characteristics of each mine, benefited by the skills of our personnel and leading technology tools. When coupled with high-quality assets selectively added in the exploration and development phase, we remain competitively positioned in cost performance among industry peers.

See Review of Operations pages 48–57

Maximise operational potential through full capacity utilisation, reserve replacement, continuous improvements in productivity and cost controls.

See Our Strategy and KPIs pages 26–27

Develop Deliver growth through development projects

The development and construction of new operating mines, with disciplined adherence to schedules and budgets. Feasibility, engineering, procurement and construction teams work closely with operating personnel to ensure smooth transition from construction to commissioning.

See Review of Operations page 58

Deliver growth through the disciplined advancement of exploration projects towards mine development, start-up and production. Projects must meet stringent criteria regarding mineral content and embedded cost. Economic viability is determined by factors such as metallurgy, mine design, investment requirements, sustaining capital expenditures and rates of return.


Explore Extend the growth pipeline

The search for and quantification of mineral deposits that extend our resource base, with a focus on consolidating mining districts in Mexico and Latin America. Our track record of new discoveries is bolstered by continuous investment irrespective of metal prices, significant technical expertise, and partnerships and early-stage acquisitions that allow us to share the inherent benefits and risks of prospect exploration.

Our project pipeline extends across the multiple stages of exploration (prospecting, drilling and resource definition).

See Review of Operations pages 59–61

Extend the growth pipeline by deploying expert personnel, allocating sufficient investment capital, securing concessions and surface land rights, and pursuing selective early stage partnerships and acquisitions.


Licence to operateSustainability Advance our sustainable development

The responsible operation of our business to create value for and ensure the wellbeing of all stakeholders, without compromising future generations, through the comprehensive management of health, safety, environment and community relations programmes from the earliest stages of exploration until mine closure.

See Creating Stakeholder Value pages 24–25, Sustainability Report pages 62–75

Reinforce the sustainable development of the Group by implementing and enforcing policies and procedures and investing in equipment and training that put our people first in terms of health and safety; support strong environmental management practices; benefit the communities where we operate; and secure our adherence to best practices.

See Our Strategy and KPIs pages 32–33, Sustainability Report pages 62–75

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2

3

4

Fresnillo plcA

nnual report 2011O

verviewS

trategic Review

Performance

Governance

Financial Statements

23

Business model component Description Strategic focus

Strategic resourcesFinancial strength and control

The strict control of cash, assets, and costs and expenses in order to secure operational continuity and retain our competitive position as a low cost producer, ensure continuous investment in exploration, and maintain flexible capital funding options.

See Financial Review pages 76–89

Maximise value creation by controlling internal drivers of financial performance using tools such as long-term supply and service agreements, cost controls; inventory, trade and receivables management; fiscal planning; and exchange rate hedging. It continues to be the Group’s policy not to hedge price exposure on silver and gold realisations.

See Financial Review pages 76–89

Strategic relationships Key suppliers of equipment and services; contractors; customers; equity partners in our mines and projects; authorities and regulators. Also see Sustainable Development component.

See Creating Stakeholder Value pages 24–25

Create mutual value by acting with fairness, integrity and transparency, sharing best practices and fostering innovation.

Creating Stakeholder Value pages 24–25

Technology Tools and processes that support exploration, increase productivity, reinforce sustainability, enhance accountability, and support decision-making and financial planning processes.

Invest in innovation, maintain and continuously upgrade technology and training to promote productivity and efficiency.

Experienced management and skilled personnel

The critical human factor upon which the successful execution of our strategy relies.

See Community Relations pages 72–73, Executive Management page 95

Find, select, train and retain personnel with the requisite knowledge, skills and experience.

See Community Relations pages 72–73

Risk management frameworkRisk management framework

The assessment, evaluation and mitigation of the principal risks that could affect the Company’s ability to execute its strategy and deliver on its commitments.

See Our Risk Management Framework pages 36–43

At the operational level, to identify, assess and mitigate risk at mines, development projects and exploration sites; within each major capital project, to analyse and monitor project delivery risks; at the Executive Management and Board level, to assess and mitigate strategic and financial risks.

See Our Risk Management Framework pages 36–43

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StrategyBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Strategy – BP

38 BP Annual Report and Form 20-F 2011

Our strategy: Strategic priorities Our 10-point plan

Our 10-point plan is how we intend to build a stronger, safer BP. The first five points are things you can expect from us; the second five are things you can measure.

What you can expect from us1 We will keep a relentless focus on safety and managing risk

We are determined that BP will deliver world-class performance in safety, risk management and operational discipline. We will be a company that systematically applies our global standards as a single team.

2 We will play to our strengthsWe have had major successes at finding oil and gas at scale. We are also among the real pioneers of deepwater exploration. We have decades of experience managing giant fields and developing valuable gas value chains. We have built a world-class downstream business. Underpinning these strengths are deep capabilities in building relationships and in developing technologies.

Left BP moves gas from 6,000 metres below the Shah Deniz field in Azerbaijan to markets in Western Europe, 3,000 kilometres away.

Right As part of a $1.2 billion investment announced in 2011, the Kinnoull reservoir, UK North Sea, will be connected to BP’s Andrew platform.

3 We will be stronger and more focusedWe intend to be a stronger and more focused BP, with a base of assets that is high graded and high performing.

4 We will be simpler and more standardizedOur organization is already much more standardized than it was before the Deepwater Horizon oil spill. The transformation of our Exploration and Production segment from a regional business to one that is managed along lines of functional expertise is an example of this. Our footprint is smaller, with fewer assets and operations in fewer countries. Our internal reward and performance processes are more streamlined. This should drive better and more sustainable performance in safety, quality and efficiency, with less variation.

5 We will improve transparency through our reportingWe will improve transparency in the reporting of our business segments. We now break out the numbers of certain parts of our businesses, such as lubricants and petrochemicals in the downstream. From the first quarter of 2012, the group’s investment in TNK-BP will be reported as a separate operating segment.

Bu

siness review

: Gro

up

overview

BP Annual Report and Form 20-F 2011 39

What you can measure6 Active portfolio management

We want to focus our portfolio further on our areas of strength, and deliver increased financial flexibility. By the end of 2013, we expect to have completed $38 billion of disposals since the start of 2010.

7 New projects with higher marginsWe have a strong list of upstream projects due to come onstream over the next three years. By 2014, unit cash marginsa on production from this new wave of projects are expected to be around double our existing average.b

8 Operating cash flow growthWe are aiming to generate an increase of around 50% net cash provided by additional operating activities by 2014 compared with 2011c – approximately half from ending Deepwater Horizon Oil Spill Trust fund payments and around half from operations.

9 Use of cash flow for reinvestment and distributionsWe will use additional operating cash prudently. We want to use around half for increased investment in our project inventory for growth, and around half for other purposes. This may include increased distributions to shareholders through dividends or share buybacks or repayment of debt.

10 Strong balance sheetWe intend to enhance the strength of our balance sheet by targeting our level of gearingd at the lower half of the 10-20% range over time.

a Unit cash margin is net cash provided by operating activities for the relevant projects in our Exploration and Production segment, divided by the total number of barrels of oil and gas equivalent produced for the relevant projects. It excludes dividends and production for TNK-BP.

b Assuming a constant oil price of $100 per barrel.c Assuming an oil price of $100 per barrel in 2014. The projection reflects our expectation that all required payments into the $20-billion trust fund will have been completed by the end of 2012. It does not reflect any cash flows relating to other liabilities, contingent liabilities, settlements or contingent assets arising from the Gulf of Mexico oil spill which may or may not arise at that time. We are not able to reliably estimate the amount or timing of a number of contingent liabilities. See Financial statements – Note 43 on page 249 for further information.

d Gearing refers to the ratio of the group’s net debt to net debt plus equity and is a non-GAAP measure. See Financial statements – Note 35 on page 230 for further information including a reconciliation to gross debt, which is the nearest equivalent measure on an IFRS basis.

Left Lingen refinery in Germany is one of Europe’s most complex refineries due to its ability to fully upgrade crude during processing.

Operating cash flow momentum

2011 operating cash estimate at oil price of $113/bbl.

Completion ofcontributions tothe $20-billion trust fund.

Operational restoration and growth.

Divested operations and environment.

2014 operating cash estimate at oil price of $100/bbl.


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KPIsBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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KPIs –Tullow Oil5. KPIs Tullow Oil • Mix of financial and non-

financial measures • Risk impact link •  Linked to remuneration

5. KPIs Tullow Oil • Mix of financial and non-

financial measures • Risk impact link •  Linked to remuneration


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PerformanceBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Performance – Anglo American

Financial highlights

$ million (unless otherwise stated) 2011 2010

Operating profit 4,520 3,681

Kumba Iron Ore 4,397 3,396

Iron Ore Brazil (42) (97)

Samancor 165 382

EBITDA 4,733 3,856

Net operating assets 13,069 11,701

Capital expenditure 1,732 1,195

Share of Group operating profit 41% 38%

Share of Group net operating assets 30% 27%

54 Anglo American plc Annual Report 2011

IRON ORE AND MANGANESE

OPERATING AND FINANCIAL REVIEW IRON ORE AND MANGANESE

OPERATING PROFIT(2010: $3,681m)

$4,520 mSHARE OF GROUP OPERATING PROFIT(2010: 38%)

41%EBITDA(2010: $3,856 m)

$4,733 m

01 Construction of a pump station at the mine site of Minas-Rio iron ore project in Minas Gerais state, Brazil.

Chris Griffith CEO – Kumba

Paulo Castellari-Porchia CEO – Iron Ore Brazil

01

GROUP STRATEGY ACTIONS Investing – in world class assets in the most attractive commodities At our Minas-Rio iron ore project in Brazil, more than 200 km of pipeline that will transport iron ore slurry from the mine in the state of Minas Gerais to the port of Açu has been installed.

Organising – efficiently and effectively In our manganese businesses, a change in product mix, to focus on less energy intensive FeMn production, has helped offset the high cost environment experienced in the year.

Operating – safely, sustainably and responsibly Kumba had an outstanding safety performance in the year, ending 2011 fatality-free and with an LTIFR 33% below 2010.

Employing – the best people Envision, Kumba’s broad-based employee share participation scheme, which includes over 6,000 permanent employee members, reached its first maturity in 2011. At the conclusion of its first five year phase it was valued at $319 million.

Anglo American plc Annual Report 2011 55

Operating and financial review

BUSINESS OVERVIEW

Our Iron Ore portfolio principally comprises a 65.2% shareholding in Kumba Iron Ore Limited (Kumba), a leading supplier of seaborne iron ore, and Iron Ore Brazil’s 100% interest in Anglo Ferrous Minas-Rio Mineração S.A., a 49% shareholding in LLX Minas-Rio, which owns the port of Açu (currently under construction) from which iron ore from the Minas-Rio project will be exported (together, the Minas-Rio project), and a 70% interest in the Amapá iron ore system.

Kumba, listed on the Johannesburg Stock Exchange, produces a leading quality lump ore. Export ore is transported via the Sishen-Saldanha Iron Ore Export Channel to Saldanha Port. The rail and port operations are owned and operated by the South African parastatal Transnet. Kumba is well positioned to supply the high growth Asia-Pacific and Middle East markets and European steel markets in light of an expected decline in lump ore supplies from other sources.

Kumba operates three mines – Sishen mine in the Northern Cape, which produced 38.9 Mt of iron ore in 2011, Thabazimbi mine in Limpopo, with an output of 0.9 Mt, and Kolomela mine, also in the Northern Cape, which was brought into production during 2011 and produced 1.5 Mt during the year. In 2011, Kumba exported more than 85% of its total iron ore sales volumes of 43.6 Mt, with 68% of these exports destined for China and the remainder for Europe, Japan, South Korea and the Middle East.

Our Minas-Rio iron ore project is located in the states of Minas Gerais and Rio de Janeiro and will include open pit mines and a beneficiation plant in Minas Gerais producing high grade pellet feed. On completion of Phase 1, ore will be transported through a 525 kilometre slurry pipeline to the port of Açu in Rio de Janeiro state. Amapá, in Amapá state in northern Brazil, continues to ramp up its pellet feed and sinter feed production, which reached 4.8 Mt in 2011, and is expected to produce 5.5 Mt in 2012.

Our Manganese interests consist of a 40% shareholding in Samancor Holdings, which owns Hotazel Manganese Mines and Metalloys, both in South Africa, and a 40% shareholding in each of the Australian-based operations Groote Eylandt Mining Company (GEMCO) and Tasmanian Electro Metallurgical Company (TEMCO), with BHP Billiton owning 60% and having management control. Samancor is the world’s largest producer of seaborne manganese ore and is among the top

three global producers of manganese alloy. Its operations produce a combination of ores, alloys and metal from sites in South Africa and Australia.

INDUSTRY OVERVIEW

Demand for iron ore globally is linked primarily to the state of the global steel industry and, more specifically, to the steel manufacturing sector in China. The country is the largest steel producer and consumer in the world and accounts for more than two-thirds of global seaborne iron ore imports.

In 2011, global steel production increased 6% to 1.5 billion tonnes (2010: 1.4 billion tonnes), of which 685 Mt were produced in China (2010: 627 Mt), an increase of 9% (2010: 10%). China’s seaborne iron ore imports rose by 11% to 684 Mt (2010: 619 Mt). The balance of China’s iron ore needs was met by domestic iron ore production, which rose by approximately 7% to 305 Mt.

STRATEGY AND GROWTH

Anglo American’s core strategy is to grow our position in iron ore and to supply premium iron ore products against a background of declining quality global iron ore supplies. We have a unique iron ore resource profile, with extensive, high quality resource bases in South Africa and Brazil. Significant future growth will come from Minas-Rio (including expansion potential) and expansion at Kolomela.

Kumba seeks to sustainably maximise total shareholder value by enhancing the value of its current operations through the implementation of its asset optimisation programmes, capturing value across the value chain through its commercial and logistics strategy, executing its growth projects and ensuring that it has the organisational resources and capabilities to execute its strategy.

Kumba plans to grow its business organically in order to achieve production of 80 to 90 Mtpa of iron ore by 2020, 70 Mtpa from South Africa and the remainder from other countries in Africa.

Minas-Rio will capture a significant part of the high growth pellet feed market with its premium product featuring high iron content and low contaminants. Phase 1 of the Minas-Rio project will produce 26.5 Mtpa, with first production scheduled after completion and commissioning of the project, which is anticipated in the second half of 2013. During the year, civil works

Other Europe and CIS 10.6%Western Europe 1.5%

South America 19.4%North America 5.9%

Africa 4.0%

Oceania 25.7%Asia 32.9%

Source: CRU

(1) Apparent production of iron ore pellets, sinter fines and lump.

2011 Iron ore production(1)

Total 1,825 Mt

Western Europe 6.7%

North America 4.2%Other Europe and CIS 9.1%

South America 3.5%

Asia 72.5%Oceania 0.6%

Africa 0.8%

Source: CRU

(1) Apparent consumption of iron ore pellets, sinter fines and lump.

2011 Iron ore consumption(1)

Total 1,825 Mt

Unaccounted imports/stock changes 2.6%


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ResourcesBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Resources –Anglo American6. Resources AngloAmerican •  Permeates strategic discussion

6. Resources AngloAmerican •  Permeates strategic discussion


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RisksBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Risks – Tullow Oil7. Risks and uncertainties Tullow Oil • Description of risk management

framework and responsibilities •  Linkage to elsewhere in the document

for more information • Details how the group responds to

changing risk •  Summary table of principal risks and

performance • Detailed tables include performance

indicator, executive responsibility, impact, policy and systems, mitigation process and progress in the year


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SustainabilityBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Sustainability – Xstrata

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Delivering sustainable excellence

To succeed in our aim of delivering sustainable value to all of our stakeholders, we must balance economic, environmental and social considerations in managing our business.

As our business strategy has progressed from primarily acquisition-led growth to organic growth, we have refined our safety management focus and priorities accordingly. We make no distinction between the safety of our contractors and that of our employees. We work collaboratively with our major contractors on each project, sharing experiences and skills to enhance each other’s safety management systems.

We identify, reduce and, when possible, eliminate any significant environmental impact from our mining, metallurgical and exploration activities. We identify opportunities and undertake initiatives to protect and improve our operating landscapes. The core of our management approach is to preserve and restore the natural environments we operate in throughout our activities’ lifecycle.

Our activities and investments create lasting social and economic benefits for the communities and countries in which we operate that extend beyond jobs and taxes to include skills and enterprise development, improved infrastructure and enhanced access to education and health services, amongst others.

We operate our business in a manner that is economically, socially and environmentally sustainable over the long term. We believe that excellence in sustainable development is a source of competitive advantage, enhancing our corporate reputation and providing direct business benefits that are essential for delivering our strategy, including:

– gaining access to new resources;

– maintaining a ‘licence to operate’ from society and enhancing the security of our operations;

– attracting and retaining the best people;

– accessing diverse and low-cost sources of capital; and

– identifying and managing new business opportunities and risks.

We aim to operate a safe and healthy workplace. We believe that every work-related illness and injury is preventable and so our primary objective is to operate without fatalities and injuries.

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We work in partnership with government, NGOs, international donors and others to support the development of small-and medium-sized businesses and alternative income-generating opportunities.

At least 1% of our profits before tax is set aside every year to fund initiatives that benefit the communities in which we operate. We support local culture and arts projects, programmes to

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boost community development, enterprise and job creation, health and education initiatives and environmental schemes. We set aside $109 million in 2011.

OOur ur eeconconoommiicc cocontrntriibbuuttiioonn

Total reveTotal revenuenue

$$505505mmEconomic vaEconomic vallue retaineue retainedd

$16,831$16,831mmPaPaymymyyyy ent ent toto supp supplliersiers

$33,$33,878777mmRReveevennuuee

$3$3,,454454mmEmEmplplpppp oyee wages and beneoyee wages and benefifittss

$$3,5083,508mmPPayments to governmentayments to government

$1,314$1,314mmPaymentsPayments to to providers oproviders off c capapppitalital

$$100100mmCorCorpporate sociaorate sociall invo invollvement (casvement (cashh s sppenend)d)

$8$8,,165m165mCCapital expendapital expendititururee


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GovernanceBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Governance – Antofagasta

Antofagasta plc Annual Report and Financial Statements 201172

Governance: Corporate governance report

Key Board activities in 2011Appointment of three new Directors to the Board, who bring a considerable range of experience and expertise in the international mining sector, with many years of operational, financial, strategic and corporate finance experience across a wide range of countries.

Approval of key steps in the Group’s growth plans, with approval of the Antucoya project and initiation of the feasibility study for the Centinela District and pre-feasibility study for the Los Pelambres District.

Approved updated Ethics Code, which was launched by the Chairman.

Ongoing review and monitoring of operational performance, including the ramp-up of Esperanza.

Reviewed the Group’s ongoing capital management, including approving total dividends of US$1.1 billion which were paid out to shareholders during 2011.

“Good governance is central to our business, and we believe that it is core to the Group’s ongoing development. For Antofagasta good governance is much more than a matter of compliance – it is about having the right people, culture and structures in place to make sure we make the right decisions for our business and for our shareholders. We strive to instill a culture throughout the Group which reflects our core principles of respect, honesty and transparency. In this report we discuss the key features of the governance structures, processes and people we have in place in order to achieve our objectives.”

Jean-Paul Luksic Chairman

Overview

Antofagasta plc Annual Report and Financial Statements 2011 73Strategic review

Operational reviewFinancial review

GovernanceFinancial statem

entsOther inform

ationOverview

Our governance structureThe Antofagasta plc Board (“the Board”) is collectively responsible for the long-term success of the Group. It is responsible for the leadership and strategic direction of the Group, and for oversight of the Group’s performance, its risks and internal control systems. The Board is assisted in the performance of its responsibilities by its four committees – the Audit and Risk Committee, the Remuneration and Talent Committee, the Nomination Committee and the Sustainability and Stakeholder Management Committee. More detail of the role of the Board and its committees is set out below.

The Group’s businesses are divided into three divisions – mining, transport and water. The mining division represents over 90% of the Group’s earnings.

Compliance with the UK Corporate Governance CodeThe Company now reports under the UK Corporate Governance Code (the 2010 Code) which sets out governance recommendations and best practice provisions which apply to UK listed companies. The 2010 code applies in place of the Combined Code on Corporate Governance. The Company is required to report on the extent to which it complies with the main principles and the provisions of the UK Corporate Governance Code and explain the reasons for any non-compliance.

The Company complied with the detailed code provisions contained in the UK Corporate Governance Code throughout 2011 except as follows:

– the Board did not have a separately identified Chief Executive and hence at Board level there is no formal separation of the functions of Chairman and Chief Executive (provision A.2.1). The Board considers that its predominantly non-executive composition combined with the delegation of significant responsibility for operational management to a divisional level achieves an appropriate balance and prevents a concentration of power in its Executive Chairman;

– performance-related pay measures did not apply to Board members (principle D1). The Board considers this appropriate given its predominantly non-executive composition and the role of the only Executive Director, who is a member of the controlling family, as Chairman of the Board. Performance-related remuneration structures are in place for senior executive management in the Group; and

– Charles Bailey retired from the Board and also therefore from the Audit and Risk Committee, the Remuneration and Talent Committee and the Nomination Committee on 8 June 2011. Additional appointments were made to those Committees with effect from 1 July 2011, however for the intervening 22 days the Audit and Risk Committee and the Remuneration and Talent Committee did not comprise three independent Non-Executive Directors (provisions C.3.1 and D.2.1) and the Nomination Committee did not comprise a majority of independent Non-Executive Directors (provision B.2.1). No committee meetings were held during this intervening 22-day period.

Antofagasta plc Board and Committees

Business Divisions/Divisional Boards

Mining Division Corporate Centre

Mining Division Subsidiary Companies/Boards

Audit and Risk CommitteePage 78

Sustainability and Stakeholder

Management CommitteePage 81

Nomination CommitteePage 80

Remuneration and Talent CommitteePage 82

Antofagasta plc Board

Transport WaterMining

Executive Committee

Business Development Committee

CEO and Vice-Presidents


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Reporting centreBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries



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Reporting centre – Rio Tinto2. Reporting Centres Rio Tinto •  Includes top line messages with simple navigation to the

reports


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Questions, questions, questions…

43

Corporate communications: An introduction to MerchantCantosBest practice narrative reporting: Managing reputation in the Oil, Gas and Mining Industries

Thank youRichard CarpenterManaging PartnerT: +44 (0)20 7396 3581E: [email protected]