Sustainability / Governance

Governance, ethics and engagement

Stringent governance mechanisms and high levels of ethical performance are important elements in establishing and maintaining Xstrata’s reputation as a responsible and trusted developer of resources, business partner, employer, and corporate citizen.

Xstrata is committed to robust and accountable corporate governance, as set out in the Group’s Statement of Business Principles. Stringent governance mechanisms and high levels of ethical performance are important elements in establishing and maintaining Xstrata’s reputation as a responsible and trusted developer of resources, business partner, employer, and corporate citizen. We identify and engage with all stakeholders in our business in an equitable, transparent and culturally appropriate manner in respect of their concerns and expectations with regard to Xstrata’s operations, activities and products.

The Xstrata Board sets and reviews Sustainable Development Policy globally. Xstrata’s Board Health Safety Environment and Community (HSEC) Committee was established in 2005 to assist the Board in its HSEC responsibilities and to provide guidance on sustainable development issues. The chief executives of our commodity business are represented on the Group Executive Committee, which is formally responsible for sustainability strategy development and implementation. The Board provides oversight of the Executive Committee’s performance.

The Board HSEC Committee is chaired by Ian Strachan, independent Non-Executive Director. David Rough, Senior Independent Director and Deputy Chairman, Claude Lamoureux, independent Non-Executive Director, and Mick Davis, Xstrata plc Chief Executive are also members of the Committee.

The Board HSEC Committee meets quarterly to review and evaluate reports from the commodity businesses on their performance in implementing Xstrata’s Sustainable Development Policy and Standards and benchmarks our performance against other mining and extractives sector companies. At each formal meeting, the Chief Executive of one of Xstrata’s commodity businesses presents the sustainability strategy of the business, an overview of social, environmental and ethical risk management, future targets and performance.

Key performance indicators, critical and high potential risk incidents and sustainable development assurance programme results are reported to all Board members on a quarterly basis and to the Executive Committee on a monthly basis. Board members are provided with independent briefings on social, ethical and environmental issues as required and are able to consult with external experts at Xstrata’s expense.

Implementation

The Group General Manager Sustainable Development (Group GM SD), who reports to the Group Chief Executive, oversees the implementation of Xstrata’s Sustainable Development framework.

Xstrata operates a highly devolved management model. Each commodity business is governed by a Board and Executive Committee. Commodity business Executive Committees comprise a specific Sustainable Development Committee to provide additional focus and guidance on sustainable development strategy and issues.

The proportion of remuneration determined by sustainable development criteria varies between commodity businesses and regions. For mine supervisors and operational employees, up to 80% of total bonus awards is determined by SD performance.

Last Modified on July 21 2009, 14:02:26 PST

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