Gold Fields board rebukes CEO for empowerment deal controversy
Holland forgoes bonus but partners in secretive transaction will remain
GOLD Fields CEO Nick Holland and his management team have been “strongly censured” for the way they handled the controversy around the empowerment deal at its South Deep gold mine.
Mr Holland had told the board he would forgo his bonus this year due to his role in mishandling the matter in public, and the board had accepted his offer.
His bonus for this year will only be decided next April, but for 2012 he received a R8.46m bonus out of a total package of R45m.
Gold Fields chairwoman Cheryl Carolus said yesterday the formal examination of the 2010 deal, which included key figures in the African National Congress (ANC) and involved convicted bank robber Gayton McKenzie as an adviser, had been concluded.
Mr Holland and his management team, which had been involved in setting up the deal, came in for criticism from the board, which investigated the transaction and involved law firms locally and abroad.
The findings would not be made public despite the board concluding that it had to improve its transparency, said Ms Carolus, a former anti-apartheid activist and member of the ANC.
It is understood there is no single final report, but the board came to its conclusions after hear- ing presentations over three days from law firms that had investigated the deal. The presentations were subject to legal privilege and would not be made public.
“We’re quite comfortable that we have examined the facts quite carefully and no further steps are necessary,” Ms Carolus said.
Asked if Gold Fields was not at risk of being accused of shielding management or of a “whitewash”, she said: “I can promise you that I
will not put myself at risk of going to jail for Nick Holland— as nice and as decent a person as he is. I’ve been to jail before and I’m not about to do so again. We have censured management quite strongly about their communications,” she said.
The investigation revealed shortcomings that Gold Fields’ board will have to urgently address as it expands in Australia and elsewhere. “The areas that should worry us are around deficiencies in our internal processes, particularly around timely communication between board and management, and issues of transparency,” Ms Carolus said.
“As a board, we felt we were poorly served,” she said, and the company felt its reputation had been damaged by the way management had handled the matter in public.
The board criticised Mr Holland’s decision to not disclose the beneficiaries of the transaction, despite requests from numerous media outlets for the list to be made public and which led to negative stories about the deal.
“It looked like, if we were being foolish about that then, what on earth else were we being cagey about,” Ms Carolus said. “It was a very bad judgment call and goes against the transparency principle. We want to be seen as people who will not lie to anybody.”
The board would take lessons from its past experiences.
“The big thing that hit us right between the eyes is that we are going to have to get a lot more up to speed in training the board in the jurisdictions in which we operate, particularly around areas of corruption and compliance,” she said.
No evidence was found of wrongdoing by those in Gold Fields involved in drawing up the transaction. “If we had any reason to believe there was wrongdoing, I promise you we would not have hesitated one minute in acting,” Ms Carolus said. “We really have to tighten up our internal processes because those can spell a lot of trouble for us down the line.”
She declined to comment on former chairwoman Mamphela Ramphele’s comments that a list of preferred candidates had been “shoved down” Gold Fields’ throat with the threat that it would not secure a mining right if it did not include them.
The board was satisfied with the composition of the empowerment partners, with controversial figures making up just a small percentage of the beneficiaries, she said.