Anglogold Ashanti: Analysis of Csr Strategy

AngloGold Ashanti An Analysis of CSR Strategy & Performance Essay 1 By: S. BLIDI ELLIOTT Index No. : EMBA 10110042 Course: Ethics, Social Responsibility and Governance Course No. : EMBA 663 Lecturer: Dr. Judy N. Muthuri Date: September 28, 2012 Word Count: 5,709 This essay is the first of a two-part series critically examining the corporate social responsibility (CSR) strategy and performance of AngloGold Ashanti (AGA). This first essay analyses the company’s CSR strategy and activities against the yard sticks provided by the Ghana Business Code and the Global Reporting Initiative (GRI).

In analyzing AGA’s strategy, we explore the likely motivating factors driving the company’s CSR activities and how these drivers inform AngloGold’s responsiveness to environmental, social and other stakeholder issues. In evaluating AGA’s CSR reporting and performance, we present a background of the company followed by an overview of the company’s CSR strategy and analysis of whether that strategy conforms to accepted standards.

This essay is written in partial fulfillment of the course requirements of the Ethics, Social Responsibility and Governance module (EMBA 663) of the Executive Masters in Business Administration program of the Ghana Institute of Management and Public Administration. ANGLOGOLD ASHANTI – AN OVERVIEW AngloGold Ashanti is a multinational corporation headquartered in South Africa with various mining operations in ten countries spread across Africa, Asia, and the Americas. The company’s primary activity is gold mining, though silver and uranium, among other by products, are produced in the process of extracting the gold from the ore bodies.

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In 2011, AngloGold reported sales of $6. 6 billion from 4. 33 million ounces of gold produced with a workforce of close to 70,000 persons across four continents. AGA is a truly global company with market capitalization of $16. 2 billion and listings on stock exchanges in AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 2 Johannesburg, Accra, London, Sidney and New York. The company is majority owned by shareholders in the USA (47. 9%) and South Africa (27. 9%), with the rest of the shares distributed throughout the world, including a 1. % shareholding by the Government of Ghana (AGA Sustainability Report, 2011: 5-10). AngloGold produces dore (unrefined gold bars) at its worldwide operations for sale mainly to gold refineries which sell on to bullion banks and jewelers. Like others in the industry, AGA has benefitted from recent increasing demand for gold as a store of value. This demand has been driven over the last few years by the worldwide economic downturn and banking crisis which have made investors wary of unstable currency and equity markets.

This essay focuses on AGA’s operations in Ghana, where the company operates two mining properties in the west of the country at Iduapriem and Obuasi. These operations account for 11. 8% of the company’s global production and revenues (AGA Sustainability Report, 2011: 22) Located in the Ashanti and Western Regions of Ghana, Iduapriem and Obuasi were the main targets of the merger between AngloGold Limited of South Africa and Ashanti Goldfields Limited of Ghana to form the current company, AngloGold Ashanti, in 2004.

SUSTAINABILITY STRATEGY AngloGold Ashanti provides extensive, publicly available information about what the company calls its “sustainability” strategy and programs. The company’s “Sustainability Report 2011 – Sustainable Gold” (www. aga-reports. com/11/sustainability-report/home) is one part of AGA’s “Integrated Report 2011 – Pure Gold” which also includes the company’s Annual Financial Statements and a Mineral Resources and Ore Reserve Report. The company says its Integrated Report is in compliance with South Africa’s King Code on Corporate AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 3

Governance 2009 (http://african. ipapercms. dk/IOD/KINGIII/kingiiicode/) which mandates companies operating in South Africa to issue a triple bottom line report on financial and sustainability performance. The King III Code further encourages companies to tailor their sustainability reports according to the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines (www. globalreporting. org/reporting/latest-guidelines/g3-guidelines).

AngloGold Ashanti appears to have gone to great lengths to remain compliant with the intent of King III Code by presenting sustainability and financial data as an integral part of the company’s governance and business strategy with strong emphasis on the company’s responsiveness to stakeholder issues. The company’s compliant posture is also evident in its reported reliance on the GRI Guidelines, the principles of the UN Global Compact (http://www. unglobalcompact. org/), and the Sustainable Development Framework of the industry body, the International Council on Mining and Metals (ICMM) http://www. icmm. com/our-work/sustainable-development-framework). While AGA does not specifically mention the Ghana Business Code, acceptance of the principles of the UN Global Compact amounts to acceptance of the Ghana Code which is nearly a verbatim rendition of the Global Compact. AngloGold Ashanti in its Sustainability Report 2011 expresses a mission to: To create value for our shareholders, our employees and our business and social partners through safely and responsibly exploring, mining and marketing our products.

Our primary focus is gold and we will pursue value creating opportunities in other minerals where we can leverage our existing assets, skills and experience to enhance the delivery of value. This mission statement gives early insight that the company’s CSR strategy is largely driven by an instrumental motivation (Maignan & Ralston, 2002: 498) to achieve performance objectives – creating value. A reading of the company’s values statement enhances this impression of a firm focused on CSR as a means to achieve strategic business objectives. AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 4

AngloGold’s stated values are closely aligned with the 10 principles of the Ghana Business Code (Ghana Business Code, 2006). The firm’s first value statement “Safety is our first value”1 speaks of health and safety at the workplace in alignment with the principles on human rights and labour standards of the Ghana Business Code and the UN Global Compact. The second value statement “We treat each other with dignity and respect” deals with honesty and ethical business and social practices and is aligned with the human rights, labour and anti-corruption principles of the Ghana Code.

AngloGold declares its intent to respect the Global Compact (and by extension the Ghana Code) in its other statements concerning the company’s value for diversity and its respect for the environment. Two of the company’s value statements are particularly noteworthy as they speak directly to the company’s sustainability strategy. In value statement 4, the company declares “We are accountable for our actions and undertake to deliver on our commitments”. This statement goes to the core of what some writers (eg.

Crane, Matten & Spence, 2008:5) see to be an essence of corporate social responsibility – companies being accountable for negative impacts of their actions and taking the appropriate corrective and, in the best case, preventive measures. AngloGold’s value statement 5 “The communities and societies in which we operate will be better off for AngloGold Ashanti having been there” is a powerful statement of commitment by the company to go beyond the scope of its legal and economic responsibilities into the higher realms of “Carroll’s Pyramid of CSR” (Branco & Rodrigues, 2007:10). See Appendix for full text of AngloGold Ashanti’s Mission, Vision and Values Statements AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 5 AngloGold Ashanti’s Sustainability Report 2011 is a centralized, group level report, but its supplementary sustainability data and country reports provide a localized perspective of the company’s CSR performance, with particular reference to its performance in Ghana.

ANGLOGOLD ASHANTI CSR REPORTING AND THE GRI The Global Reporting Initiative was established in 1997 with a mission to provide a common framework for CSR reporting based on globally accepted principles, concepts and metrics (Hedberg & Malmborg, 2003: 155). The Guidelines give firms a template for the content and presentation of their CSR reports to enable comparison with other such reports. The Guidelines are divided into two parts covering the reporting principles and guidance and the standard disclosures (https://www. globalreporting. org/resourcelibrary/G3-Guidelines-InclTechnical-Protocol. df). Part 1 of the Guidelines give guidance to firms on how to determine the content of reports based on principles of materiality, stakeholder inclusiveness, sustainability context and completeness. This Part also intends to help firms maintain the quality of their reports with regard to accuracy, timeliness, reliability and clarity. The overall objective is for reports to not only present the issues affecting individual firms, but how the firms’ social, economic and environmental performance contributes to sustainable development at the global level.

Part 2 of the guidelines covers standard disclosures expected of companies in terms of their strategy and profile, approach of management to CSR issues and a common set of performance indicators. Disclosures on strategy are intended to establish the link between the firm’s business strategy and its governance and sustainability performance. AngloGold Ashanti appears to have embraced the GRI Guidelines in an effort to communicate its adherence to widely accepted CSR principles and processes. Hedberg and

AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 6 Malmborg (2003: 153) have suggested that a firm’s use of the GRI Guidelines is often motivated by the firm’s need to “seek organizational legitimacy” by using a globally respected template that would lend credibility to the company’s reports. AngloGold gives itself an A+ rating for adherence to the GRI Guidelines, meaning the company believes that its sustainability report includes reporting on all indicators of relevance to the GRI.

In closely examining the AGA report for 2011, it is clear that AngloGold has closely followed the guidelines on what content to include and how to include it in keeping with the Standard Disclosures of the GRI. The first section of the Standard Disclosures calls for presentation of a high level analysis of the company’s strategy. AngloGold’s Sustainability Report 2011 adheres to this guideline through a statement from AngloGold CEO Mark Cutifani (AGA Sustainability Report, 2011:12) outlining the company’s vision and how this vision links with the company’s business strategy and sustainability performance.

He outlines key focus areas for the company’s strategy, including health and safety for employees and business stakeholders, minimizing the environmental impact of operations, protection of human rights, maintaining efficiency in production, controlling costs, maximizing returns and “delivering value” to community stakeholders. AGA believes these strategic focus areas are consistent with the company’s definition of sustainable development because they cover the social, economic and environmental issues of most concern to the company and its stakeholders (AGA Sustainability Report, 2011:13).

Stakeholder pressure from a negative duty perspective (Maignan & Ralston, 2002:498) is evident when the CEO reports that “to our key stakeholders it appears we may have taken our local communities and the various levels of government for granted” (AGA Sustainability Report, 2011:13). This pressure from local communities, particularly communities around the AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 7 ompany’s operations at Obuasi and Iduapriem in Ghana, has pushed AGA to declare that its CSR strategy is centered on the concept of “rebuilding trust with local communities, regulatory authorities and government leaders” (AGA Sustainability Report, 2011:13) through an approach of creating mutually beneficial value for the company and the communities in which it operates. In line with the GRI Standard Disclosures, the CEO statement affirms engagement with a wide range of stakeholders including the Extractive Industries Transparency Initiative (EITI) and the United Nations Global Compact in developing its CSR strategy and performance.

AngloGold further identifies the key risks and impacts on sustainability and the effects on stakeholders that would affect the company’s long term performance. Among risks and sustainability trends of concern to the company is the issue of ‘resource nationalism’ which AngloGold describes as the tendency for governments to demand more returns from companies involved in extractive industries (AGA Sustainability Report, 2011:13). This resource nationalism is expressed through mining code revisions, increased royalty ayments and taxes, and increased demand for companies’ direct contribution to development initiatives. A related risk, from AngloGold’s perspective, is the issue of increased community activism around land use and availability of water. The company commits itself, in its 2011 report, to improve its performance in the areas of water and land use, waste disposal and environmental management. In conformity with the GRI, these commitments are expressed as performance targets which the company considers to be essential for its long term survival.

AngloGold’s sustainability report provides extensive information profiling the company in keeping with section two of the GRI Standard Disclosures. The profile includes key information on shareholders, production levels, net sales, number of employees, AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 8 capitalization, and breakdown of all indicators by region and country operations, among other performance indicators. The company, in conformity with EITI, reports all payments to the Government of Ghana and local administrations (http://www. aga- reports. om/11/pdf/ghana. pdf). GRI guidelines provide specific environmental indicators required to be reported on by firms. AngloGold provides detailed data on reportable environmental incidents, energy efficiency, water use efficiency, greenhouse gas emissions and cyanide certification (AGA Sustainability Report, 2011: 6-7). The issue of water is of critical concern at AngloGold’s Ghana operations, because of what the company describes as Ghana’s high levels of rainfall and water run-off which make implementation of ‘closed loop’ systems for recycling water unfeasible.

Gold mining operations require huge quantities of water which brings these operations into competition with community agricultural programs for this often scarce resource. AngloGold admits that mismanagement of water supply and quality can have severe impacts on gold production as well as on the health of mining communities. In its Ghana Fact Sheet, the company says “water quality and usage are of concern globally, but are particularly significant for operations in Ghana, where there is significant potential environmental and social impact and a high level of stakeholder scrutiny” (http://www. ga-reports. com/11/pdf/ghana. pdf). The company agrees, in its 2011 report, that its suboptimal management of water in Ghana has led to disputes with local communities, and that greater efforts are being put into place to address these shortcomings through what AGA calls its Global Strategy for Water Security. The GRI guidelines also encourage companies to report on a range of social performance indicators regarding labour practices, human rights and other societal concerns.

The guidelines make reference to several internationally recognized standards and protocols, AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 9 particularly the International Labour Organization (ILO) Tripartite Declaration Concerning Multinational Enterprises and Social Policy, the Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises, the United Nations Universal Declaration of Human Rights and the United Nations Conventions on Civil, Human, Political, Social and Cultural Rights.

AngloGold’s close adherence to the GRI Guidelines may be laudable, but leaves questions as to the company’s motivations. Hedberg & Malmborg in their work on the use of the GRI guidelines among companies in Sweden, suggest that companies are motivated to use the guidelines to “provide a good and established structure for their reports” (2003:159) in order to seek societal legitimacy, and that a main reason the guidelines are used is to get a proper design for their reports.

Because the Guidelines give firms leeway to choose the level and depth of their reporting, and that little if any verification of reports is done by GRI, Hedberg and Malmborg suggest the Guidelines may lack a certain credibility which may negatively impact the company in the long term (2003: 163). Given the above perception of the credibility challenges of the GRI Guidelines, AngloGold’s CSR strategy needs to be subjected to closer scrutiny, beginning with an analysis of the company’s stakeholders and the stakeholder issues that drive AGA’s CSR strategy and activities.

STAKEHOLDERS Branco and Rodrigues in their paper on stakeholder theory and CSR remark that stakeholder theory is “inescapable if one wants to discuss and analyze CSR” (2007: 5). Maignan & Ralston, in discussing CSR motivations, speak of a negative duty approach by which companies engage in CSR activities because of legitimacy issues and stakeholder pressure (2002: 498). Woods (1991:703-705) in her corporate social performance model, emphasizes AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 10 he vital role of stakeholder management in a firm’s processes of social responsiveness. Stakeholder theory makes the case that CSR performance is driven by a firm’s need to respond to and satisfy the interests of its stakeholders. Branco and Rodrigues point further to the tendency of firms to pay greater attention to their primary stakeholders as opposed to the issues of secondary stakeholders who are not necessarily “essential for a firm’s survival” (2007:7).

As a multinational company operating labor-intensive operations on four continents, and with listings on multiple stock exchanges, AngloGold Ashanti must tread carefully in order to be responsive to conflicting stakeholder issues while maintaining its focus on its fiduciary responsibility to primary stakeholders, particularly the company’s shareholders. The company’s stakeholder management strategy appears to be based on what the company describes as the “risks and drivers” that allow its operations to be successful and create mutual value for its shareholders and communities.

The company says its stakeholder engagement policy intends to assure that its operations continue to meet performance targets while generating returns for its shareholders and community stakeholders. This approach speaks directly to the “instrumental” dimension of CSR as explained by Maignan & Ralston (2002:498). An instrumental approach from a negative duty perspective implies that AngloGold pursues stakeholder engagement, and indeed its entire CSR strategy, because it is compelled to do so by stakeholder expectations and pressure, and not out of any altruistic principles.

This explains the strong motivation for the company to manage stakeholders to avoid negative impacts and risks to its operations that would be detrimental to its financial performance. This is an approach that can be observed in all aspects of the company’s stated CSR strategy, which may prompt cynics, as Ghillyer notes, to “see these initiatives as public AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 11 elations exercises with no real evidence of dramatic changes in the core operating philosophies…” (2008:62). AngloGold Chairman Tito Mboweni, in a sustainability statement in the company’s Integrated Report (2011:8) says “being a good corporate citizen, as we seek to be, is a prerequisite for being a successful miner” and that “governments and their citizens are entitled to expect not only a fair fiscal return but also a mutually respectful and beneficial relationship between them and the companies…”.

He however goes on to caution that “pushed too far, though, raised taxes and royalty rates will begin to discourage investment and reduce the overall value of the industry to both societies and shareholders. The regulatory environment is becoming increasingly complex and onerous. ” The influence of stakeholders can be observed in the key issues driving AngloGold’s CSR strategy and emphasized in its Sustainability Report 2011. One such issue is what the company calls the trend toward greater “resource nationalism” among its stakeholder governments in the jurisdictions in which the company operates.

The risk of resource nationalism impacts the company in terms of the increased community pressure on AngloGold to make explicit the benefits of its mining activities for communities and national economies, the increased community activism about access to and fair value received for scarce natural resources, and increased demand for higher tax and royalty payments to governments. AngloGold reports that it is responding to this stakeholder issue by developing a general framework to approach development in a more organized and systematic way.

The company reports that it has increased its community investments in partnership with communities and local government administrations in an effort to demonstrate the benefits of what the company calls “responsible mining”. These measures can be seen as the company’s attempt to secure and maintain its legitimacy and social license to operate. AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 12 Artisanal and small-scale mining is another issue that has driven AGA’s corporate social response. This issue has particular resonance in Ghana where AGA mines properties which have for a great many years been mined by community members.

The conflicts that have resulted from small-scale mining encroachments on AngloGold concession areas have led to charges of human rights violations against the company. These violations have included allegations of deaths resulting from AngloGold security interventions in “illegal” mining activities on the company’s concession area. In response to this stakeholder issue, AngloGold reports that it has become involved with initiatives in Ghana and at other operations to “formalize artisanal and small-scale mining in a way which will benefit local economies and create sustainable livelihoods” (AGA Sustainability Report 2011:16).

The company says it is also cooperating with host governments to address the economic causes of illegal mining, and with international and industry organizations to develop common approaches. Of concern to AngloGold is the Dodd-Frank Act of the United States which requires the US Securities and Exchange Commission (SEC) to establish rules requiring certain companies to disclose their involvement with conflict minerals, particularly from the Democratic Republic of Congo where AngloGold maintains gold mining operations http://www. sec. gov/news/press/2012/2012-163. htm). The activities of illegal miners near AGA operations has the potential, the company believes, to taint the gold legally mined by AGA, especially in light of the global trend among consumers for “responsible gold” (AGA Sustainability Report, 2011:19) that does not contribute to conflict and human rights violations. AGA’s listing on the New York Stock Exchange makes it accountable to conform to the SEC’s rulings. AngloGold Ashanti: Analysis of CSR Strategy & Performance

Page 13 Health and safety is another multi-stakeholder issue emphasized by AngloGold in its 2011 report. The company reports that “safety and health are not only business imperatives, but are part of our obligation to operate with respect for human rights”. The health and safety of the company’s employees and the communities in which it operates is a pressing issue for nongovernmental organizations (NGO), governments and multilateral institutions interested in protecting the rights and preventing the exploitation of workers.

AngloGold says it respects and values the ten principles of the UN Global Compact and the Voluntary Principles on Security and Human Rights (VPSHR) in the development of a “safety transformation framework” to address its less than adequate health and safety performance. The company lists safety as its first value and has set firm targets for reducing work related accident, injury and health frequency rates by 2015 (AGA Sustainability Report, 2011:11).

The company’s malaria control program at Obuasi, Ghana, has received commendation from Ghana’s malaria control program and a $138 million grant from the Global Fund to Fight Aids, Tuberculosis and Malaria to enable the company step up intervention across Ghana. Ghana’s Daily Graphic newspaper reported in September 2012 (http://www. ghana. gov. gh/index. php/news/features/16095-anglogold-malaria-control-projectbenefits-40-districts) that AngloGold’s malaria program was set to benefit 40 communities in the Upper West, Upper East, Northern, Central and Ashanti regions of the country.

Environmental and natural resource management is a prominent part of AngloGold’s CSR reporting in response to stakeholder interest, especially in Ghana where the company’s contamination of community water resources has been a contentious issue for many years. The company has accepted its liability for polluting the rivers around its Obuasi and Iduapriem operations in Ghana. The drastic situation resulted in the suspension of the company’s operations by the Ghana Environmental Protection Agency in 2007. The company

AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 14 claims these environmental issues are legacy problems which are being addressed through the implementation of more technologically advanced water management techniques (AGA Ghana Fact Sheet, 2011:4). AngloGold claims to have made extensive efforts to improve its CSR performance in Ghana particularly regarding land and water use, environmental protection and community investment. In 2011, the company commissioned an “independent” sustainability review panel to assess its performance in Ghana.

The panel reported, in part, that “success at Obuasi requires that the company address Obuasi systematically in its planning, its engagement and communications, its investments, its governance and its development of capabilities” (AGA Sustainability Report 2011: 23). The challenges faced by the company in CSR performance in Ghana were highlighted in 2011 when the company was given the dishonor of receiving the Public Eye Award for 2011 for the company’s “irresponsible corporate behavior” (Public Eye Awards, 2011).

The Public Eye Awards are run by Berne Foundation and Greenpeace to coincide with the annual World Economic Forum at Davos and call attention to CSR issues by naming and shaming multinationals seen to be culpable in environmental and social issues. The citation for the ‘award’ claimed that: The South African mining company AngloGold Ashanti contaminates land and people with its gold mining in Ghana. To extract 30 kg (66 lb) of gold, 6,000 tons of rock are mined every day, then ground up and mixed with cyanide in tanks.

The highly-toxic mining waste is kept in large storage ponds that contaminate rivers and wells, as well as all those who (must) drink from them. Where there was once cultivated land, now the ground is contaminated and can no longer be farmed. In addition, in the company’s own guard houses, several suspects were tortured, and dogs were set on people; there have been fatalities as a result. Although the ecological and social problems in the mines – some mines are up to 100 years old – have been documented by authorities, NGOs and the company itself – and even AngloGold Ashanti committed itself in 2004 to improve

AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 15 the situation – things have in fact worsened since then. No wonder AngloGold Ashanti received the worst possible rating for social and environmental protection from the Ghanaian Environmental Protection Agency in a recent industry comparison. AngloGold has responded by claiming that its Public Eye award was “undeserved” and that its environmental and human rights record in Ghana should be seen in the context of the over 100 years of mining in Ghana using methods which are not acceptable by today’s standards.

The company claims that it has invested heavily to improve the infrastructure and processes at its Ghana mines and that resolving all legacy issues would require more time (www. ghanachamberofmines. org/site/news/details. php? id=33). The company says it has worked closely with Ghana’s Environmental Protection Agency (EPA) to remedy environmental concerns, but the EPA’s AKOBEN Programme (http://www. epaghanaakoben. org/) in 2010 gave AngloGold AKOBEN’s lowest overall rating of “Red”, indicating poor performance in environmental management.

AKOBEN is an initiative of the Ghana EPA to monitor, evaluate and disclose environmental and social performance. The AKOBEN rating appears to buttress a 2011 report by Ghana’s Centre for Environmental Impact Assessment (CEIA) which alleged that discharge from AngloGold operations in Obuasi and Tarkwa had polluted some 262 streams with resulting high incidence of keratosis, other skin diseases and type II diabetes (http://environmentalwatchman. blogspot. com/2011/08/mining-activities... ). This report has not been independently confirmed.

The negative impact of AngloGold’s gold mining on the environment, agricultural productivity and the livelihoods of Ghanaian communities has been extensively researched by Aragon and Rud who have reported that “…we find that mining has reduced agricultural productivity by almost 40%. This result is driven by polluting mines, not by input availability… we find that the mining activity is associated with an increase in poverty, child AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 16 malnutrition and respiratory diseases…the actual fiscal contribution of ining would not have been enough to compensate affected populations” (2012:1). These negative reports tend to give credence to a criticism of CSR reporting as being window dressing far removed from actual performance. Haigh and Jones argue that there are “inherent contradictions between the pursuit of economic growth and goals of ecological maintenance and social justice” (2006:1) and that managers would not expend resources on CSR if they do not expect CSR to maximize “the gap between revenues and relevant costs” (2006:2).

Haigh and Jones contend that companies have a “Business first (profit and market share) and Society second (other stakeholders in line after stockholders)” (2006:3) approach, suggesting that a firm’s CSR performance is a reaction to “first mover CSR strategies of competitors” out of fear of losing market position (2006:2). The Haigh and Jones argument does not detract from Woods who asserts that corporate social performance (CSP) is not “completely distinct from business performance” (1991:693).

In Woods’ model of CSP, a company’s performance should be evaluated on the basis of the social responsibility principles motivating the company, the extent to which that company uses CSP processes and the societal impact of that company’s programs and activities (1991:693). AngloGold’s CSR reporting appears to be fairly consistent with the Woods CSP model. The company seeks to secure its license to operate and establish its legitimacy through its stated compliance with legal, economic and regulatory requirements.

This is the expected behavior of a firm in line with the institutional principle of Woods’ model (1991:695). Woods’ organizational principle of public responsibility is expressed in AngloGold’s acceptance of responsibility for the negative outcomes of the company’s activities, as indicated, for AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 17 example, in AngloGold’s actions to clean up and prevent continued pollution of waterways in Ghana.

Woods’ managerial discretion principle is articulated in the statements of AngloGold’s CEO and Chairman reaffirming the company’s commitment to be a good corporate citizen as expressed in the company’s philanthropic contributions to communities and the company’s community investments in feeder road repairs, health programs, youth apprenticeship programs, sustainable alternative livelihoods programs and other activities intended to improve the communities’ quality of life, above and beyond the company’s legal obligations.

The second facet of Woods’ CSP model concerns a company’s use of processes of corporate social responsiveness. Woods says that “responsiveness complements but does not replace responsibility” and that “responsiveness provides an action counterpoint to the principled reflection of social responsibility” (1991:703). AngloGold appears to fulfill the three conditions Woods identifies as being characteristic of a socially responsive firm: 1) The company monitors and assesses environmental conditions 2) it actively manages its stakeholders and 3) manages the resultant stakeholder issues.

AngloGold’s Sustainability Report 2011 is a testament to the depth of environmental scanning engaged in by the company in determining the risks and opportunities impacting the company. An extensive appraisal was done earlier in this paper of the company’s management of its stakeholders and stakeholder issues. It can safely be concluded, based on the company’s reporting, that AngloGold is a socially responsive firm.

The third facet of Woods’ model involves the observable impacts of a company’s programs and policies (1991:708). The impacts of AngloGold’s CSR activities may be evaluated through the company’s reporting against social indicators such as that contained in the GRI AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 18 Guidelines mentioned above and can be observed in the positive results seen in AngloGold’s programs such as its highly commended malaria control activities in Ghana.

Outcomes can also be observed, according to Woods, in the company’s institutionalization of policies to address stakeholder issues. CONCLUSION It is an easy conclusion to reach that AngloGold Ashanti is very adept, from the evidence of its CSR reporting, at hitting all the right notes in its effort to be seen as a socially responsible company. The company’s instrumental motivation in strong alignment with a negative duty motivation, far outweighs other factors as the driver of AngloGold’s CSR strategy and activities.

The company’s diverse stakeholders – from shareholders in London and Johannesburg, and the SEC in New York, to the villagers of Iduapriem and Obuasi in Ghana and all others in between – present a multitude of issues that the company tries to address, using the GRI Guidelines and other international standards, in its Sustainability Report 2011. The universal principles expressed in the Ghana Business Code are those the company professes to be the bedrock of its corporate value system, and against which the company reports its performance.

AngloGold’s CSR performance in Ghana is far from adequate, but the company is transparent in publicly reporting these shortcomings. When all is said and done, however, AngloGold is a global company undertaking socially responsible activities with a strategic eye to profits for its shareholders. AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 19 REFERENCES AngloGold Ashanti. 2011a. Sustainable Gold. www. aga-reports. com/11/sustainabilityreport/home, first accessed August 2012. 5 -10 AngloGold Ashanti. 2011b. Sustainable Gold. www. aga-reports. om/11/sustainabilityreport/home, first accessed August 2012. 22 AngloGold Ashanti. 2011c. Sustainable Gold. www. aga-reports. com/11/sustainabilityreport/home, first accessed August 2012. 12 AngloGold Ashanti. 2011d. Sustainable Gold. www. aga-reports. com/11/sustainabilityreport/home, first accessed August 2012. 13 AngloGold Ashanti. 2011e. Sustainable Gold. www. aga-reports. com/11/sustainabilityreport/home, first accessed August 2012. 6-7 AngloGold Ashanti. 2011f. Sustainable Gold. www. aga-reports. com/11/sustainabilityreport/home, first accessed August 2012. 19 AngloGold Ashanti. 2011g.

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Academy of Management Review, 16:4: 691 – 713 UN. Global Compact. http://www. unglobalcompact. org/, first accessed September 2012 AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 22 APPENDIX AngloGold Mission To create value for our shareholders, our employees and our business and social partners through safely and responsibly exploring, mining and marketing our products. Our primary focus is gold and we will pursue value creating opportunities in other minerals where we can leverage our existing assets, skills and experience to enhance the delivery of value. AngloGold Values

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