Ethics and Governance | Case Study

Running head: ETHICS AND GOVERNANCE
Ethics and Governance
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ETHICS AND GOVERNANCE1
Table of Contents
1. Introduction and Summary of Northern Star.........................................................................2
2. Summary of Corporate Governance.......................................................................................3
2.1 Composition of Board......................................................................................................3
2.2 Report from Chairman and CEO......................................................................................3
2.3 The Remuneration Report................................................................................................4
2.4 Immediate Priorities and Plans to achieve them..............................................................4
3. Board Orientation...................................................................................................................5
4. Interpretation of Northern Star using Legitimacy Theory.....................................................7
References..................................................................................................................................9

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1. Introduction and Summary of Northern Star
Northern Star Resources Ltd (Northern Star) is an ASX 100 company involves in
producing and exploring gold; the company’s three Tier-1 assets are sited in Tier-1 places in
highly potential and low sovereign risk areas of Australia and North America (asx.com.au,
2020). The bases of mineral resources of Northern Star is 20.8 million ounces along with 5.4
million ounces of Ore Reserves that includes maiden Reserve at Pogo of 1.5Moz. It is
considered as the second largest gold producers of Australia and success of the company can
be seen in delivering on its key strategic objectives to be a safe and quality gold company
responsible for delivering exceptional values to its shareholders. In the year of 2019, 840,580
ounces of gold was sold by the company from its operations in Alaska and West Australia.
The main focus of Northern Star is the organic growth of Resources and Reserve with the
help of highly successful exploration programs and by through appraisal of the existing mines
for the major expansion of their operational lives. Northern Star has been continuing its
advanced exploration activities at Pogo, Tanami and Kalgoorlie (nsrltd.com, 2020).
Northern Star operates in the industry Australia which involves in mining gold and
the gold mining industry of Australia is regarded as the heart of the global gold recovery.
Demand for the gold of Australia is at a ten year high. The 21st century gold mining industry
of Australia is one of the major industries in Australian and all over the world. In 2015-16,
282t was the total production of gold in Australia; 9 million troy ounce gold was produced by
Australian which is 10 percent of global gold production. Australia reported $16 billion of
gold exports to more than 55 countries all over the world. More than 27000 people are
employed in the gold mining industry of Australia (minerals.org.au, 2020).
Since Northern Star acquired high-grade and low-cost Paulsens mine in July 2010, the
aim of the company has been to accumulate a portfolio of high-margin and high-quality

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mining operations aiming to maximize the return and wealth of its shareholders. Major
transformation of Northern Star can be seen from a 100,000oz per year single mine producer
in 2010 to a company having three concentrated centres with a total annual production of
800,000 to 900,000oz at A$1200 to A$1300/oz in the year 2020. In the year 2018, Northern
Star acquired the world-class Pogo gold mine in Alaska’s tier-1 jurisdiction with the aim to
expand its business in highly prospective Tintina Mineral Belt (nsrltd.com, 2020). Therefore,
it can be seen that there has been major progress in the business operations of Northern Star
since its inception.
2. Summary of Corporate Governance
2.1 Composition of Board
As per the 2019 annual report of Northern Star, the Board of Directors consists of
seven members that includes the Executive Chairman, Lead Independent Director and
Independent Non-Executive Directors (nsrltd.com, 2020). Among the Board of Directors of
Northern Star, there are 6 independent directors and one non-independent director.
Independent directors are the directors of the companies who are members of the board, but
not members of the executive management team (Wang, Xie & Zhu, 2015). As per the annual
report of Northern Star, Bill Beament, the Executive Chairman of the company, has received
LTIs for executive key management personnel. This makes him a non-independent director.
2.2 Report from Chairman and CEO
As per the report of the Executive Chairman of Northern Star, the acquisition of Pogo
is a key milestone for Northern Star that reflects its business volume and commercial
strategies. Since this is a correct merger and acquisition decision of the company, this has
been able in creating significant value for Northern Star. As mentioned by the Executive
Chairman of Northern Star, the status of Pogo is work-in-progress. Apart from Pogo,