Gold Road Resources (ASX: GOR) Corporate Ethics and Governance

This report provides an analysis of the ethics and governance practices of Gold Road Resources Ltd, an organization focused on gold exploration in Western Australia. It examines the company's corporate code of conduct, board structure, remuneration policies, and commitment to corporate governance principles as outlined by the ASX Corporate Governance Council. The report assesses Gold Road's stakeholder orientation, focusing on its responsibilities towards shareholders, employees, the community, and the environment. It also touches upon the company's core values, environmental policies, and initiatives for community engagement, highlighting the importance of transparency and ethical conduct in their operations. The report concludes by emphasizing the need for Gold Road to substantiate its disclosures with concrete information about the actual environmental and social consequences of its activities and to actively implement corrective measures.

Running Head: Report
Executive Summary
Gold Road Resources has set up the corporate code of conduct to be followed by every
member of the organization including the board members, the management and all the
employees of the company. This code of conduct is designed to maintain high standards of
behaviour within the organization to be observed by all members and make the employees
aware of their responsibilities as per the employment contract with the company. This report
is compiled to analyze the ethics and governance practices of Gold Road Resources Ltd. The
organization Gold Road Resources Ltd was established in the year 2004. It can be inferred
from the analysis that although Gold Road has included detailed disclosure about their
policies and initiatives for environmental and social well being of the internal and external
stakeholders of the company the report lacks substance. It is recommended that the
organization should work towards gathering information about the actual consequences of
their operations on the environment and the society and include the same in the report along
with the corrective initiatives.
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Running Head: Report
Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Organizational background........................................................................................................3
Corporate governance practices.................................................................................................4
Corporate governance: stakeholder orientation.........................................................................9
Interpretation of company communication using legitimacy theory.......................................13
Conclusion................................................................................................................................15
References................................................................................................................................16
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Running Head: Report
Introduction
Gold Road Resources Ltd is an organization that primarily deals with the exploration of gold
deposits and is currently focused on developing the Yamarna Belt in Western Australia
stretched across an area of 6,000 square kilometers. This report presents the ethical outlook of
the organization and begins with providing the organizational background. This is followed
by presenting a brief summary of the corporate governance practices and the approach that
the organization has taken in terms of their orientation for reporting about the environmental
and social impact. The interpretation of the communication by the organization for this
purpose is included in the report to highlight the outcomes of the reporting practices and how
the organization can take measures for improving them (Guthrie & Parker, 2009).
Organizational background
The organization Gold Road Resources Ltd was established in the year 2004 as a private
organization with the name Faulkner Resources Pty Ltd. Russel Davis made use of his
experience of working in the Yamarna Greenstone Belt as a geologist to establish Faulkner.
After the acquisition of the Yamarna North and Yamarna South Projects in the year 2005,
Faulkner decided to go public and the organization was renamed Eleckra Mines. Eleckra
Mines became a public company in the year 2006 and also got listed on the Australian
securities exchange. The organization further explored the Golden Highway Resources and in
the year 2010, Eleckra decided to rename itself Gold Road Resources to represent the focus
of the company on gold mining operations. Currently, Gold Road Resources has complete
ownership of the Yamarna Greenstone Belt (Wilmshurst & Frost, 2010).
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Running Head: Report
The Yamarna Greenstone Belt is located 200 km to the east of Laverton in Western Australia
covering area of more than 6,000 square kilometers. This belt is considered to be under
explode and very prospective in terms of Gold mining. In the year 2016, Gold Road
Resources also entered into a joint venture with the organization Gold Fields Ltd having a
50:50 partnership. This covered an area of 144 square kilometers of the Gruyere Joint
Venture. It is estimated that this joint venture will produce between 85,000 and 120,000
ounces of gold for the financial year 2019 and once the operations attained a steady state, the
annual production can go anywhere up to 300,000 ounces from it. The total leases in the
Yamarna Belt contain gold resources that are expected to amount up to 6.5 million ounces.
The completely owned tenements of the Yamarna Belt currently being explored by the
organization and in addition to this, the company is also exploring the Gruyere JV. Gold
Road Resources is more focused on the exploration of the Yamarna Belt since it is expected
to have various New World discoveries in this region. The organization entered another joint
venture with Cygnus Gold Ltd in the year 2017 for exploration in the Greenfields region of
Western Australia.
Corporate governance practices
Gold Road Resources carries out the exploration and development of mineral properties
throughout Australia and is primarily known for the exploration of gold deposits.
Headquartered in West Perth, Australia, Gold Road Resources is headed by Duncan Gibbs as
the Managing Director and CEO of the company. The members of the board of Gold Road
are presented in the image below.
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The board comprises of four executives and three non-executive members. The details of the
remuneration of the non-executive members are presented below.
The remuneration structure followed for the executives of the company is presented below.
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The letter by the chairman of Gold Road Resources, Tim Netscher, for the Annual Report
2018 is included below.
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Gold Road has 11 distinct policies that ensure that the organization and all its operations are
in compliance with corporate governance principles stated by the ASX Corporate
Governance Council. The various policies of the company allowing them to practice
excellent corporate governance are:
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 Anti-corruption and compliance policy
 Continuous disclosure policy
 Corporate code of conduct
 The report on director related entities
 Environmental policy
 Health, safety and wellbeing policy
 Remuneration policy
 Risk management policy
 Securities trading policy
 Shareholder Communications policy
 Whistleblower policy
The organization has demonstrated that commitment towards maintaining the highest
standards of corporate governance and constantly works towards creating an excellent
corporate culture. Gold Road believes in values of ethical working and integrity and also
understands that these practices help in reducing the risk faced by the organization. The
system for complete control and improve accountability has been introduced by the
organization as a part of the corporate governance practices (Gibassier & Unerman, 2019).
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Corporate governance: stakeholder orientation
It is the responsibility of the organization to ensure that its members are acting ethically and
professionally at all times and all the actions and decisions are consistent with the values of
Gold Road. All the internal and external stakeholders of the organization get the assurance
from the corporate code of conduct of the company that their actions will be consistent with
the stated practices of the company. In addition to the employees of Gold Road, the do's and
don'ts included in the corporate code of conduct of the company are also applicable to all the
contract partners of the organization and their consultants. All the senior leaders of the
organization including the board members and the decision makers endorse the values of the
company and the code of conduct and it is their responsibility to constantly strive to achieve
it. It is also the responsibility of the organizational leaders to make use of the principles and
values stated in the when taking decisions, acting and responding on behalf of the company
(Bebbington & Larrinaga‐González, 2008).
The corporate governance system and principles of gold Road oriented towards ensuring that
the rights of all the stakeholders of the company are protected and the organization is able to
maximize the returns of the shareholders. The organization does not just focus on the
shareholders of the company but also has policies in place for working ethically and
protecting the other internal and external stakeholders of the company. The third section of
the corporate code of conduct of the company highlights the responsibilities that Gold Road
holds towards the shareholders of the organization and the entire financial community. This
states that the organization is working towards increasing shareholder value while
safeguarding their rights and interests and acting ethically. The organization strives to
maintain a system of strong accountability and control throughout their processes for this
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purpose. However, the focus of the corporate governance system of Gold Road is not just to
maximize the shareholder value but also adopts a stakeholder orientation taking care of the
protection of the rights of various stakeholders of the company and not just the people having
a stake in the organizational capital (Chu, Chatterjee, & Brown, 2012). The five core values
of Gold Road as stated in the 2018 annual report of the company are:
 Caring for the well-being of all
 Acting with integrity
 Delivering the promises
 Innovating for improvement
 Working as a team
(Netscher, 2018)
Since the organization is focusing on abiding by the legislation and the common law
requirements having an impact on their business operations, they ensure that they do not
cause any damage to the environment of the cultural heritage of the area. The organization
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Running Head: Report
also provides measures to ensure the health and safety of all its members and had a dedicated
whistleblower policy for the protected disclosure of any unethical practices noticed by the
internal employees. The employees of the organization considered to be significant
stakeholders of the company and therefore, Gold Road only employees the best available
staff. The organization ensure that the people hired by the company have the necessary skills
to carry out where job requirements and they do not practice any discrimination on the basis
of religion, cast, colour, nationality, race, family status, marital status, sexual orientation,
gender, pregnancy, ancestry, age, medical condition, mental or physical disability or any
other characteristic. The organization also focuses on encouraging affirmative action by
providing opportunities for employment to women and indigenous people and ensures equal
opportunity for all (Gold Road Resources Board, 2019).
In order to fulfil their responsibility towards the community in which they operate, Gold
Road regularly raises issues related to environment and complies with all the legal
regulations and requirements for their operations. The stakeholder orientation of the
organization is also visible in their policy to respect the beliefs, culture and values of the
indigenous people by developing transparent practices and honest relationships with the
communities with which they operate. This provides mutual benefits to the community as
well as the organization (Campbell, Craven, & Shrives, 2013). Gold Road also monitors the
environmental performance identifying the opportunities and ensuring that there efficiently
making use of resources like water and energy. They take conscious efforts to minimize the
waste production and also run initiatives that contribute to the conservation of the
biodiversity. Another initiative started by Gold Road to fulfill their obligations and
responsibility towards their community is the land use planning and Rehabilitation practice.
The annually released sustainability report of the organization provides the details about their
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