Investor Relations impact on Corporate Governance

1. Investor Relationsimpact on Corporate Governance • Agenda • Case Study • Investor Relations • Reputational Management • Compliance Programmes Michael Campbell September 2010

2. Case Study • Shareholders vsExecutives • Conflict and non-alignment, enter ‘corporate governance’ • Charl Kocks: “doing the right thing at the right time” • Remedies or approaches to achieve corporate governance: • Traditional: exit or voice/influence (1970’s) • Corporate raiders: bid for underperforming shares (1980’s) • Activist shareholders: Bob Monks – Lens (1990-2000) • Contentious issues: • Pay vs performance (UK) • Value creation/destruction (US) • Stock option plans (UK and US)

3. Case Study: Activist shareholder – Bob Monks • Take active positions in company: • underperforming in light of strong underlying values, and • susceptible to increased value through shareholder involvement • Managers to function as legally charged vs activist to monitor and even remove hard-of-hearing managers • Ran for directorship of Sears Roebuck in 1991 • Eastman Kodak, Westinghouse, American Express • Now activism extended from US to UK and Asia

4. Influence of Institutional Shareholders Special Responsibility to Corporate Governance: • Hirschman (1970) – exit or voice • Cadbury Committee (1972) – influence • Greenburg Report (1995) – power and influence • Hempel Report (1998) – role of shareholders • Combined Code (2003) – dialogue with companies: • Enter a dialogue • Evaluation of governance disclosures • Shareholder voting

5. Influence of Institutional Shareholders - 2 • UK: Hermes principles (2002):  • Company’s board should seek an honest, open and ongoing dialogue with shareholders  • Board is responsible for facilitating a satisfactory dialogue with shareholders • US: ‘investor capitalism’ (1996): “concentration of shares enables institutional investors to directly challenge management on issues of concern.” (Useem)

6. Investor Relations’ goal is ... • To position the companyas the world’s premier corporate, across all measures, amongst key stakeholders • Taking cognisance of investment markets • Regulatory environment, and • Global best practice

7. Purpose statement - 1 • Strive for “best-in-class” communications • Promote excellent relationships with investment communities • Build and maintain positive stakeholder sentiment • Ensure sufficient liquidity in company shares • Retain and expand company’s investor universe

8. Purpose statement - 2 • Manage analyst and investor expectations • Increase analyst research coverage • Positively differentiate from other investments • Communicate through various channels • Messaging has to be managed in a regulated environment

9. Communication tools • Annual Report and Interim Report • Presentations of full year and half year results • Roadshows • 1:1 meetings • Electronic media – SENS, website • Print media – news releases, brochures, corporate surveys, research reports • Investor Day / site visits • Investor breakfasts / lunches • Conference speaking

10. Who is our Investor market? • Institutions / fund managers • Analysts (buy- and sell- side) • Private investors (retail market) • Financial media • Employees • Other influential contacts

11. Year planner for 2010 Statutory Marketing to retail investors • Annual Report published • BAML 1:1 Montecasino conference Close period Marketing to institutions • Close period • Full year results • Local and Int’l roadshow Close period Marketing roadshow Dec Nov Oct Sep • World Moneyshow Orlando • Close Period • Half year results • Local and international roadshow • Interim report Aug Jul Jun May • UBS South Africa Conference London • Marketing roadshow Apr Close period Mar • Investec SA CEO’s conference London • Annual General Meeting • Half year end Feb • JSE Showcase Jo’burg • Investor Day Jo’burg • Las Vegas Moneyshow • BAML EM Conference USA • Financial year End BAML 1:1 Sun City Jan Close period

12. Reputation risks • Size • Health and safety issues • Emotive industry / government • Ambivalent base / management • Soft target, and • Company defensive Reputation is the only competitive advantage

13. Six drivers of reputation - 1 Good feeling Admiration & respect Trust Emotional appeal Product and Service Product/service warranty High quality product/service Innovative product/service Good value product/service Good leadership Clear strategy Good employees Vision and Leadership

14. Six drivers of reputation - 2 Good employer Good employees Well managed Workplace environment Financial performance Profitable record Good investment Growth projects Safety performance Employees treated well Environmentally responsible Supports community HSEC

15. Upholding Reputation requires compliance programmes • Continuous disclosure compliance programme • Reinforces commitment to complying with continuous disclosure obligations of listing • Sets out systematic processes ensuring compliance • Provides employees with a statement of disclosure obligations, as well as practical guidance for dissemination of information • Includes disclosure rules, investor & media protocols and corporate governance codes

16. Components of compliance programmes Group Protocols for Investor and Media Relations Market Disclosure and CommunicationsPolicy Blue Label – Continuous Disclosure Obligations and Communications Disclosure Committee Protocol Disclosure Officer Guidelines • Management of Blue Label’s Investor & Media Relations, Group-wide • Blue Label’s commitment to complying with continuous disclosure obligations • Continuous disclosure obligations of countries where Blue Label lists its securities • Practical guide • Sets out: • Functions of the Disclosure Committee • Reporting processes • Controls for the release of information • Processes for managing obligations • Responsibilities of Disclosure Officers and reporting processes, and is a practical guide for Disclosure Officers Purpose • Internal • Intranet • External • Internet • Internal • Intranet • Internal • Intranet • Limited internal Purpose

17. Principles or why do we have Rules of Disclosure? • Legal requirement to disclose ‘material information’ to the market in accordance with listing rules • Determining ‘materiality’ is not always straightforward and may require judgement – consult widely • Information is released to stock exchange, investors and media and is posted on website • Investor Relations and Disclosure Committee/Company Secretary responsible not selective but simultaneous disclosure

18. In conclusion… In general: • We say too much… too soon… to too many people • We are unique, technology, passionate • Golden rules • no surprises,no disappointments • don’t over-promise,don’t under-deliver

19. Questions and Answers Michael Campbell September 2010