The board of directors of Foschini Limited remains fully committed to business integrity, fairness, transparency and accountability in all its activities. In support of this commitment, the board subscribes to the highest standards of corporate governance in all aspects of the business and the ongoing development of best practices.
Foschini fully endorses the principles incorporated in the Code of Corporate Practices and Conduct, as outlined in the second King Report (King ll), and the Listings Requirements of the JSE Limited
Foschini has, in all material respects, complied with King ll and continually strives to enhance compliance. The application of King II continues to serve as a valuable guide to the entrenchment of strong governance principles throughout the group. A Board Charter has been finalised and awaits ratification and adoption by the board.
Foschini has a unitary board structure, which, as at its 31 March 2007 year-end, comprised 10 directors. The eight non-executive directors are all independent according to the King ll definition, with the two executive directors being the CEO and managing director and the financial director. Detailed information on the directors and their credentials appear here.
At 31 March 2007, the board and its committees were constituted as follows:
The non-executive directors come from diverse backgrounds in commerce and industry. Their collective experience enables them to provide sound, independent and objective judgement in decision-making that is in the best interests of the group. They are ultimately responsible for the performance of the group, its long-term sustainable growth, and enhancement of shareholder value. They review and ratify the group's strategy in addition to monitoring and measuring its performance and executive management against key performance indicators. They provide opinion and advice regarding the group's financial, audit, governance and risk management controls. They review the succession planning at senior levels, group transformation, as well as provide input to the remuneration process to ensure sustainable leadership.
The chairman and deputy chairman are both independent non-executive directors. The roles of the chairman, Eliot Osrin, and the CEO and managing director, Dennis Polak, are separate, with a clear division of responsibilities. Both provide leadership and guidance to the company’s board, and encourage deliberation on all matters requiring the board's attention, and obtain optimum input from the other directors. All directors exercise unfettered discretion in the fulfilment of their duties, resulting in constructive debate at meetings that continue to yield well-considered decisions.
Newly-appointed directors hold office only until the next annual general meeting, at which time they retire and become eligible for re-election as directors. Each year, one-third of the existing board are subject to retirement by rotation and are eligible for re-election as directors by the shareholders. Non-executive directors have no fixed term of employment, and the performance of all directors is subject to annual peer review.
An annual evaluation of the board is undertaken by the chairman by means of a questionnaire sent to each board member. The results of the questionnaire are collated by the chairman, and feedback provided to the full board.
An induction programme is in place in the event of the appointment of new directors, with the objective of maximising their understanding of the group, enabling them to provide immediate input and make well-informed decisions.
The board typically meets quarterly in Cape Town, and further meetings are scheduled at short notice should circumstances dictate.
The board and its committees are timeously supplied with comprehensive information to enable them to effectively discharge their duties. All directors have unrestricted access to the company secretary and all company records, as well as to independent professional advice at the company’s expense in appropriate circumstances.
The direct and indirect holdings, share options and transactions of the directors of Foschini Limited at 31 March 2007 are set out in note 12.4. Non-executive directors do not participate in the share incentive schemes.
The board complies with the requirements of the JSE Limited in relation to the restrictions required in the trading of Foschini Limited shares by directors and employees during the defined closed periods. Restrictions may also be placed on share dealings at other times during the year should the group be involved in corporate activity or sensitive negotiations. The company secretary advises all directors and employees prior to the commencement of the closed trading periods of the prohibitions contained in the Insider Trading Act relating to share dealings whilst in possession of price-sensitive information. Details of directors’ share dealings are disclosed to the Listings Division of the JSE Limited and communicated through its electronic news service, SENS. These dealings are also disclosed at board meetings. There is a process in place, in terms of the requirements of the JSE Limited, for directors to obtain prior clearance before dealing in the company’s shares. All transactions are conducted at the ruling market price on the JSE Limited.
In line with the responsibilities as formalised in their charter, the nominations committee announced changes to directorships as part of the group’s succession planning to ensure sustained leadership.
D M Polak will retire from the positions of group managing director and chief executive officer with effect from 31 December 2007. His experience and expertise will be retained with his transition into the role of non-executive director on 1 January 2008.
His existing role will be split into two functions:
B J Curry and G S Naidoo were appointed to the operating board with effect from 1 October 2006.
A R Bisogno and M Mendelsohn were appointed to the operating board with effect from 1 March 2007.
Furthermore, D Sheard was appointed as company secretary with effect from 15 February 2007 to replace R Stein, who continues his role as financial director.
The directors had no interest in contracts as contemplated in section 234 of the Companies Act.
The attendance of the directors at board meetings and board committee meetings for the year was as follows:
| Board | Audit Committee | Remuneration Committee | Risk Committee | Nominations Committee | Transformation Committee | |
| Number of meetings | 5 | 2 | 3 | 4 | 2 | 2 |
| Directors' attendance | ||||||
| E Osrin | 5 | 2 | 3 | 4 | 2 | 2 |
| D M Nurek | 5 | 2 | 3 | 4 | 2 | n/a |
| F Abrahams | 5 | n/a | 3 | n/a | n/a | 2 |
| S E Abrahams | 4 | 2 | n/a | n/a | 2 | n/a |
| L F Bergman | 5 | n/a | n/a | n/a | n/a | n/a |
| W V Cuba | 4 | n/a | n/a | n/a | n/a | n/a |
| N H Goodwin | 5 | 2 | n/a | n/a | n/a | n/a |
| M Lewis | 2 | n/a | n/a | n/a | n/a | n/a |
| D M Polak | 5 | 2* | 3* | 3 | 2 | 2 |
| R Stein | 5 | 2* | n/a | 4 | n/a | 2 |
| * by invitation | ||||||
