MAIN BOARD COMMITTEES
The main board of directors has delegated specific responsibilities to board committees, each with its own charter that defines its powers and duties. The committees review their charters on an annual basis and aim to undertake an annual performance evaluation. All committees are chaired by an independent non-executive director.
The board committees meet independently and provide feedback to the main board through their chairpersons. In addition, the minutes of all committee meetings are included in the main board packs on a quarterly basis and all directors are given the opportunity to raise any questions or concerns arising from these minutes.
The composition of these committees as well as changes thereto during the current year are reflected earlier in this report.
Remuneration committee
Members:
Prof. F Abrahams (independent non-executive) – chairperson
D M Nurek (independent non-executive)
Directors present by invitation:
A D Murray (executive)
This committee is governed by a formal charter to ensure that there is a transparent procedure for developing policies on executive remuneration and determining remuneration packages of individual directors and senior executives, within agreed terms of reference and within the framework of good corporate governance.
The key mandate of the committee is to compile emolument proposals in accordance with the group’s remuneration strategy, which are then considered by the board. This is designed and tailored to:
- continue to attract, retain, and motivate executives of the highest calibre;
- enable the group to remain an employer of choice; and
- ensure a blend of skills that consistently achieves predetermined business objectives and targets.
The committee’s powers regarding non-executive remuneration are limited to making recommendations to the board.
The committee, which met three times during the year, comprises two independent non-executive directors. The CEO is present by invitation (although recuses himself during deliberation of his own remuneration), as is an external consultant.
The chairman of this committee attends the annual general meeting.
The Remuneration report that summarises certain key aspects of the functioning of this committee is included elsewhere in this annual report.
Risk committee
| Members: | |
| D M Nurek | (Independent non-executive) – chairman |
| D M Polak | (non-executive) |
| A D Murray | (executive) |
| R Stein | (executive) |
The board is responsible for risk management, while divisional and operational management are accountable to the board for this process.
The group has adopted an ongoing, systematic and documented risk management process that ensures that all material risks are identified, evaluated, effectively managed, and where this is practical, quantified. This process is undertaken within each division as well as by the operating board. It has served to ingrain a sustainable risk awareness and culture at all levels. The assessments are aligned to the immediate, medium-and long-term strategic and business objectives within each division, as well as those of the group as a whole.
All significant projects undertaken by the group are subject to formal risk assessments. Ongoing business sustainability is addressed as part of this process.
The risk committee is responsible for ensuring that:
- appropriate risk and control policies are in place and are communicated throughout the group;
- the process of risk management and the system of internal control are regularly reviewed for effectiveness;
- there is an ongoing process of identifying, evaluating and managing the significant risks faced by the group, and that this is in place throughout the year;
- a formal risk assessment is undertaken annually;
- there is an adequate and effective system of internal control in place to manage the more significant risks faced by the group to an acceptable level;
- there is a documented and tested process in place that will allow the group to continue its critical business processes in the event of a disaster, inter alia the destruction of a distribution centre, head office, or computer facility, that affects its activities;
- a risk register is maintained and kept up to date; and
- appropriate insurance cover is placed and regularly reviewed, and that all uninsured risks are reviewed and managed.
The risk committee comprises two non-executive directors and two executive directors as at the financial year-end. Meetings are held four times a year.
The Risk report that summarises certain key aspects of the functioning of this committee is included elsewhere in this annual report.
Audit committee
| Members: | |
| S E Abrahams | (independent non-executive) – chairman |
| W V Cuba | (independent non-executive) |
| K N Dhlomo | (independent non-executive) |
| N V Simamane | (independent non-executive) |
| Directors present by invitation: | |
| D M Nurek | (independent non-executive) |
| A D Murray | (executive) |
| R Stein | (executive) |
The committee is governed by a formal audit committee charter that has recently been updated to ensure compliance with the requirements of King III. This charter guides the committee in terms of its objectives, authority and responsibilities.
The role of the audit committee is, inter alia:
- to review the effectiveness of the group’s systems of internal control, including internal financial control and risk management, and to ensure that effective internal control systems are maintained;
- to ensure that written representations on internal control are submitted to the board annually by all divisional managing directors and general managers (these being representations that provide assurance on the adequacy and effectiveness of the group’s systems of internal control);
- to monitor and supervise the effective functioning and performance of the internal auditors;
- to ensure that the scope of the internal audit function has no limitations imposed by management and that there is no impairment on its independence;
- to evaluate the independence, effectiveness, and performance of the external auditors and obtain assurance from the auditors that adequate accounting records are being maintained;
- to recommend the appointment of the external auditors on an annual basis;
- to ensure that the respective roles and functions of external audit and internal audit are sufficiently clarified and co-ordinated; and
- to review financial statements for proper and complete disclosure of timely, reliable and consistent information and to confirm that the accounting policies used are appropriate.
The committee consists of four independent non-executive directors. It typically meets three times per annum. Executive directors, members of executive management, internal audit, and the external audit partners and staff attend meetings at the invitation of the committee.
The Audit Committee report that summarises certain key aspects of the functioning of this committee is included elsewhere in this annual report.
Nominations committee
| Members: | |
| D M Nurek | (independent non-executive) – chairman |
| S E Abrahams | (independent non-executive) |
| M Lewis | (non-executive) |
| Directors present by invitation: | |
| A D Murray | (executive) |
This committee is governed by a formal
charter to ensure that there is a process
in place to identify and assess new
executive and non-executive directors
fairly and thoroughly. The committee’s
responsibilities include:
- reviewing the board structure, size and composition;
- reviewing the nature, size and composition of the board sub--committees;
- succession planning;
- reviewing the balance between non-executive and executive directors;
- ensuring that the directors have the required blend of experience, skills and knowledge to guarantee the continued success of the group;
- ensuring the existence of a formal process of performance evaluation; and
- compliance with the principles of good governance and the code of best practice.
During the year this committee analysed board and sub-committee composition in light of the requirements of King III and made certain recommendations for changes that are discussed earlier in this report. The committee considered the independence of all independent non-executive directors whose term exceeded nine years and satisfied themselves that all directors who are described as independent in the annual report, are indeed believed to be so. The performance and attendance of all directors retiring by rotation was considered by the committee prior to requesting that they stand for re-election at the upcoming annual general meeting. The committee gave due consideration to the outcome of the performance evaluation process and determined certain actions arising therefrom. The committee is tasked with finding a suitable successor to the audit committee chairman within the next five years.
This committee met three times during the year. It comprises three non-executive directors. The chief executive officer attends meetings by invitation.
Transformation committee
| Members: | |
| Prof. F Abrahams | (independent non-executive) – chairperson |
| D M Nurek | (independent non-executive) |
| A D Murray | (executive) |
Directors present by invitation:
R Stein (executive)
The scope of authority of this committee is clearly defined in a formal charter.
The committee has established a broad-based BEE strategy aligned to the Broad-based Black Economic Empowerment Act of 2003 and the associated codes of good practice, including a BBBEE-level contributor target with timelines. Clear guidelines have been defined for each of the seven elements of BBBEE, being equity ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development.
The committee has an ongoing responsibility to monitor and review all aspects of the group’s BBBEE strategies and to ensure the achievement of its targets. In order to attain these targets, sub-committees for each of the seven elements have been established, with meetings taking place at least quarterly.
The transformation committee comprises two independent non-executive directors and the CEO. The financial director attends meetings by invitation. The committee met three times during the last year.
The Transformation and CSI report that summarises certain key aspects of the functioning of this committee is included elsewhere in this annual report.
