The board of directors of Foschini Limited (Foschini) 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 to the ongoing development and implementation of best practices.
The board is ultimately responsible for ensuring that the group meets high governance standards and is assisted by management who aims to instil a culture of compliance and good governance throughout the group.
Foschini fully endorses the principles and practices incorporated in the King Code of Governance for South Africa 2009 (King III) and in the Listings Requirements of the JSE Limited.
Governance Landscape
The King Code of Governance for South Africa 2009 became effective on 1 March 2010. In terms of the Listings Requirements of the JSE Limited application of the changes relating to King III must be complied with in respect of all financial years commencing on or after 1 March 2010.
Whilst Foschini is therefore required to ensure compliance with King III in respect of the year ending 31 March 2011, a concerted effort has been made to produce an integrated report in line with the requirements of King III for the year ended 31 March 2010. Where a principle of King III has not been applied, this has been explained where relevant.
Integrated reporting in terms of King III requires annual reporting of both financial and sustainability performance, as well as commentary on how the company plans to enhance the positive aspects and eradicate or ameliorate the negative aspects in the year ahead.
The changes to the annual report resulting from the application of King III have largely been to present the required information in a more relevant layout such that separate reports covering risk, remuneration and transformation have now been introduced. The aspects covered in these reports were previously dealt with to a lesser degree within the Corporate Governance report itself.
A more integrated approach to sustainability reporting has been applied with information being presented where most relevant as opposed to being contained strictly within the Sustainability report itself. The board believes that the information contained within the entire integrated report and specifically within the Corporate Governance, Risk, Remuneration, Sustainability and Transformation reports collectively adequately conveys Foschini’s sustainability performance. The financial performance continues to be adequately covered in the annual financial statements. The commentary contained both within these reports, as well as in the Chairman’s, CEO’s and FD’s reports, outlines the positives and negatives as well as planned action steps.
The board acknowledges that it has ultimate responsibility for ensuring the integrity of the integrated report and is satisfied that sufficient controls are in place to verify and safeguard the integrity of the 31 March 2010 integrated report. In addition, the board has accepted the recommendation by the audit committee regarding the reliability of the sustainability disclosures that have been made.
Aside from the changes made to the annual report, much of the impact of King III relates to operational governance issues such as board sub-committee composition and functioning; as well as day-to-day board procedures. Foschini’s procedures have been strengthened where relevant to align with the King III requirements.
The board acknowledges that the application of the King Code of Governance continues to serve as a valuable guide to the entrenchment of strong governance principles throughout the group.
