GOVERNANCE

At year-end, the board comprised nine directors, two executive directors and seven non-executive directors of whom four are independent non-executives. As the chairman is not independent, Seapei Mafoyane serves as the lead independent director.

At board level there is a clear division of responsibilities to ensure an appropriate balance of power and authority, such that no one individual has unfettered powers of decision making. The roles of the non-executive chairman and the chief executive officer are separate, as described in the board charter. The appointment and performance of the chairman is reviewed annually. Non-executive directors’ remuneration is not linked to the group’s financial performance. To improve the board’s effectiveness, evaluations of the board, individual directors, board committees and the chairman are carried out annually. Appropriate measures are taken to address any weaknesses highlighted through the evaluation process. The results are conveyed to the committees and the board and the chairman reports on the results and areas for improvement.

In accordance with the company’s memorandum of incorporation, non-executive directors are subject to retirement by rotation at intervals of three years and may be re-elected at the annual general meeting (“AGM”) at which they retire. Newly appointed directors hold office until the next annual general meeting at which they must retire. Accordingly, the directors retiring at the upcoming AGM and standing for re-election are Seapei Mafoyane, Jarred Winer, Mathukana Mokoka while Chris Seabrooke, Richard Buttle and Andre Broodryk stand for election.

The appointment and removal of directors, as well as changes to the composition of the board, are based on the recommendation of the nominations committee. Non-executive directors are chosen for their business skills and expertise appropriate to the strategic direction of the company. There are no term contracts of service between any of the directors and the company or any of its subsidiaries. The board has delegated, through formal terms of reference, specific matters to a number of committees whose members and chairmen are appointed by the board. There is full disclosure of matters handled by the committees to the board. The committees play an important role in enhancing high standards of governance and achieving increased effectiveness within the group. The board has an audit and risk committee, a remuneration and nominations committee and a social and ethics committee.

Appointments to the board of directors follow a formal and transparent process. The nominations committee assists the board in this regard. The board ensures that it has the right balance of skills, experience, background, independence and business knowledge to discharge its responsibilities. Newly appointed directors are introduced to the group via a formal induction programme, which includes a document pack with board calendars, charters and terms of reference, company policies, minutes of prior meetings and divisional site meetings, introductory meetings with the chief executive officer and chief financial officer as well as key contacts depending on the designation of the incoming director. Training on the roles and responsibilities of a director is also provided during induction. In respect of the chairman, the lead independent director has been identified. In terms of executive management, the chief executive officer and chief financial officer work together to ensure a smooth transition to maintain the confidence of investors, business partners, customer and employees, and provide any incoming executive with a solid platform from which to move the group forward.

The five divisional pillars of the group are structured in such a manner that each managing director will be able to lead and continue with business as usual should the top structure collapse. Potential leaders are identified and developed on an ongoing yet informal manner. The senior managers of each division have proper support from employees to ensure continuity. Key management dependencies are discouraged in the group. In addition, an emergency succession plan has been established for each group company.

At year-end, the board comprised nine directors, two executive directors and seven non-executive directors of whom four are independent non-executives. As the chairman is not independent, Seapei Mafoyane serves as the lead independent director.

At board level there is a clear division of responsibilities to ensure an appropriate balance of power and authority, such that no one individual has unfettered powers of decision making. The roles of the non-executive chairman and the chief executive officer are separate, as described in the board charter. The appointment and performance of the chairman is reviewed annually. Non-executive directors’ remuneration is not linked to the group’s financial performance. To improve the board’s effectiveness, evaluations of the board, individual directors, board committees and the chairman are carried out annually. Appropriate measures are taken to address any weaknesses highlighted through the evaluation process. The results are conveyed to the committees and the board and the chairman reports on the results and areas for improvement.

In accordance with the company’s memorandum of incorporation, non-executive directors are subject to retirement by rotation at intervals of three years and may be re-elected at the annual general meeting (“AGM”) at which they retire. Newly appointed directors hold office until the next annual general meeting at which they must retire. Accordingly, the directors retiring at the upcoming AGM and standing for re-election are Seapei Mafoyane, Jarred Winer, Mathukana Mokoka while Chris Seabrooke, Richard Buttle and Andre Broodryk stand for election.

The appointment and removal of directors, as well as changes to the composition of the board, are based on the recommendation of the nominations committee. Non-executive directors are chosen for their business skills and expertise appropriate to the strategic direction of the company. There are no term contracts of service between any of the directors and the company or any of its subsidiaries. The board has delegated, through formal terms of reference, specific matters to a number of committees whose members and chairmen are appointed by the board. There is full disclosure of matters handled by the committees to the board. The committees play an important role in enhancing high standards of governance and achieving increased effectiveness within the group. The board has an audit and risk committee, a remuneration and nominations committee and a social and ethics committee.

The company supports the principles of gender and race diversity at board level and has approved a board gender and race diversity policy. The board has set a voluntary target whereby female board members should comprise at least 30% of the board and diversity of the board should be 50%. As at financial year-end, the board achieved its target.

The board is satisfied that the company secretary is appropriately qualified, competent and experienced for the position in a listed company. The individual company secretary is a qualified attorney with over 10 years of experience in the company secretarial field. The chairman and the chief executive officer conduct an annual assessment in this regard to satisfy the board. The company secretary is recused from the meeting, planned annually, and performance is discussed.

The company secretary plays a pivotal role in the continuing effectiveness of the board, ensuring that all directors have full and timely access to information that helps them to perform their duties and obligations, and enables the board to function effectively. Further, the company secretary provides guidance and advice to the board and the group on governance matters and changes in legislation.

The company secretary’s key duties with regard to the directors include, but are not limited to, the following: • Collating and distributing relevant information, such as board meeting agenda items, and board/committee meeting papers, corporate announcements, investor communications and any other developments affecting the group • Providing guidance to the directors on their individual and collective powers and duties • Inducting new directors. This includes a briefing of their fiduciary and statutory duties and responsibilities, including those arising from the JSE Listings Requirements • Providing regular updates on changes to laws and regulations affecting the group; and the functions specified in section 88 of the Companies Act • Recording all meetings of shareholders, directors and board committees are properly as per the requirements of the Act.

The company secretary is not a director of the company, nor is she related to or connected with any of the directors, which could result in a conflict of interest. The company secretary is a juristic firm and the board assessed and considered the firm as a whole and the individual assigned to Rolfes. Accordingly, it is concluded that an arm’s length relationship with the board and its directors is maintained. The company secretary reports to the chief executive officer and the chief financial officer and has a direct channel of communication to the chairman. The removal of the company secretary would be a matter for the board as a whole. All directors and board committees have full access to the company secretary.