Governance

Corporate governance report

Motus has a well-constituted, independent and diverse board, with deep industry knowledge and expertise. The board is supported by a highly experienced management team with deep industry knowledge of regional and global markets, and a proven track record with years of collective experience. As a result governance is well embedded in the way we operate the business.

Motus has developed strong relationships with key stakeholders such as shareholders, debt providers and ratings agencies, as well as industry, government and social partners.

Motus is subject to the ongoing disclosure, corporate governance and other requirements of the JSE and the Companies Act and endorses the recommended practices set out in the fourth King Report on Corporate Governance for South Africa (“King IV”). The board is satisfied with the Group’s application of the principles of King IV.

Our governance framework

Motus applies high standards of accountability, transparency and integrity in the running of the business and reporting to shareholders and other stakeholders. Motus’ approach to corporate governance, which is guided by the overarching principles of fairness, accountability, responsibility and transparency, is set out below. Special attention is given to:

  • Providing stakeholders and the financial investment community with clear, concise, accurate and timely information about the Group’s operations and results;
  • Reporting to shareholders on an integrated basis on financial and selected sustainability performance;
  • Ensuring appropriate business and financial risk management;
  • Ensuring that no director or executive management team member may deal, directly or indirectly, in Motus’ shares on the basis of unpublished price-sensitive information regarding Motus, or otherwise during any prohibited period; and
  • Recognition of Motus’ social responsibility and providing assistance and development support to the communities in which it operates, and to deserving institutions at large.

Authority, responsibility and accountability for the Group’s ethics, performance and sustainability is held at board level, with the board formally delegating it to the CEO and in turn to his direct reports and sequentially throughout the organisation. The diversity of Motus’ operations necessitates differences in the nature, structure and processes of delegation, excepting financial expenditure for which authority limits are consistent across the Group.

The leaders of Motus are mindful that entrepreneurial creativity and responsiveness is a competitive advantage and every effort is made to integrate governance processes in the least bureaucratic way possible, with the ultimate responsibility for governance resting with the Motus board and its sub-committees.

Our board

Following the unbundling from Imperial Holdings, Motus’ board was reconstituted to be compliant with the principles set out in King IV.

Motus has a well-constituted and diverse board, with expertise and experience relevant to strategy and operating context within which Motus operates. Motus has a unitary board comprising six non-executive directors (five of whom are independent) and three executive directors.

Details of the board members, including a brief CV, can be found in Board of directors.

The board adopted a formal board diversity policy, which promotes both gender and race diversity, and which recognises Motus’ obligation to be relevant in society and embraces the benefits of having a diverse board membership with differences in skills, regional and industrial experience, background, race and gender.

The responsibilities of the board are clearly defined in a written board charter, which outlines a clear balance of power and authority within the board to ensure that no single director has unfettered powers of decision making.

Board appointment and nomination

Directors are appointed based on their skills, experience and expected level of contribution to, and impact on, the activities of Motus. The board decides on the appointment of directors based on recommendations from the nominations committee. New directors are formally inducted to facilitate their understanding of the Group.

Board evaluation process

The board will conduct a facilitated evaluation of the board, the Chairman, board committees and individual directors at least every three years. The Chairman, assisted by the Company Secretary, will conduct the evaluation process.

Board changes

GW Dempster and P Langeni were elected as independent non-executive directors and A Tugendhaft was elected as a non-executive director on 1 August 2018. T Skweyiya and RJA Sparks were appointed to the board on 17 September 2018 to facilitate the unbundling process from Imperial Holdings and resigned as non-executive directors on 22 November 2018, upon Motus’ listing. S Mayet, KR Moloko and MJN Njeke were appointed as independent non-executive directors on 22 November 2018. KA Cassel was appointed as an executive director on 1 July 2019.

Board attendance to 30 June 2019

  Board
meetings
  Annual board
strategy
meeting
  Independent   Appointment  
Total meetings 3   1          
Non-executive directors                
GW Dempster (Chairman) 3   1   Yes   1 August 2018  
A Tugendhaft (Deputy Chairman) 3   1   No   1 August 2018  
P Langeni 3   1   Yes   1 August 2018  
S Mayet 2   1   Yes   22 November 2018  
KR Moloko 2   1   Yes   22 November 2018  
MJN Njeke 2   1   Yes   22 November 2018  
T Skweyiya 1     Yes   Appointed on 17 September 2018  
              and resigned 22 November 2018  
RJA Sparks 1     Yes   Appointed on 17 September 2018  
              and resigned 22 November 2018  
Executive directors                
OS Arbee 2   1       12 October 2017  
OJ Janse van Rensburg 3   1       12 October 2017  

Separation of roles and responsibilities

The Chairman is an independent nonexecutive chairman whose role is clearly defined and separate from that of the CEO. The role of the Chairman is to set the ethical tone of the board and to ensure that the board remains efficient, focused and operates as a unit. The Chairman provides overall leadership to the board without limiting the principle of collective responsibility for board decisions.

The responsibility for the executive management of Motus vests with the CEO, Mr OS Arbee, who reports to the board on the company’s objectives and strategy. The CEO is accountable to the board and consistently strives to achieve the Group’s goals within the framework of the delegated authority.

Delegation of authority

The board has adopted, and regularly reviews, a written policy governing the authority delegated to management, and matters reserved for decisions by the board. This delegation of authority matrix has been implemented.

The responsibilities of the board include issues of strategic direction, business plans and annual budgets, major acquisitions and disposals, changes to the board and other matters that have a material effect on the Group or are required by legislation.

The board has delegated the day-to-day management of the Group to the CEO, without abdicating the board’s responsibility. The board ensures that key functions are managed by competent and appropriately qualified individuals who are adequately resourced.

Company Secretary

The Company Secretary during the course of the year was RA Venter, who resigned on 1 July 2019. JK Jefferies was appointed as Company Secretary on 1 July 2019, and holds BA, BProc, LLM degrees and is an admitted attorney.

The board considered the competence, qualifications and experience of the Company Secretary in considering her appointment and confirmed that the Company Secretary is adequately qualified and experienced.

After conducting a review as part of the annual board evaluation process, the board concluded that there were no direct or indirect relationships between the Company Secretary and any of the board members which could compromise an arm’s length relationship with the board.

Directors have unlimited access to the services of the Company Secretary, who is responsible to the board for ensuring that proper corporate governance principles are adhered to.

Ethical conduct

The board is committed to the good corporate governance principles as set out in King IV and subscribes to those generally accepted norms of conduct that find application in society as a whole.

Motus has a written code of ethics for the Group as a values-based organisation, which also applies to all directors. The code of ethics guides the interaction between employees, clients, stakeholders, suppliers and the communities within which it operates.

Management is responsible for the implementation of the code of ethics and reports any material breaches to the social, ethics and sustainability (“SES”) committee. The content of and principles embodied in the code of ethics are also integrated in employee training.

For more detailed information, see sustainability report online – Demonstrate consistently ethical and compliant business conduct.

Compliance

The board, with the assistance of management and the audit and risk committee, ensures that the Group complies with applicable laws and regulations, as well as adopted non-binding rules, codes and standards.

The board has delegated the responsibility for implementing compliance to management. The Group has identified the laws, codes and standards that impact its operations.

Responsible corporate citizenship

The board oversees the governance and activities of the Group which affect its status as a responsible corporate citizen, including compliance with the Constitution, laws, standards and own policies and procedures, as well as consistency with the Group’s purpose, strategy and code of ethics.

The SES committee approves the strategy and monitors the implementation of the Group’s impact on the environment, its ongoing corporate social investment and overall good corporate citizenship.

Stakeholder engagement

When engaging with stakeholders and communities, Motus is committed to improving the material wellbeing of societies in which it operates. Careful consideration is given to the utilisation of energy, water and other environmental resources to ensure an effective contribution is made to sustain the environment for the future.

Key stakeholders are identified by management and the board. Management pursue appropriate engagements with material stakeholders to balance their legitimate and reasonable needs, interests and expectations with those of the Group. The board encourages proactive engagement with stakeholders.

Our annual general meeting (“AGM”) provides an opportunity for the board to interact with shareholders and for shareholders to ask questions and vote on resolutions. Minutes of the meeting are available from the Company Secretary’s office.

Combined assurance

In our commitment to implementing risk management, Motus recognises the relationship as set out in the risk management framework and the combined assurance framework. The combined assurance framework is intended to ensure that Motus has a co-ordinated effort in the management of risks throughout the organisation and to provide comfort on the management of the key significant risks to the relevant stakeholders.

The board, with the assistance of management and the audit and risk committee, recognises the key role of appropriate Group-wide risk management in the strategy, performance and sustainability of the Group.

The implementation of processes to ensure that risks to the sustainability of the business are identified and managed within acceptable parameters and appropriately delegated to management.

Management continuously identify, assess, mitigate and manage risks within the existing operating environment. Mitigating controls are in place to address identified risks which are monitored on a continuous basis.

For more detailed information, see risk management.

Technology and information

The board, through the audit and risk committee, oversees the governance of IT. Technology and information have been identified as being of key importance in relation to the achievement of the Group’s strategy.

Conflicts of interest

The Group has a formal conflicts of interest policy that guides directors on acting in the best interests of the Group, with due care and diligence in discharging their responsibilities as directors. The policy requires directors to declare and avoid conflicts of interest in accordance with the Companies Act, and to account to the Group for any advantages gained in discharging their duties on behalf of the Group.

Share trading and dealing in securities

No director or employee with inside information about the Group may deal, directly or indirectly, in Motus’ securities, which include allocations of and dealings in the Group’s share incentive schemes. Motus’ closed periods are from 1 January to the interim results’ reporting date and 1 July to the full-year results’ reporting date. In addition, the Group has adopted a policy that requires directors, executives, the Company Secretary and directors of major subsidiaries to obtain permission from designated individuals before trading in the Group’s securities. No infringements were reported during the year.

Board sub-committees

The board has established a number of sub-committees, including statutory committees, which operate within specific terms of reference. Each committee has a formal charter, approved by the board, detailing its duties and responsibilities, and has a minimum of three members to ensure sufficient capability and capacity to function effectively.

Any member of the board is entitled to attend any committee meeting as an observer and management may attend by standing or ad hoc invitation.

The performance of each committee is regularly assessed in accordance with their terms of reference. No instances of non-compliance were noted.

The following tables outline the board sub-committees, their responsibilities and memberships at the time of publication of this report.

         

Social, ethics and sustainability committee

Responsibility

The role of the SES committee encompasses all aspects of sustainability. The committee performs statutory duties, as set out in the Companies Act, for the Group and on behalf of subsidiary companies. In addition to its statutory duties, it assists the Group in discharging its social, ethics and sustainability responsibilities and implementing practices consistent with good corporate citizenship, with particular focus on:

  • King IV.
  • Motus’ sustainability commitments.
  • B-BBEE requirements as described in the Department of Trade and Industry’s (“dti’s”) combined generic scorecard (excluding ownership targets) and associated codes of good practice.
  • Transformation commitments, as described in the Group’s transformation strategy and business segment specific B-BBEE plans.
  • Environmental commitments, as described by the Group’s environmental policy framework.
  • Socioeconomic development (“SED”) commitments.
  • Motus’ code of ethics and corporate values.

Transformation remains a key focus area and the committee will continue to guide the Group to achieve its goal of increasingly reflecting the diversity of South Africa.

 
 
The committee comprises three non-executive directors, with standing invitees being members of management.

It is chaired by a non-executive director.
  Members   Attendance   Invitees
  MJN Njeke (Chairman)   2/2   OS Arbee
  A Tugendhaft (member)   2/2   OJ Janse van Rensburg
  KR Moloko (member)   2/2   B Moroole
          B Francis
          M Seroke
 

During the year, the committee discharged its statutory duties to monitor activities relating to the following:

  • SED, including the Group’s standing in terms of the goals and purposes of the 10 United Nations Global Compact principles, the Organisation for Economic Cooperation and Development recommendations regarding corruption, the Employment Equity Act and the B-BBEE Act.
  • Good corporate citizenship, including the Group’s promotion of equality, prevention of unfair discrimination and corruption, and contribution to the development of the communities in which it operates or within which its products or services are marketed and where it undertakes sponsorship, donations and charitable giving.
  • The environment, health and public safety, including the impact of the Group’s activities, products and services.
  • Consumer relationships, including the Group’s advertising, public relations and compliance with consumer protection laws.
  • Labour and employment, including the Group’s standing in terms of the International Labour Organisation Protocol on decent work and working conditions, as well as its employment relationships and contribution towards the training and development of its employees.
 

         

Audit and risk committee

Responsibility

The board has combined the functions of audit and risk into a single committee to ensure that there is co-ordination in respect of the evaluation and reporting of risks, and the internal and external audit processes for the Group, taking into account the significant risks, the adequacy and functioning of the Group’s internal controls and the integrity of its financial reporting. The committee also oversees and manages the Group’s combined assurance approach.

The committee performs an advisory and oversight role in respect of non-statutory duties it is assigned by the board and is objective and independent in the recommendations it makes to the board for its approval or final decision making.

The committee assists the Group in discharging its responsibilities and implementing robust internal control and risk processes, with particular focus on:

  • Safeguarding of assets and investments.
  • The operation of adequate systems and controls.
  • Reviewing of financial information and preparation of annual financial statements.
  • Communicate and oversee the processes, models and frameworks for managing risk across the Group.
  • Managing the Group’s combined assurance approach.
  • Oversight of IT governance.
 
 
The committee comprises three non-executive directors, with standing invitees being members of management.

It is chaired by a non-executive director.
  Members   Attendance   Invitees
  S Mayet (Chairman)   2/2   OS Arbee
  P Langeni (member)   2/2   OJ Janse van Rensburg
  KR Moloko (member)   2/2   B Moroole
          D Long
          R Mumford
          N Bell
 

During the year, the committee discharged its statutory duties to monitor activities relating to the following:

  • Recommending to the board the appointment of the external auditors.
  • Approval of the terms of engagement and remuneration for the external audit engagement.
  • Defining and approving the policy for non-audit services provided by the external auditor.
  • Pre-approval of contracts for non-audit services to be rendered by the external auditor.
  • Preparation of a report for inclusion in the annual financial statements describing the activities of the audit committee, whether the audit committee is satisfied that the auditor was independent, and commenting on the financial statements, the accounting practices and the internal financial controls of the company.
  • Making submissions to the board on any matter concerning the company’s accounting policies, financial controls, records and reporting.
  • Appropriately addressing any concerns or complaints whether from within or outside the company, or on its own initiative relating to the accounting practices and internal audit and/or external audit of the company.
  • Considers, on an annual basis, and satisfies itself of the appropriateness of the expertise and experience of the Chief Financial Officer.
  • Assists the board in overseeing the quality and integrity of Motus’ integrated reporting process, including the financial statements, sustainability reporting and announcements in respect of the financial results.
  • Performing such other oversight functions as may be determined by the board from time to time.
More information is available in the audit and risk report in the full annual financial statements.
 

  Nomination and remuneration committees      
 
 
Full details of the nomination and remuneration committees are set out in the remuneration report.
 
 

         
Asset and liability committee (“ALCO”)
Responsibility

ALCO is responsible for implementing best practice asset and liability risk management policies. Its primary objective is to manage the liquidity, debt levels, interest rate and foreign exchange rate risk of the Group within an acceptable risk profile.

  • Ensure effective management of liquidity risk through appropriate access to sources of funding on a timeous and cost-effective basis.
  • Assess the debt profile of the Group and deploy appropriate strategies, including interest rate derivatives, to manage interest rate risk.
  • Monitor the impact of the risk of a credit rating downgrade of the sovereign rating by rating agencies and mitigate this to the extent possible.
  • Ensure the appropriate allocation of capital across the Group and measure returns using WACC and ROIC to adequately fund business activity.
  • Foreign exchange management through appropriate forward cover and hedging mechanisms is in place.
 
 
The committee comprises three non-executive directors, with standing invitees being members of management. The committee is chaired by the Group Chairman.   Members   Attendance   Invitees
  GW Dempster (Chairman)   2/2   OS Arbee
  S Mayet (member)   2/2   OJ Janse van Rensburg
  MJN Njeke (member)   2/2   R Mumford
          W Reitsma
 

During the year, the committee discharged its statutory duties to monitor activities relating to the following:

  • Assist directors to enable them to discharge their duties relating to best practice for asset and liability risk management.
  • Overseeing effective financial risk management policies and procedures, specifically relating to liquidity risk, interest rate exchange, foreign exchange risk, credit rating risk and capital management.
  • Recommend to the Group funding strategies based on accessing various sources of funding including the domestic and global bond markets, commercial paper and banking facilities.
  • Analyse trends in the domestic and global economy in general, interest rate and exchange rates in particular, and advise on their potential impact.