GOVERNANCEGovernance report
Ntando Simelane
Company Secretary
and Head of Legal Counsel
FTSE4Good Index Series
Motus is led by a diverse board of directors, the majority of whom are independent, with extensive industry knowledge and expertise, subscribing to ethical leadership, sustainability, stakeholder inclusivity, and high standards of corporate governance.
The board is supported by a highly experienced professional management team with knowledge of regional and global markets, and a proven track record.
The board is committed to good corporate governance and as the custodian thereof, it ensures that Motus adheres to the highest standard of accountability, fairness and ethics, which are essential in building and maintaining trust, and delivering value creation. The board is equally aware of the importance of setting the tone at the top. It is against this background that the Companies Act, MOI, the JSE Listings Requirements, and the principles and practices of King IV and internal policies form the foundation upon which Motus' governance practices are founded.
The board is satisfied with the Group's application of the principles of King IV. Each board sub-committee has terms of reference, based on King IV, from which the committee's annual plan is drawn. These are a standing item on the committee's agenda to ensure confirmation that the committee has adhered to its terms of reference. The board is guided by its Charter, which is based on King IV.
Governance
highlights
- Streamlined the SES Committee agenda to ensure appropriate focus on ESG issues.
- Appointment of an independent director to chair RemCo, in line with King IV recommendations.
- Amended the Group MOI to ensure that executive directors are not subject to retirement by rotation.
- Streamlined governance frameworks for significant Group subsidiaries, including the amendment of certain subsidiary MOIs.
- Reviewed the Group's limits of authority framework to streamline decision-making and ensure that authority is appropriately delegated.
- Ensured that the designate auditor was rotated in accordance with the regulatory requirements.
- Offered governance training to directors of certain subsidiaries.
- Approved the Group's harassment policy, ensuring compliance with the recently introduced Code of Good Practice on the Prevention and Elimination of Harassment in the Workplace 2022.
Read our King IV application register onlineOur governance framework
Corporate governance is defined by the structures, processes and practices that the board employs to direct and manage the operations of Motus and its subsidiaries. These ensure that authority is exercised and decisions are taken within an ethical and predictable framework that promotes accountable decision-making. By setting the tone at the top and leading ethically and with integrity, the board, assisted by its various sub-committees, ensures that a culture of good corporate governance cascades down throughout the organisation.
A high level of accountability, fairness and integrity are applied in the running of the business, supported by transparent reporting to shareholders and stakeholders.
Motus' overarching approach to corporate governance is guided by the principles of fairness, accountability, responsibility, and transparency, with particular attention being given to the following:
- The provision of clear, concise, accurate and timely information about the Group's operations and results.
- Ensuring transparent reporting to shareholders on a financially integrated basis.
- Ensuring robust business and financial risk management is embedded across the Group.
- Ensuring that no director or executive management team member may deal directly or indirectly in Motus' shares in contravention of the JSE Listings Requirements and/or the law.
- Recognising Motus' social responsibility at large and being responsive to the ever-changing regulatory environment.
The Group has a formally constituted board, who are accountable to the company's shareholders. Board sub-committees and the CEO are accountable to the board. The Group's business is structured into business segments, either as subsidiaries or divisions of Motus Holdings Limited or its direct subsidiaries. The business segments have their own management structures in place, including divisional boards and FRRCs, and their CEOs are members of the Group Executive Committee. The Group CEO and CFO attend divisional board meetings and the CFO attends FRRC meetings, in order to ensure that strategic priorities are appropriately prioritised and monitored, and financial performance is reviewed and monitored quarterly. Minutes of the FRRC's are formally presented to the ARC to provide an opportunity to assess the performance and priorities of the business and report on this to the board. The Group Executive Committee, which meets at least seven times a year, is responsible for considering and approving operational policies and reviewing business performance.
The key subsidiaries and related parties of the Group can be found online in the annual financial statements.The Group operates in accordance with the board-approved Code of Ethics, which sets out the standard of ethical conduct that is expected from employees and directors alike. This includes adherence to honesty, accountability, transparency, fairness and sustainability practices.
The Group Code of Ethics is available here. The leaders of Motus are mindful that entrepreneurial creativity, agility and responsiveness are a strong competitive advantage, and every effort is made to ensure that governance processes enable the business to deliver value to its stakeholders, with the ultimate responsibility for governance resting with the Motus board and its sub-committees.
Board meetings and ensuring effectiveness
The meetings of the board and its sub-committees are scheduled annually in advance. Board papers are provided to directors in a timely manner, in advance of meetings, and directors are afforded ample opportunity to study the material presented and to request additional information from management where necessary. All directors are afforded the opportunity to propose further matters for inclusion on the agenda of board meetings. Declaration of interests and confirmation of the agenda are standing items on the board meeting agenda.
The board has unrestricted access to all Group information, records, documents and facilities. The Company Secretary is the secretary to all committees of the board and ensures that they operate within the limits of their respective mandates and in accordance with their terms of reference. Chairmen of the respective board sub-committees present their reports at the board meeting immediately following each meeting of the committee, on all the key issues discussed and the recommendations of the committee in respect of matters to be referred to the board for decision. Directors are kept appropriately informed of key developments affecting the Group between board meetings.
Motus is led by a diverse board of directors, with knowledge, expertise, and experience relevant to the strategy and operating context within which the Group operates. The board is comprised of seven non-executive directors, the majority of which are independent, and three executive directors.
Details of board members, including a brief CV, can be found in the leadership section. Changes to the board can be found below.The board is governed in accordance with the MOI and board charter, which outline the duties and responsibilities of the board and set out a clear balance of power and authority within the board to ensure that no single director has unfettered powers of decision-making. The board is acutely aware of its role and responsibilities, which include steering the company and setting its strategic direction while management develops the strategy for board approval. The annual board strategy session was held in June 2022, where management presented the strategy to the board for consideration and approval.
Motus recognises its obligations in society and embraces the need and benefits of having a diverse board membership with differences in backgrounds, skills and experience. To give effect to this obligation, the board has adopted a broad diversity policy, through which diversity, i.e. gender, race, culture, age, field of knowledge and experience, is promoted and measured.
Board appointment and nomination
The nomination and appointment of directors is regulated in terms of the MOI, the Nomination Committee's (NomCo) terms of reference and board charter. The MOI determines the minimum and maximum number of directors that can be appointed to the board and the process thereof. Board appointments are confirmed following the interviews of the candidates and recommendations from the NomCo, regard is given to having skill, experience, expected level of contribution to, and impact on, the activities of Motus. New directors are formally inducted to facilitate their understanding of the Group. The board utilises various sources to recruit the required skills on the board, these include but are not limited to the use of independent recruitment agencies and directors' networks.
The board, through the NomCo, determines the number of outside professional commitments for directors, based on directors' role, ability to attend meetings and contribution on the board. The board, through the NomCo, has considered the composition of the board, its sub-committees and succession, and is satisfied with the arrangements currently in place regarding the board succession planning.
In terms of the MOI, at each AGM, one-third of the non-executive directors are required to retire from office and, being eligible, can make themselves available for re- election. Directors who were appointed before the AGM are to make themselves available at the next AGM for election by shareholders. Thus, each non-executive director is rotated at least once every three years. The following directors will retire from office and, being eligible, will offer themselves for re-election following the recommendation of the NomCo: Messrs. S Mayet and MJN Njeke.
Board evaluation
The evaluation of the board's performance and that of its sub-committees, its chairman and its individual members is conducted every two years to support continued improvement in its performance and effectiveness. An evaluation was last conducted in 2021 and its outcome was reported in the 2021 integrated report. The next board evaluation will be conducted in 2023.
Board and committee changes
The following changes to the board and committees were effected during the year under review:
| Effective date | Nature of the change | |
| 1 August 2021 | |
|
| 1 September 2021 |
|
|
| 3 November 2021 | |
|
Board attendance to 30 June 2022
| |
Board meetings |
Annual board strategy and budget meeting |
Independent |
Appointment to the board |
| Total meetings | 4 | 1 | |
|
|---|---|---|---|---|
| Non-executive directors | |
|
|
|
| GW Dempster (Chairman) | 4/4 | 1/1 | Y | 1 August 2018 |
| A Tugendhaft (Deputy Chairman) | 4/4 | 1/1 | N | 1 August 2018 |
| PJS Crouse | 4/4 | 1/1 | Y | 10 November 2020 |
| NB Duker | 4/4 | 1/1 | Y | 10 November 2020 |
| S Mayet | 4/4 | 1/1 | Y | 22 November 2018 |
| MJN Njeke | 4/4 | 1/1 | Y | 22 November 2018 |
| F Roji | 3/3 | 1/1 | Y | 1 September 2021 |
| Executive directors | |
|
|
|
| OS Arbee | 4/4 | 1/1 | N | 12 October 2017 |
| OJ Janse van Rensburg | 4/4 | 1/1 | N | 12 October 2017 |
| KA Cassel | 4/4 | 1/1 | N | 1 July 2019 |
Board and committees' meetings, as well as the board strategy and budget meeting, are scheduled annually and in advance.
Separation of roles and responsibilities
The business and affairs of the Group are managed under the direction of the board, which derives its authority from the Companies Act, MOI and board charter. The board is chaired by an independent non-executive director whose role is clearly defined in the board charter and MOI, and is separate from that of the CEO. The Chairman presides over meetings of the board and the NomCo, and is responsible for ensuring the integrity and effectiveness of the board governance processes. The Chairman provides overall leadership to the board without limiting the principle of collective responsibility for board decisions.
The responsibility for the day-to-day executive management of Motus is the responsibility of the CEO, who reports and is accountable to the board on the Group's objectives and strategy. Board sub-committees are generally constituted with powers of recommendation unless specified in a board resolution, board charter, or legislation.
Delegation of authority
The board has adopted and regularly reviews, a written policy that governs delegation of authority to management and matters reserved for decision by the board as well as those reserved for shareholders' authority. During the year, the delegation of authority framework was reviewed to streamline decision-making and ensure that authority is appropriately delegated.
The responsibilities of the board include approval 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. The board still ensures that key functions are managed by competent and appropriately qualified individuals who are adequately resourced.
The board is satisfied that the delegation of authority and governance instruments of the company contribute to role clarity and effective exercise of authority and responsibilities.
Company Secretary
Mr. NE Simelane is the Company Secretary and Head of Legal Counsel.
The board considered the competence, qualifications, and experience of the Company Secretary and confirmed that he is adequately qualified and experienced to discharge his responsibilities. The board also concluded that there were no direct or indirect relationships between the Company Secretary and any of the board members which could compromise their independence.
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 in place and adhered to.
Ethical conduct
The Group operates in terms of a board-approved Code of Ethics, which sets out the standard of ethical conduct that is expected from employees and directors alike. The board is committed to adhering to ethical conduct and good corporate governance in discharging its duties and responsibilities. The Code of Ethics also guides the interaction between employees, customers, stakeholders, suppliers, and the communities within which Motus operates.
Employees and stakeholders are encouraged to report any suspected contravention of the policies and/or law through an independently operated anonymous tip-off line. The line is available 24 hours per day, 365 days per year and all complaints lodged through this service are investigated and, where appropriate, disciplinary action is instituted and reported to the board through the SES Committee and ARC. In instances where weak controls are identified, appropriate improvements are introduced to remedy the identified weaknesses. The responsibility for the implementation of the Code of Ethics and for reporting any material breaches to the SES Committee and ARC lies with management. The content and principles embodied in the Code of Ethics are also integrated into employee training.
All senior management and operational directors are required to formally confirm compliance with the Code of Ethics and conflict of interest policy and practice.
For more detailed information, refer to our ESG report online.Compliance
The Group is committed to compliance with all the applicable laws and regulations in the geographies in which we operate, as well as the adopted non-binding codes and standards. Accordingly, the regulatory universe impacting the Group has been defined, to enable the board, with the assistance of management and the ARC as well as other committees where relevant, to focus on laws and regulations that are relevant to Motus. The day-to-day responsibility for compliance is delegated by the board to management. Motus is committed to complying with the relevant laws where it operates, its MOI, and its policies.
Keeping abreast of regulatory changes
The Group operates in a highly regulated and complex environment. Despite a number of key pieces of legislation coming into effect in 2021 that directly impacted the automotive industry, the Group has been able to quickly identify where operations are impacted and timeously implement the required controls. Membership in industry bodies are also a critical aspect in understanding the changes necessary to comply with automotive regulations and their likely impacts on the Group and the industry. This allows the Group to actively participate in regulatory consultation processes and industry forums to proactively contribute to the shaping of upcoming automotive policy.
Recent regulatory changes include:
- Protection of Personal Information Act (POPIA): POPIA is designed to promote the protection of personal information and to bring South Africa's privacy laws in line with international standards.
- Automotive Aftermarket Guidelines: The Automotive Aftermarket Guidelines aim to increase the inclusivity of previously disadvantaged individuals and SMEs in the automotive value chain.
- Administrative Adjudication of Road Traffic Offences Act: The AARTO Act is aimed at improving driver behaviour, encouraging motorists to be law-abiding and reducing road accidents. AARTO will be rolled out in phases, with the first phase starting in July 2021. In January 2022, the High Court in Pretoria ruled in favour of Organisation Undoing Tax Abuse in declaring the AARTO Act and its amendments unconstitutional and invalid.
- Cybercrime Act: On 1 December 2021, several elements of the Cybercrimes Act came into effect. The law has codified cybercrimes in South Africa and provides the South African Police Service with extensive powers of search, seizure and arrest. The National Prosecuting Authority has the power to prosecute offences.
- National Environmental Management: Waste Act, 2008: The Department of Environmental Affairs has published several regulations around waste management.
Upcoming regulatory changes include
-
Conduct of Financial Institutions Bill: The COFI Bill is part of the Twin Peaks model of regulation and aims to strengthen the regulation of the financial sector in relation to customer treatment and general market conduct.
- Cell Captive Conduct Standard: The final draft Cell Captive Conduct Standard regulates the structure of cell arrangements.
For more detailed information, refer to our ESG report online.Responsible corporate citizenship
The board oversees the governance and activities of the Group to ensure that Motus continues to be a responsible corporate citizen as outlined in the Companies Act and SES Committee's terms of reference.
The SES Committee oversees the strategy and monitors the implementation of the Group's impact on the environment, its ongoing corporate social investment, and overall good corporate citizenship. In addition, the SES Committee will also focus its attention on the implementation of ESG considerations.
For more detailed information, refer to our ESG report online.Stakeholder engagement
Motus has developed strong relationships with its shareholders and key stakeholders, such as debt providers, industry bodies, government, trade unions, and social partners. When engaging with stakeholders and communities, Motus is aware of its responsibility as a responsible corporate citizen. It is against this background that management carefully considers the utilisation of energy, water, and other environmental resources to ensure an effective contribution is made to sustain the environment for the future.
The Group's philosophy is to build and deepen long-term relationships with partners and programmes that align to the three pillars the Group has identified for social upliftment and empowerment within under-served communities in South Africa; being: education, road safety and primary healthcare. The Group therefore has the following key partners and programmes that they support:
- Imperial and Motus Community Trust - established in 2003 to assist communities, the Imperial and Motus Community Trust supports a partner school network to improve literacy and reading skills. To date, 63 resource centres and libraries provide access to over 72 000 learners on a daily basis and create 65 full time jobs.
- Motus Safe Scholars programme - a national campaign supported by the South African Department of Transport and Department of Basic Education, the Safe Scholar programme teaches road safety at schools, visiting over 2 300 schools and reaching over 1,96 million learners.
- Unjani Clinic Network - consisting of 124 healthcare facilities, the Unjani Clinic concept supports a sustainable model for primary healthcare in disadvantaged communities, empowering black women professional nurses and employing 475 people.
- Creating employment - supporting the YES4Youth initiative, giving 400 young people relevant work experience and preparing them for future employment as well as providing apprentice training to around 1 600 apprentices.
- Donated R6 million to NGOs to support communities in KwaZulu-Natal who were either impacted by the July 2021 unrest or by the floods that devastated the province in April 2022.
Key stakeholders are identified by management and the board. Management pursues appropriate engagements with material stakeholders to align their legitimate and reasonable needs, interests, and expectations with those of the Group. The board encourages proactive engagement with stakeholders.
Motus representatives hold formal positions on various industry bodies to ensure active participation on matters of national interest and, where applicable, in legislative changes. Motus also participates in multiple discussions and certain forums to ensure that its views are considered and forms part of any industry feedback/position.
The AGM provides an opportunity for the board to interact with shareholders of the company and for shareholders to ask questions and vote on resolutions. Minutes of the AGM are available for inspection through the Company Secretary's office, subject to compliance with the relevant provisions of the Companies Act.
Read more in our stakeholder engagement section. Combined assurance
In our commitment to implementing risk management, Motus recognises the relationship as set out in the risk management and the combined assurance frameworks. The combined assurance framework is intended to ensure that Motus employs a co-ordinated effort in the governance and management of risks throughout the organisation and provides comfort on the management of the key significant risks to the relevant stakeholders.
The board, with the assistance of management and the ARC, recognises the key role of integrated risk management in the strategy, performance and sustainability of the Group.
The process of overseeing risk and ensuring that it is within acceptable parameters is delegated to management, who continuously identify, assess, mitigate and manage risks within the existing or future operating environment and ensure that the appropriate controls are in place to mitigate these risks.
Read more in the managing our risks and opportunities section.Technology, information and innovation
The board, through the ARC, oversees the governance of IT. Technology and information, as well as ongoing investment in the Group's innovation strategy, are of key importance to the achievement of the Group's strategy and support longer-term value creation.
The Group has board-approved IT governance and information management policies, standards and procedures in place and a consolidated Group IT report, which includes governance, cyber risks and incidents, as well as IT audit issues, is distributed quarterly to the ARC. The Motus IT strategy and governance are formulated by Group IT and executed by individual business segments. Group IT oversees the adherence of business segments to Group policies and standards.
The Motus IT strategy is guided by strategic principles that allow our employees to act quickly by empowering them to make strategically consistent choices.
Read more about our innovation strategy and focus areas in our innovation and digitisation review.Read more about how we govern data in our ESG report online.Conflict of interest
Conflict of interest is regulated in accordance with the provisions of the Companies Act and other internal governance frameworks. The directors' register of interests is shared with directors on a quarterly basis before every board meeting to allow directors sufficient time to consider it and confirm its accuracy and/or to amend where necessary. Declaration of interest is a standing item on the board and committees' agenda to ensure that declarations relating to the business of the meeting or lack thereof are recorded.
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 dealings in the Group’s share incentive schemes. Motus’ standard closed periods are from 1 January to the date of the announcement of interim results and 1 July to the date of the announcement of full-year results. 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.
The board has constituted a number of sub-committees, including statutory committees, which operate within formally adopted terms of reference. Each committee has a formal term of reference, 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.
Sub-committees of the board are constituted with formal terms of reference which determine, inter alia, the constitution, purpose, powers and authority of the committee, its governance, the scope of its mandate and its relationship to the board in accordance with King IV, Companies Act and JSE Listings Requirements, where applicable. Board sub-committees are generally constituted with powers of recommendation unless specified in a board resolution, board charter, or legislation.
Any member of the board is entitled to attend any committee meeting as an observer and management may attend but are not allowed to vote on any matter considered by the committee to which they are invited.
The performance of each committee is regularly assessed in accordance with their terms of reference. No instances of non-compliance were noted.
The following section outlines the board sub-committees, their responsibilities, and memberships in the period under review.
Social, Ethics and Sustainability (SES) CommitteeJohnson (JJ)
Njeke
Responsibility
The role of the SES Committee is set out in the Companies Act and its terms of reference. In addition, this committee will play a more significant role in shaping the Group's approach to ESG matters. The committee's mandate includes monitoring:
- Socio-economic activity, including the Group's standing in terms of the goals and purposes of the 10 UN 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 Organization Protocol on decent work and working conditions, as well as its employment relationships and contribution towards the training and development of its employees.
- Broader commercial and economic dynamics that may impact the sustainability of Motus' businesses, including innovation and disruption and our strategy, the Motus brand and risk management thereof, as well as the appropriateness of investment in technology.
Transformation and ESG matters remain key focus areas and the committee will continue to guide the Group to achieve its goal of increasingly reflecting the diversity of South Africa and meeting its ESG objectives.
Membership
The committee comprised three non-executive directors, and one executive director, with permanent invitees being members of management. It is chaired by an independent non-executive director.
| Members | Attendance | Standing invitees |
| Chairman: MJN Njeke | 4/4 | KA Cassel |
|---|---|---|
| Members: | |
B Cohen |
| OS Arbee | 4/4 | B Francis |
| F Roji | 3/3* | OJ Janse van Rensburg |
| A Tugendhaft | 4/4 | B Makhubedu |
| OJ Janse van Rensburg | 1/1* | M Seroke |
| KA Cassel | 1/1* | |
* For detail of changes to committee membership, refer to board changes.Performance
During the year, the committee discharged its regular statutory duties through the monitoring of activities relating to the following:
- Compliance with Companies Act and its regulations.
- Compliance with the principles of King IV.
- Feedback from independent service providers managing our whistle-blowing hotline.
- Motus' sustainability commitments.
- B-BBEE requirements as described in the dtic 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.
- Occupational health and safety.
- Socio-economic development commitments.
- Review of its terms of reference.
- Various business divisions presented to the SES Committee on their innovation, brand positioning and reputation as well as key green investment initiatives. This is management's way of demonstrating the sustainability of these divisions to the board. The following divisions made presentations to the committee: Retail and Rental; IT and Innovation; Hyundai and Aftermarket Parts.
- Motus' Code of Ethics and corporate values.
For more detailed information, refer to our ESG report online.Our approach to managing climate-related risks
The Group considers its climate-related risks in alignment with the recommendations formulated by the TCFD.
The board is ultimately responsible for climate-related issues and the SES Committee assesses the identified climate-related risks and opportunities and the effectiveness of the management thereof. Aligned to the TCFD recommendations, the SES Committee receives a quarterly risk assessment on our climate-related risks, which includes risk impacts, our responses and relevant key performance indicators. The Group's risk assessment process considers strategic, business and operational risks. Group-level risks are reported to ARC. The board delegates the responsibility for managing ESG issues to executive management who are tasked with monitoring the integration of ESG into daily business practices.
We have increased our investment in green installations, incorporated carbon taxes into our tax compliance function, updated our risk management framework to include transition and reputation risks related to climate change, and reported against the TCFD for the first time in our ESG report.
Governing environmental impacts
Audit and Risk Committee (ARC)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, considering the significant risks, the adequacy and functioning of the Group's internal controls and the integrity of its financial reporting.
Saleh
Mayet
The committee's mandate can be summarised as follows:
In its role as the Audit Committee
- Recommends to the board the appointment of the external auditors.
- Responsible for recommending the appointment of the external auditor and to oversee the external audit process.
- Oversees Internal Audit and approving internal and external audit plans and reviews quarterly internal control and risk reports.
- Considers liquidity and solvency of the Group and recommends dividend pay-outs from time to time.
- Reviews levels of authority for the Group and ensures that adequate insurance is in place.
- Establishes an annual work plan to ensure that all relevant matters are covered in the agenda and aligned to its terms of reference.
- Reviews the expertise, resources and experience of the company's finance function annually, and disclose the results in the integrated report.
- Defines and approves the policy for non-audit services provided by the external auditor.
- Pre-approves contracts for non-audit services to be rendered by the external auditor.
- Prepares a report for inclusion in the audited consolidated and separate annual financial statements describing the activities of the ARC, whether the 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.
- Oversees integrated reporting and recommending the integrated report to the board for approval.
- Making submissions to the board on any matter concerning the company's accounting policies, financial controls, records and reporting.
- Reviews significant cases of employee conflicts of interest, misconduct or fraud.
- Annually considers the suitability of the Group CFO or equivalent appointee as well as the overall finance team's competence and performance.
- Reviews significant transactions not directly related to the company's normal business and ensures that a combined assurance model is applied.
- Monitors the performance and functioning of divisional finance and risk review committees and monitoring compliance with relevant laws and regulations and obtains regular updates from management and the company's legal counsel.
- Prepares a statement complying with regulatory requirements and King IV, for inclusion in the consolidated and separate annual financial statements.
- Performs such other oversight functions as may be determined by the board from time to time.
In its role as the Risk Committee
- Ensuring that the company has implemented an effective policy and plan for risk management that will enhance the company's ability to achieve its strategic objectives.
- Overseeing the development and annual review of a policy and plan for risk management to recommend for approval to the board.
- Monitoring implementation of the policy and plan for risk management by means of risk management systems and processes.
- Overseeing that the risk management plan is widely disseminated throughout the company and integrated into the day-to-day activities of the company.
- Ensuring that frameworks and methodologies are implemented to increase the possibility of anticipating unpredictable risks.
- Making recommendations to the board concerning the levels of risk tolerance and appetite and monitoring those risks to ensure that they are managed within the levels of tolerance and appetite as approved by the board.
- Expressing the committee's formal opinion to the board on the effectiveness of the system and process of risk management.
Membership
The committee comprised three non-executive directors, with permanent invitees being members of management and representatives from the external auditors. It is chaired by an independent non-executive director.
| Members | Attendance | |
Standing invitees |
| Chairman: S Mayet | 5/5 | OS Arbee | R Louw |
|---|---|---|---|
| Members: | |
N Bell | B Makhubedu |
| NB Duker | 4/5 | KA Cassel | U Singh |
| MJN Njeke | 1/1* | B Francis | K Volschenk |
| F Roji | 4/4* | OJ Janse van Rensburg | External audit representatives |
*
For detail of changes to committee membership, refer to board
changes.Performance
During the year, the committee discharged its duties to monitor activities relating to the following:- Safeguarding of assets and investments.
- Ensuring the operationalisation of adequate systems and controls.
- Reviewing of financial information and preparation of audited consolidated and separate annual financial statements.
- Considered the Group's solvency, liquidity and working capital before recommending to the board for approval.
- Communicating and overseeing the processes, models and frameworks for managing risk across the Group.
- Monitored its performance against the terms of reference to ensure compliance thereof.
- Managed the process to change the external audit firm to comply with IRBA's 2017 ruling on mandatory audit firm rotation and made recommendations to the board for approval. The change in the audit firm was also confirmed with the JSE in accordance with its requirements.
- Managing the Group's combined assurance approach.
- Oversight of IT governance and strategy.
- The board has satisfied itself that the CFO, Mr. OJ Janse van Rensburg, has the appropriate qualifications, expertise and experience to fulfil his duties. In addition, the board has satisfied itself that the composition, expertise and skill set of the finance function are appropriate.
- The ARC has satisfied itself in terms of paragraph 3.84(g) of the JSE Listings Requirements, that the Group has the appropriate financial reporting procedures.
For more detailed information, refer to the audit and risk report in the audited consolidated and separate annual financial statements, available online, and our ESG report online. Asset and Liability Committee (ALCO)Graham
Dempster
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. Its mandate can be summarised as follows, to:
- Review its terms of reference annually.
- Consider topics as defined by the board from time to time and investigate any activity, which the committee, in its sole discretion, considers falling within its scope.
- Review compliance with legal, statutory and regulatory matters relevant to its duties.
- Oversee the implementation of an effective process for managing the Group's interest rate, liquidity, currency and similar market risks relating to the Group's balance sheet and associate activities, including the adoption from time to time of policies, risk limits and capital levels.
- Ensure the development, implementation and regular review of an appropriate Financial Risk Policy for the Group.
- Provide guidance and recommendations in terms of level of authority for potential investments and acquisitions.
Membership
The committee comprised three non-executive directors, with permanent invitees being members of management. It is chaired by the Chairman of the board.
| Members | Attendance | Standing invitees |
| Chairman: GW Dempster | 4/4 | OS Arbee |
|---|---|---|
| Members: | |
OJ Janse van Rensburg |
| PJS Crouse | 3/4 | B Makhubedu |
| S Mayet | 4/4 | S Pillay |
| |
|
K Volschenk |
For detail of changes to committee membership, refer to board changes.Performance
During the year, the committee discharged its statutory duties to monitor activities relating to the following:
- 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.
- Considered and recommended certain significant and strategic acquisitions to the board for approval and also reviews the Group's liquidity and solvency.
- Foreign exchange management through appropriate forward cover and hedging mechanisms is in place.
Nomination Committee (NomCo)Graham
Dempster
Responsibility
NomCo assists the board with the nomination, election and appointment of directors in accordance with board policies and the succession strategy. The committee is also responsible for executive succession. The mandate of the committee can be summarised as follows:
- Follow a formal process for the appointment and re-election of directors, including identification of suitable individuals to serve on the board and assessment of the collective knowledge, skills, experience and diversity required by the board and whether the candidate meets the criteria.
- Oversee the development of a formal induction programme for new directors and the succession of senior executives.
- Oversee the development and implementation of continuing professional development programmes for directors.
- Ensure that directors receive regular briefings on changes in risks, laws and the environment in which the company operates.
- Consider the performance of directors and take appropriate remedial steps where directors are not fulfilling their responsibilities.
Membership
The committee comprised three non-executive directors, with permanent invitees being members of management. It is chaired by the Chairman of the board.
| Members | Attendance | Standing invitees |
| Chairman: GW Dempster | 4/4 | OS Arbee |
|---|---|---|
| Members: | |
OJ Janse van Rensburg |
| MJN Njeke | 4/4 | |
| A Tugendhaft | 4/4 | |
For detail of changes to committee membership, refer to board changes.Performance
During the year, the committee discharged its statutory duties to monitor activities relating to the following:
- Identified candidates to fill vacancies on the board, interviewing and recommending appropriately skilled individuals for appointment by the board and shareholders.
- Reviewed formal succession plans for the board, CEO and senior management appointments.
- Newly appointed director was formally inducted to ensure that she understands the operations of the company and its management.
- Directors, through the ARC and SES Committees and during the reports of various committees as well as the strategy session, received regular briefings on changes in risks, laws and the environment in which the company operates.
- Has considered the performance of directors and so far, a need to take appropriate remedial steps where directors are not fulfilling their responsibilities has not arisen yet.
Remuneration Committee (RemCo)Responsibility
RemCo advises and guides the board on director remuneration, setting and implementing the remuneration policy, approval of the general composition of remuneration packages, and criteria for executive bonus and incentive rewards and administration of share-based incentive schemes.
Johnson (JJ)
Njeke
Membership
The committee comprised three non-executive directors, with standing invitees being members of management. It is chaired by an independent non-executive director.
| Members | Attendance | Standing invitees |
| Chairman: MJN Njeke | 4/4* | OS Arbee |
|---|---|---|
| Members: | OJ Janse van Rensburg | |
| GW Dempster | 4/4 | |
| A Tugendhaft | 4/4* |
For detail of changes to committee membership, refer to board changes.Performance
During the year, the committee undertook various activities in accordance with its terms of reference and its performance can be summarised as follows:
- RemCo regularly benchmarks the remuneration packages of the non-executive directors, executive directors and senior management.
- RemCo also considered and approved:
- The general composition of executive remuneration packages.
- The key performance criteria for short-term incentive (STI) and long-term incentive (LTI) awards, including the composition of the peer group.
- Salary increases, STI and LTI awards made to executive management in accordance with set performance criteria.
- Minimum shares to be held by executive directors and prescribed officers.
- The remuneration of non-executive and executive directors, prescribed officers and business unit leaders.
Full details of RemCo's performance are set out in the remuneration report.