Integrated Report

Corporate governance statement


The Board has committed extensive amounts of time to reviewing and enhancing the Group’s governance structures and activities since the publication of the King III report. As required by the JSE Listings Requirements, the following table discloses the areas in which the Group does not currently fully comply with King III, the reasons for such non-compliance and any corrective measures that the Board has agreed to institute in that regard.

Key to compliance level:
† Under review    ‡ Partially compliant/mitigated    x Non-compliant  
King III Requirement   Comment  
Chapter 1 – Ethical leadership and corporate citizenship  
Establishment of a social and ethics committee.     It is intended that a social and ethics committee be established before 1 April 2012, when such committee becomes mandatory in terms of the Companies Act. The functions of this committee are currently being addressed where appropriate, by other committees.  
Management (having been delegated this task by the Board) has set up a well-designed and properly implemented ethics management process/programme.     Management has addressed all of the material areas relating to ethics management. This will be consolidated through a programme under the direction of the social and ethics committee once established.  
Assessment of the ethics risks and opportunities and compilation of an ethics risk profile.     This has been deferred until the establishment of the social and ethics committee.  
Establishment of policies that will guide every level of the business in terms of expected behaviours and practices with reference to interaction with all material stakeholders.     A Code of Conduct is in place. Consideration will be given to the further expansion of the Stakeholder Engagement Policy.  
Measurement of the impact, or lack thereof, of its CSI programme.     Assessment is conducted on a subjective basis.  
Chapter 2 – Boards and directors  
The Chairman of the Board is an independent non-executive director.     The members of the Board have elected the non-executive director they consider most appropriate to chair the Board as Chairman. A lead independent director has been appointed.  
Succession planning in place for the position of the Chairman.     This will be considered by the Remuneration & Nomination Committee. The lead independent director will assume the role of Chairman in the Chairman’s absence.  
Appointment by the Board of the Chief Executive and input on senior management appointments.     The Group Chief Executive is appointed by the Board but specified senior executive appointments are approved by the Remuneration & Nomination Committee. The Board is kept informed of these appointments.  
The Board comprises a majority of non-executive directors, the majority of whom are independent.     There is a majority of non-executive directors. There are presently four independent non-executive directors and four non-executive directors. Upon the impending retirement of David Nurek, there will be a majority of independent non-executive directors.  
The Board has established an Audit Committee and defined its composition, purpose and duties in the memorandum of incorporation.     This is currently regulated by the Audit Committee Terms of Reference. It is intended to formulate the memorandum of incorporation prior to 1 April 2013, the date by which this is required in terms of the Companies Act. This is under review.  
Board committees (other than the Risk Committee) comprise only members of the Board, have a majority of non-executive directors, the majority of whom are independent and have an independent non-executive director as chair.     The Transformation Committee does not have a majority independent non-executive directors or an independent non-executive director as Chairman. The Transformation Committee is chaired by the Group Chief Executive as an indication of his commitment to this work and all interested non-executive directors are invited to be members of this Committee.  
Chapter 3 – Audit committees  
Recommend to the Board to engage an external assurance provider to provide assurance over material elements of the sustainability part of the Integrated Report.     At this stage of the development of the Integrated Report, it has been decided to rely upon internal sources of assurance.  
Preparation of a summarised Integrated Report in addition to the complete Integrated Report.   x   It has been decided not to produce a summarised Integrated Report as is permitted by the Companies Act.  
Chapter 4 – The governance of risk  
Accountability to the Board regarding the execution of the risk management process lies with the Group Chief Executive.     Accountability lies with the Deputy Group Chief Executive.  
Specific limits regarding the levels of risk that the Group is able to tolerate are set by the Board at least once a year.     Risk limits are set at least once a year based upon a range of tolerance.  
Chapter 5 – The governance of information technology  
Management is in a position to provide the Board with demonstrable evidence that adequate disaster recovery arrangements are in place.     A full formal disaster recovery plan is in place for the Group’s material enterprise resource planning systems, which is regularly tested. The disaster recovery plans for all affiliates will be reviewed as part of the roll-out of the IT Governance Charter towards the end of the calendar year. A risk-based disaster-recovery strategy will be implemented that will integrate into the Business Continuity Plans of each affiliate.  
Formal processes are in place to manage information that encompasses protection of information, management of information and protection of personal information processed.     Normal security procedures are in place. Information is managed according to business requirements and personal information is identified on the system where it resides. As part of the roll-out of the Information Security Management System an Information Classification Framework will be implemented for each affiliate.  
Ensure the Information Security Management System is developed, implemented and recorded.     An information security policy exists, but a formalised Information Security Management System needs to be implemented. The implementation of the Information Security Management System for the South African affiliates is currently in progress and will be completed by March 2012. This template will be rolled out to the other affiliates.  
Chapter 7 – Internal audit  
The Chief Audit Executive is apprised formally on the strategy and performance of the Company through meetings with Chairman, Group Chief Executive or both.     The Chief Audit Executive’s channel of communication is with the Deputy Group Chief Executive.  
Chapter 8 – Governing stakeholder relationships  
The Board has adopted communication guidelines that support a responsible communication programme, which defines the responsibilities of the Board and management in regard to stakeholder communication.     A communication plan has been developed. further guidelines are under consideration.  
Chapter 9 – Integrated reporting and disclosure  
The Annual Financial Statements are included in the Integrated Report.     Aspects of the Annual Financial Statements are included in the integrated Report. The full Annual Financial Statements are included in the Annual Report, comprising the Integrated Report, the Sustainability Report, the Annual Financial Statements and Shareholders’ Information.  
A formal process of assurance with regard to sustainability reporting has been established.     At this stage in the evolution of the Group’s sustainability reporting, reliance is placed on internal assurance.