integrated

Corporate governance / Intergrated Annual Report
 

Corporate governance

Introduction

Corporate governance is integral to the success and sustainability of Implats, and the board is therefore committed to ensuring that its policies and practices support and reflect this ethos throughout the Group. The board is also committed to the highest levels of integrity and ethics in the conduct of its business.

In order to ensure that the Company remains at the forefront of best corporate governance practices, compliance with the King III Code on Corporate Governance (King III) and the Companies Act remains high on the board’s agenda. The board has satisfied itself with the extent of the Company’s compliance with the King III Report and with the JSE Listings Requirements during the financial year ended 30 June 2013 and a table setting out how the Group has applied the principles of KingIII is contained on the Company’s website, www.implats.co.za. The table also highlights any exceptions with the application of King III.

During the year under review, additional enhancements and refinements were made to the policies, procedures and strategy of the Company, to further align the Company with the principles of King III and the requirements of the new Companies Act.

These included:
  • Revisions to the board charter and terms and reference of the various committees
  • The approval of a “trading in shares and securities” policy
  • The adoption of the Company’s memorandum of incorporation, as approved by shareholders at the AGM held in October 2012
  • The approval by shareholders of a new “Long-term Incentive Scheme” which is strongly aligned with the principles of King III, particularly in terms of performance-related incentives.

The board continues to recognise the importance of effective governance in creating long-term value for all its stakeholders. This understanding and recognition continues to guide the board in its vision to lead the Company with practices based on transparency, accountability, integrity and ethical leadership.

Board of directors

The board has 14 directors, comprising nine independent non-executive directors, two non-executive and three executive directors. Dr KDK Mokhele, an independent non-executive director, is chairman of the board. Mr TP Goodlace is the chief executive officer (CEO) and an executive director. The roles of the chairman and CEO are distinctly separate.

Changes to the board

Mr JM McMahon stepped down as an independent non-executive director at the conclusion of the annual general meetingheld on 24 October 2012. Following recommendation by the nominations and governance committee, Mr AS Macfarlane and Mr PW Davey were appointed as independent non-executive directors with effect from 1 December 2012 and 1 July 2013 respectively.

The board also approved the following appointments, effective 8 August 2013:
  • Ms A Kekana – representing Royal Bafokeng Holdings
  • Mr BT Nagle – representing Royal Bafokeng Holdings
  • Mr OM Pooe – alternate to Ms A Kekana (following his resignation as a full director)
  • Mr TV Mokgatlha – independent non-executive director (following his resignation as a representative of Royal Bafokeng Holdings).
Education and induction

Upon appointment, new directors are offered an induction programme tailored to their specific requirements. During the year under review, meetings with operational executives were arranged to assist the new directors in gaining an intimate understanding of the business on specific points of interest.

At the quarterly board meetings, directors are kept abreast of all applicable legislation and regulations, changes to rules, standards and codes as well as relevant sector developments that could impact the Group and its operations. All education and training programmes are, where necessary, supplemented by external courses.

Role and function of the board

The board fully embraces the principle of ethical leadership in setting and implementing the strategy of the Company, guided by the principles of the King III, the Companies Act, the JSE Listings Requirements and all other applicable laws, standards and codes. In addition, the board takes full responsibility for the management, direction and performance of the Company by exercising independent judgement on all issues reserved for its review and approval while taking cognisance of the needs of all stakeholders. The role and functions of the board are formally and comprehensively documented in a board charter which, inter alia, defines the rights, obligations, responsibilities and powers of the board. The board functions as a unit and through its sub-committees and the management executive committee. A formal delegation of authority (approval framework), which further defines the powers and authority of the board and those of its sub-committees, is in place.

Frequency of meetings

The board meets at least seven times a year. In addition to four quarterly board meetings, three full-day sessions are held annually. On two of these occasions the board meets with the senior executive team to consider and approve long-term strategy or any adjustments to the approved strategy when the need arises and also to approve the budget and business plans. The third full-day session is dedicated to board education and training. The board meets on an ad hoc basis to consider specific issues as the need arises. The status of identified strategic issues is reported and monitored at the quarterly board meetings. Non-executive directors meet both officially and unofficially with management on a regular basis.

Meeting attendance  
Directors   15/08/12 10/09/12* 26/09/12* 15/11/12 03/12/12 08/02/13 30/05/13 24/06/13*
KDK Mokhele (Chair)
TP Goodlace
B Berlin  
HC Cameron  
PA Dunne  
MSV Gantsho  
TP Goodlace  
AA Maule  
AS Macfarlane  
JM McMahon  
TV Mokgatlha   A  
B Ngonyama   A
NDB Orleyn   A  
OM Pooe   A A A**

A= Apology.
–= Meeting not applicable.
= Special meeting.
*= Full director did not attend the meeting in order to facilitate the attendance of the alternate director.

Board committees

The board has delegated various duties to the appropriate sub-committees, as specified by relevant legislation, to ensure the fulfilment of their duties in the time available. The board remains ultimately responsible for these duties and decisions. Board committees provide feedback to the main board through their chairmen. Each board committee is chaired by an independent non-executive director. The composition of board committees is compliant with the recommendations of King III, with the exception of the risk committee which composition fell below the stated minimum of three members until the appointment of Mr PW Davey on 1 July 2013.

Audit committee
Members of the audit committee were appointed by shareholders at the annual general meeting in October 2012. The committee comprises independent non-executive directors, all of whom are suitably qualified to carry out the duties specified. The terms of reference of the committee were reviewed and approved by the board during the year under review. In summary, the main purposes of the committee are:
  • Monitoring the integrity of the integrated annual report and other relevant external financial reports of Implats, and reviewing all significant inputs, judgements and outputs in order to present a balanced and understandable assessment of the position, performance and prospects of Implats, as appropriate
  • Preparing a report to be included in the annual financial statements in terms of section 94(7)(f) of the Companies Act.
  • Reviewing the annual financial statements, the interim, preliminary or provisional results announcements and financial information which is to be made public
  • Reviewing the Company’s internal financial control and financial risk management systems in order to safeguard Implats’assets
  • Monitoring and reviewing the effectiveness of Implats’ internal audit function
  • Appointment of the external auditors, approving the remuneration and terms of engagement of the external auditors and monitoring their independence, objectivity and effectiveness, taking into consideration relevant professional and regulatory requirements
  • Regulating the use of the external auditors for non-audit duties in terms of a policy document which governs the use of external auditors for non-audit services
  • Receiving and dealing appropriately with any concerns or complaints about the Company’s auditing function or financial reporting, whether from within or outside the Company, in terms of section 94(7)(g) of the Companies Act
  • Assisting with the establishment and reviewing of statements or requirements on ethical standards
  • Ensuring the application of a combined assurance model to provide a coordinated approach to all assurance activities.

The committee has unrestricted access to all Company information, may seek such information from any employee, and may consult external professional advisers in executing its duties. The internal and external auditors have unlimited access to the chairman of the committee and they meet at least once a year, individually, with the board chairman.

The audit committee has, in the past financial year, satisfied its responsibilities in compliance with the new Companies Act as amended, and its terms of reference. Membership of the audit committee and attendance of its meetings during the year was as follows:

Directors   20/07/12   08/08/12   14/11/12   06/02/13   05/04/13   23/05/13  
JM McMahon*  
HC Cameron  
AA Maule  
B Ngonyama  

* Resigned on 24 October 2012.


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