Corporate governance

Governance structure

Scaw Board of Directors

Executive Directors

Markus Hannemann (CEO)

Independent
Non‑executive Directors

Neo Mokhesi
Nkosemntu Nika
Vusi Twala

Non‑executive Directors

Ufikile Khumalo (Chairman)
Lucas Tseki
Nokuzola Tsotsotso1
Ashley Ally2
Ortal Sharp2 (alternate)
Sechaba Serote* 1 (alternate)

Sub‑committees

Audit and Risk Committee

Nkosemntu Nika
(Chairman)
Ashley Ally
Vusi Twala

Remuneration Committee

Vusi Twala (Chairman)
Ashley Ally
Lucas Tseki
Neo Mokhesi

Social, Ethics and Transformation Committee

Neo Mokhesi (Chairperson)
Nkosemntu Nika
Nokuzola Tsotsotso
Vusi Twala

Board Investment Committee

Lucas Tseki
Neo Mokhesi
Nokuzola Tsotsotso
Ortal Sharp

Executive Committee

Markus Hannemann (Chairman)
Patrick Malaza
Gerrit van Wyk
Vimla Reddy
Dudu Ndlovu
Ray Abrahams
George Katergarakis
Bheka Khumalo
Steve van Wyk

* Resigned 31 December 2015.

Scaw is committed to applying high corporate governance standards to ensure the group’s ongoing sustainability and the creation of
long-term shareholder value and benefits for other stakeholders.

Applying good corporate governance principles is a dynamic responsibility in line with developments in South Africa and internationally. A table setting out Scaw's compliance with King III appears here.

The Board

Our Directors have a diverse range of qualifications, experience and expertise. In addition, they have an understanding of the complicated and demanding business environment in which we operate and a knowledge of the challenges facing the business.

The Board’s responsibilities include assessing and approving strategic plans, monitoring operational performance and management as well as approving policies and processes for the group’s risk management and internal controls.

The Board comprises eight Directors, three of whom are independent. During the year, it was announced that Executive Chairman, Ufikile Khumalo, was appointed by the company’s majority shareholder, the IDC, to become the new CEO of Foskor Limited with effect from 1 April 2016. As a result of this appointment, his role has changed from Executive Chairman to Non-executive Chairman. However, albeit in a non-executive capacity, he will continue to support the company in managing change, prioritising transformation and providing leadership through the Board, that will enable the company to attract appropriate strategic equity partners for further market penetration and technology transfer while working closely with the IDC.

Independence of Non-executive Directors

The appointment of Directors is a formal process that takes into account the applicable provisions of the company’s memorandum of incorporation (MOI) and the Companies Act, 2008. When appointments to the Board are considered, skills, experience, gender and racial composition are considered. An induction programme is in place for Directors.

The role and responsibilities of the Chairman and the CEO have been clearly defined and are distinct. The Chairman is responsible for the overall leadership of the Board, liaison between the Board and management and particularly between the Board and the CEO. The CEO is responsible for providing strategic leadership, stabilising the business and growing it in line with the strategy approved by the Board, facilitating the positioning of Scaw as a benefactor of steel scrap into value-added secondary steel products and contributing his insight gained from over 20 years at Scaw. The Non-executive Directors draw on their experience, skills and business acumen to ensure impartial and objective viewpoints in decision-making processes and standards of conduct.

The independence of the Non-executive Directors is monitored having due regard to the relevant factors which might impair this. The Board charter provides that self-assessments are to be conducted on an annual basis and every third year an independent external service provider should undertake an independent evaluation.

Board and committee meeting attendance

Directors Board meetings Audit and Risk Committee meetings Remuneration Committee meetings Social, Ethics and Transformation Committee meetings Board Investment Committee meetings
Executive Directors          
Ufikile Khumalo (Chairman)* 7/7 ∧∧∧∧∧ ∧∧∧∧∧ ∧∧∧∧∧ ∧∧∧∧∧
Markus Hannemann (CEO) 7/7 ∧∧∧∧∧ ∧∧∧∧∧ ∧∧∧∧∧ ∧∧∧∧∧
Independent Non-executive Directors          
Nkosemntu Nika 6/7 3/3   2/2  
Vusi Twala∧∧ 7/7 3/3 3/3 2/2  
Neo Mokhesi∧∧∧ 7/7   3/3 2/2 2/2
Non-executive Directors          
Lucas Tseki∧∧∧∧ 7/7   3/3   2/2
Nokuzola Tsotsotso 5/7     0/2 2/2
Ashley Ally 3/7 1/3 2/3   0/2
Ortal Sharp (alternate to A Ally) 4/7 2/3 0/3   2/2
Sechaba Serote** (alternate to N Tsotsotso) 1/7     2/2  
*

∧∧

∧∧∧

∧∧∧∧
∧∧∧∧∧
**
Effective 1 April 2016 Non-executive
Chairman Audit and Risk Committee
Chairman Remuneration Committee
Chair Social, Ethics and Transformation Committee
Chairman Board Investment Committee
By Invitation
Resigned 31 December 2015

Board committees

  Audit and Risk Committee
(click here for full report)
Remuneration Committee
(click here for full report)
Social, Ethics and Transformation Committee
(click here for full report)
Board Investment Committee
Responsibilities
  • The committee has an independent role with accountability to the Board and shareholders
  • Oversees and makes recommendations to the Board for its consideration and final approval
  • Risk management, internal controls, accounting systems and information, accounting policies, internal audit, external audit, information technology systems, protection of assets and public reporting, and monitoring of compliance with laws, rules, codes of conduct and standards
  • Assisting the Board in ensuring that the company implements an effective risk management policy and plan
  • The committee does not assume the functions of management, which remain the responsibility of the Executive Directors, officers and senior management
  • Assisting the Board in ensuring that the company remunerates Directors and executives fairly and responsibly; remuneration is competitive, accurate, complete and transparent
  • Ensuring effective retention, succession planning and talent management is in place
  • Assisting with recruitment of the CEO and CFO, making independent recommendations to the Board for its consideration and final approval
  • The role of the committee is to assist the Board with strategic direction, monitoring and providing oversight of social, ethical and transformation matters related to the company and reporting thereon, as required
The committee has an independent role, operating as a decision maker where applicable and as an overseer and maker of recommendations to the Board for its consideration and final approval. The committee’s functions include the following:
  • Considering and, if appropriate, approving new investments, capex, sale or scrapping of assets, acquisition/merger of businesses, and disposal of existing businesses
  • Reviewing progress with implementation of key projects (capital investment > R75 million)
Number of independent Directors 2 2 3 1

Exco is responsible for the day-to-day management of the company and implementing the strategy approved by the Board.

Company Secretary

The Company Secretary plays a significant role in facilitating good governance, supporting the Chairman and the Board by providing guidance on discharging responsibilities; and ensuring the effective functioning of the Board in accordance with the relevant laws. The Company Secretary also acts as Secretary for the sub-committees of the Board.

Access to the advice and services of the Company Secretary and to company records, information, documents and property is unrestricted. In its annual evaluation, the Board has considered and satisfied itself on the competency, qualifications and experience of the Company Secretary, and that an arm’s length relationship is in place.

The Chairman, in consultation with the CEO and the Company Secretary, is responsible for setting the agenda of each Board meeting. Board meetings are scheduled in advance in order to facilitate decision making and implementation. The Board is timeously provided with all relevant information to enable efficient and well-informed decision making.

IT governance

IT is a standard item on the Board and the Audit and Risk Committee agendas and is included as a formal responsibility in their respective charters. A formal IT strategy is documented and monitored by Exco, which is aligned to Scaw’s vision and strategy.

Exco has delegated implementing the strategy to an IT Steering Committee (ITSC) comprising representatives from business and IT, including the Head of IT who reports into the Executive Head of professional services. The ITSC maintains an IT risk register, comprising IT and operational risks. These risks are reported to the Audit and Risk Committee.

The internal control framework comprises independent assurance to Exco, the Board and the Audit and Risk Committee by internal and external audit that is formally documented and then tracked by internal audit. Over the past year, auditing tasks focused on security aspects of the network, with particular attention given to penetration and security controls of core systems such as enterprise resource planning and email services.

All IT investments are approved by the Board Investment Committee. Capital and operating expenditure including project monitoring is presented at the quarterly Board and Audit and Risk Committee meetings. IT assets are comprehensively protected through day-to-day IT practices, such as being bar-coded before distribution to the business. Assets are also recorded in an information security management system. Scaw’s IT department provides information processing services to all divisions and departments. Using a formal business impact analysis (BIA) of the major systems and business processes, an IT disaster recovery plan was developed and is maintained by performing two recovery tests a year.