Bidvest
The Bidvest Group Limited
Annual report 2008
 
 
Corporate governance  
 
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THE BOARD OF DIRECTORS

Bidvest is a unique company, which is reflected in the composition and size of its board. The board comprises six non-executive independent directors, six non-executive, 11 executive and one alternate director.

MC Ramaphosa conducted the role of non-executive chairman and B Joffe, chief executive.

The completely decentralised decision-making structure, the independence and the character of the individual board members provide for open and transparent governance. Successful entrepreneurial individuals, whose recognition and ongoing participation in Bidvest is vital, manage the decentralised business units. In addition to the divisional chief executives, key operating executives responsible for significant operations are included on the board.

While the executive directors are responsible for implementing strategies and operational decisions within the Group’s independent by the board and support the skills and experience of the executive directors. Their role is to bring judgement to bear, independent of management, on issues of strategy, budgets, performance, resources, transformation, diversity, employment equity, standards of conduct and evaluation of performance, while contributing to the formulation of policy and decision making through, inter alia, their knowledge and experience.

The board gives strategic direction to the Group, appoints the chief executive and the nonexecutive chairman and ensures that succession is planned. The non-executive directors ensure that the chair encourages proper deliberation of all matters requiring the board's attention.

Functions of the board

The board charter sets out clear direction with regard to the purpose of the board, responsibilities of board members, composition and requirements for board meetings. The board charter also calls for an annual self-assessment applicable to the chief executive and the individual directors. The board is ultimately responsible for ensuring that the business remains a going concern and that it thrives. The board retains full and effective control over the Group and monitors risk management and implementation of plans and strategies through a structured approach to reporting and accountability.

The board is committed to an appropriate balance of power and authority to ensure that no one individual or group of individuals can dominate the board's decision-making process.

The board met five times during the year and has a formal schedule of matters reserved to it as recorded in the board charter, (refer to the The board has developed a formal corporate governance manual which, inter alia, includes a corporate code of conduct and board committee charters.

Board committee charters define the purposes, authority and responsibility of the various board committees and have been developed for the:
  • board of directors;
  • executive committee;
  • audit committee;
  • nomination committee;
  • remuneration committee;
  • acquisition committee;
  • risk committee (including the sustainability committee);
  • and transformation committee.

The divisional boards have adopted the governance manual, where applicable. The process to entrench the corporate governance manual and the principles of good corporate practice and governance throughout the Group has been implemented under the auspices of the audit committee.

The board and its committees are supplied with complete, relevant and timeous information, enabling them to fulfil their responsibilities. Directors have unrestricted access to Group information, records, documents and property. Non-executive directors have access to, and are encouraged to meet with, management. The information needs of the board are well defined and regularly monitored. All directors have access to the advice and services of the Group secretariat and there is an agreed procedure by which directors may obtain independent professional advice at the Group’s expense, should they deem this necessary.

The Group has adopted a formal policy, in line with the Insider Trading Act, that prohibits directors, officers and other selected employees in dealing with securities for a designated period preceding the announcement of its financial results up until the last date to register in respect of any distribution or in any other period considered sensitive.

The board defines levels of materiality, reserving specific power and delegating other matters with the necessary written authority to management. These matters are monitored and evaluated on a regular basis. The board has developed a formal delegation of authority matrix guideline, which is being utilised by all Group companies.

Formal and transparent appointment procedures are in place and the board is assisted by the nomination committee. Periodically, directors visit the with senior management to facilitate their understanding of the Group and their fiduciary responsibilities.

The board is cognisant of the duties imposed on the company secretary who is accordingly empowered to properly fulfil those duties. In addition to the extensive statutory duties, the company secretariat provides the board and directors individually with detailed guidance as to how their responsibilities should be properly discharged in the best interests of the Group. The company secretariat is the central source of information relative to guidance and advice to the board, and within the Group, on matters of ethics and good governance.

The board ensures that the Group complies with all relevant laws, regulations and codes of business practice and that it communicates with its shareholders and relevant internal and external stakeholders openly, promptly and with substance prevailing over form.

The board identifies the key risk areas and key performance indicators for the Group, which are regularly updated. The entrepreneurial culture of the Group requires thorough risk control processes that identify and mitigate risks and ensure that the attained. This control environment sets the tone for the Group and covers, inter alia, ethical values, management’s philosophy confronting the Group are:
  • currency and economic volatility;
  • HIV/Aids in Africa;
  • human capital or “people risk” mitigated through intensive skills development programmes;
  • market risk caused by fluctuations in demand and competitive activity;and
  • liquidity, credit and market risks.

The most fundamental mechanism for managing these risks is the diversified Bidvest business model that makes entrepreneurial-managers accountable for all aspects of performance and delivery.

Through the audit committee, the board regularly reviews processes and procedures to ensure the effectiveness of internal systems of control so that its decision-making capability and the accuracy of its reporting are maintained at a high level. The board identifies and monitors the non-financial aspects relevant to the business of the Group and reviews appropriate nonfinancial information that goes beyond assessing the financial and quantitative performance of the Group. Other qualitative performance factors, which take into account broader stakeholder issues, are considered.

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