INTRODUCTION
As corporate governance and sustainability are essential for
stakeholders of the Naspers group, the board of directors
aspires to conduct the group’s business with integrity. The
board of directors is committed to applying appropriate
corporate governance policies and practices in each company
in the group.
Naspers is a multinational media entity with operations in
Africa, South America, Asia, Europe and the USA. Its primary
listing is on the JSE Limited (JSE). The company is therefore
subject to the Listings Requirements of the JSE, the guidelines
contained in the King Report on Corporate Governance for
South Africa 2002 (King II), as well as legislation applicable
to publicly listed companies in South Africa.
Independent boards of directors, all of which have
established their own governance practices and
subcommittees that comply, as appropriate to the companies,
with the necessary governance and regulatory requirements,
govern several of Naspers’s subsidiaries.
During 2007, the company decided to delist its American
Depositary Shares (ADSs) from NASDAQ and terminate
registration of the ADSs with the Securities and Exchange
Commission (SEC) in the USA. Naspers converted its
American Depositary Receipt (ADR) programme into a
Level I ADR programme. Its application to list its ADSs on the
London Stock Exchange (LSE) was also successful. Level I
ADRs are traded in the USA on an over-the-counter (OTC)
basis. International investors are therefore able to buy and
sell Naspers securities either through the Level I ADR OTC
market, the LSE or the JSE.
Naspers was listed on the LSE in the third quarter of
2007. As this is a secondary listing, Naspers is not required
to adhere to the corporate governance requirements set out
under the UK’s Combined Code. Certain LSE Listings
Requirements must, however, be complied with.
Compliance with both the JSE and applicable LSE Listings
Requirements is monitored by the audit and risk
management committee of the board. During the previous
financial year, Naspers also complied with the requirements of the US Sarbanes-Oxley Act of 2002. Although there is
currently no formal obligation to comply with this act,
internal control policies and procedures implemented to
become compliant will be retained where appropriate.
The board’s audit and risk management, human resources
and nomination committees fulfil key roles in ensuring good
corporate governance. The group uses independent external
advisors to monitor regulatory developments, locally and
internationally, to enable management to make
recommendations to the Naspers board and the boards of
major group companies on matters of corporate governance.
IMPROVEMENTS MADE DURING THE PAST
YEAR AND PLANS FOR THE YEAR AHEAD
The board has a process to annually review the effectiveness
and role of the board and its chair, as well as the effectiveness
of the respective board committees. Self-assessment of the
audit and risk management committee includes a focus on
the key competencies of the committee. Those subsidiaries
with their own audit committees follow the same practice.
The nomination committee was established as a separate
entity (previously combined with the human resources
committee) during the year.
Subsidiaries took further steps to entrench their
respective codes of business ethics in their operations
through appropriate training initiatives.
Whistle-blowing facilities are in place at most of the
major subsidiaries locally and abroad where allowed. They
make provision for employees to anonymously report
unethical conduct in the workplace.
Planning and reporting on the group’s corporate social
investments has been reviewed.
For the ensuing financial year, Naspers will continue to
evaluate areas where governance at a corporate and
subsidiary level can be strengthened. The implications of the
new proposed Companies Bill in South Africa, as well as the
King III Code on Corporate Governance (currently under
review) will also be analysed and appropriate steps taken.
STATEMENT OF COMPLIANCE
The Listings Requirements of the JSE require that JSE
companies report on the extent to which they comply with
the principles set out in King II. The board, to the best of its
knowledge, believes that throughout the period under review
the company has applied the principles of King II.
While the board believes that the company complies with
the appropriate governance requirements, it recognises that
practices and procedures can always be improved, and
therefore reviews progress annually |
