board structures and responsibilities
The group has a unitary board structure with nine independent non-executive directors, including the Chairman of the board and four executive directors. The board provides strategic direction and leadership to enhance shareholder value and ensure long-term sustainable growth of the group.
A number of board committees assist the board in fulfilling its stated objectives. The role and responsibilities of each committee are set out in formal terms of reference, which are regarded as dynamic documents and are reviewed annually to ensure that they remain relevant.
board responsibilities
The responsibilities of the board are set out in the board charter and include:
- defining the business’s strategic intent and objectives;
- reviewing executive performance in achieving pre-agreed plans and budgets;
- ensuring that:
- our people continue to subscribe to the entrenched company values;
- the company acts responsibly to all stakeholders including customers, employees, suppliers, franchisees, shareholders, government and local communities;
- succession plans are in place at senior levels and the group has a strong and motivated pool of talent;
- there is an effective risk management process and system of internal control; all relevant laws, regulations, and accounting principles are complied with;
- establishing committees to assist the board in discharging its responsibilities and setting the terms of reference for such committees; and
- evaluating and improving the effectiveness of the board and its committees.
There is a formal delegation of authority, which sets out the categories of business decisions which require approval by the board and/or by one of its committees. Compliance with this delegation of authority is the responsibility of the board and is monitored by the Group secretary and the corporate governance department.
chairman and chief executive officer
The responsibilities of the Chairman and the Chief executive officer remain clearly separate. No individual has unfettered powers of decision-making. Buddy Hawton is an independent non-executive Chairman who is responsible for providing overall leadership of the board and ensuring that the board operates effectively. The Chief executive officer, Simon Susman, is responsible for formulating and recommending to the board, strategies and policies and ensuring their implementation once approved by the board.
board effectiveness
The board, through its nominations committee, regularly reviews its size and the required mix of skills and experience needed to provide strategic direction and leadership whilst ensuring that the board is representative. Independent thought is brought to bear on board decisions by a strong contingent of independent non-executive directors. The board structure and integrity of individual directors ensure no one individual dominates the decision-making process.
The formal effectiveness evaluation requires each director to complete a questionnaire assessing the board effectiveness in the categories of board size and composition; terms of reference; agenda and meeting preparation; board meetings; board functioning and processes; board committees; leadership and support; board effectiveness and evaluation; and board orientation and development. Under taken every two years, the latest evaluation shows improvement and overall performance as good. The Chairman of the board is responsible for determining the actions required in order to address any areas of improvement required to further enhance the effectiveness of the board.
directors
All non-executive directors, including the Chairman, are independent directors as defined in the King II Report and the guidelines outlined in the JSE Listings Requirements. To uphold their independence and integrity, directors disclose all material interests as and when they arise, and a full list of directors’ interests is tabled annually and any amendments are formally tabled on a quarterly basis. Directors recuse themselves from any discussion and decision on matters in which they may have a potential conflict of interest.
The non-executive directors have unrestricted access to all company information, records, documents and property; and have access to management and may meet separately with them without the attendance of executive directors. Each quarter the non-executive directors meet together to discuss matters of concern in a forum that does not include the executive directors or senior management. The directors may, at the expense of the company, seek professional advice on matters concerning the affairs of the group, and a policy is in place which contains guidelines on this matter.
The board induction programme is designed, and adjusted as necessary, to meet the specific requirements of all new directors. The directors are provided with all the necessary documentation in order to familiarise themselves with issues affecting the board. The directors also participate in an attachment programme with all the relevant executive directors and senior management, and undertake site visits to stores, suppliers and distribution centres to assist their understanding of the broad dynamics of the business. The Group secretary manages the formal induction programme. The board recognises that understanding the business is an ongoing process and as such, the Chairman of the board and the Group secretary ensure an appropriate quarterly programme is in place to update non-executive directors on key new business developments and initiatives.
In accordance with the articles of association, one-third of the directors are subject to retirement and re-election by shareholders each year. The directors who retire are directors appointed since the last annual general meeting and directors due to retire by rotation. A director may not hold office for more than three consecutive years before standing for re-election. The curriculum vitae of each director standing for re-election are set out in the notice of the annual general meeting.
board meetings
The board meets at least four times a year, and additional meetings are held whenever deemed necessary. Board meetings are scheduled well in advance and management ensures that board members are provided with all the relevant information and facts to enable the board to reach objective and well-informed decisions. Board documentation is provided timeously to directors.
board committees
The formal effectiveness evaluation conducted by the board was also undertaken by each board committee in 2009.The Chairman of each committee is responsible for determining the actions required to address the identified areas requiring improvement in order to enhance effectiveness. In order to fulfil their responsibilities, the board committees have unreserved access to company information, resources and professional advice.
By invitation, the Chief executive officer attends all the committee meetings of which he is not a member. This demonstrates the commitment to effective corporate governance within the group.
group secretary
The board is cognisant of the duties of the Group secretary and has created an environment in which the Group secretary is able to ensure that board procedures and relevant regulations are fully adhered to. The Group secretary plays a significant role in the induction of new directors; tabling to the board relevant information on regulatory and legislative changes; guidance to directors individually and collectively on their duties and responsibilities to the company; providing guidance and advice to the board on matters of ethics and good governance; and providing the communication link with investors, shareholders, interested third parties and with the company’s share registrars. The Group secretary acts as secretary for the committees of the board, as required by the King II report.
The directors have unlimited access to the advice and services of the group secretary.
