THE BOARD

Board structure
The group has a unitary board structure with eleven non-executive directors, ten of whom are considered independent, one who is considered non-independent and three executive directors. The board therefore has a majority of non-executive directors. The Chairman of the board is a non-independent director.

A number of board committees assist the board in fulfilling its stated objectives. The role and responsibilities of each committee are set out in their formal terms of reference. The audit committee has additional responsibilities given to it by virtue of the Companies Act. The terms of reference for the company and its subsidiaries are reviewed annually to ensure that they remain relevant.

Board responsibilities
The board is the custodian of corporate governance and it is responsible for ensuring that the group is conducted along sound corporate governance principles, by approving key policies and ensuring that the obligations to shareholders and other stakeholders are met.

The board is responsible for adopting strategic plans and through the monitoring of operational performance, provides management with effective leadership in line with Woolworths ethical values whilst understanding that strategy, risk, performance and sustainability are inseparable.

The board is guided by a charter which is reviewed annually. 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 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. There are a number of governance policies which complement the delegation of authority. These include:

• a conflicts of interest policy;
• an external auditor independence policy;
• an insider trading policy; and
• a price-sensitive information policy

Chairman and Group Chief Executive Officer
The responsibilities of the Chairman and the Group chief executive officer are clearly separate. No individual has unfettered powers of decision-making.

Simon Susman is a non-independent Chairman who is responsible for providing overall leadership of the board and ensuring that the board receives accurate, timely and clear information so as to ensure that the directors can perform effectively.

The Group chief executive officer is responsible for formulating and recommending to the board long-term strategies and policies and, through the approved framework of delegated authority, ensuring their implementation.

Directors
Ten of the non-executive directors, are independent directors as defined in the King III Report and the guidelines outlined in the JSE Listings Requirements.

The Chairman is classified as non-independent as he held the role of Group chief executive officer within the prior three-year period. Tom Boardman has been appointed the lead independent director.

Independent thought is brought to bear on board decisions with the majority of independent non-executive directors. The board structure and integrity of individual directors ensure no one individual dominates the decision-making process.

To uphold their independence and integrity, directors disclose all material interests as and when they arise. A full list of directors’ interests is tabled annually at the August board meeting 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.

New directors participate in an induction programme that is adjusted as necessary to meet the specific needs of the appointed directors. The directors are provided with all the necessary documentation in order to familiarise themselves with the company and 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.

In accordance with the articles of association of the company, a minimum of one-third of the board is 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.

Board and committee 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. The composition of the board committees is also reviewed on an annual basis. The board has recognised the important role that the risk committee has in the induction of new directors and aims to rotate new directors through this committee for a two-year period.

The board and its committees’ effectiveness is evaluated on a bi-annual basis. A significant amount of time is committed to the evaluations and therefore it is considered appropriate for them to be conducted bi-annually. Previous reviews have shown that there are no significant areas of improvement required. Annual reviews may be implemented if the review indicated that significant actions were required.

Board meetings
The board meets four times a year. Additional meetings may be held whenever deemed necessary. The Chairman, in consultation with the Chief executive officer and Group secretary, is responsible for setting the agenda of each meeting. Board meetings are scheduled well in advance and management ensures that board members are timeously provided with all the relevant information and facts to enable the board to reach objective and well-informed decisions.

The chairman of each committee reports back to the board on matters discussed after every meeting. The minutes of all board and strategy meetings are circulated to all directors.

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 following:

• 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. The directors have unlimited access to the advice and services of the Group secretary.