In compliance with the recommended practices of King IV, the Board consists of 13 directors, three of whom are executive and 10 of whom are non-executive directors. Seven of the non-executive directors are independent. The composition of the Board reflects a balance between executive and non-executive directors, in order to ensure that there is a clear division of responsibilities so that no one individual has unfettered decision-making powers.
Executive directors contribute their insight to day-to-day operations, thereby enabling the Board to identify goals, provide direction and determine the feasibility and sustainability of the strategies proposed. These directors are generally responsible for implementing all operational decisions.
Non-executive directors, on the other hand, are selected to serve on the Board for their broader knowledge, skills and experience, which is needed to govern Remgro; and they are expected to contribute effectively to decision-making and the formulation of policy.
The Board promotes diversity in its membership across a variety of attributes, including field of knowledge, skills and experience, age, culture, race and gender. The Remuneration and Nomination Committee has adopted race and gender diversity policies. The policy on the promotion of race diversity and the gender diversity policy apply only to the Board and although formal targets are not set, the Remuneration and Nomination Committee pursues all opportunities to enhance the gender and race diversity of the Board. The Board has transformed, with five of the 10 non-executive directors (50%) being black persons, six of all 13 directors (46%) being black persons, and two of all 13 directors (15%) being females and, on Management Board level, two of the six members are black persons, and one of the six members is a female.
The Board is satisfied that its current members possess the required collective knowledge, skills and experience to carry out its responsibilities, to achieve the Remgro Group’s objectives and create shareholder value over the long term. Details on each individual director can be found here.
Nomination, election and appointments
There is a formal and transparent process for appointments to the Board. The appointment of directors is a function of the entire Board, based on recommendations made by the Remuneration and Nomination Committee.
When considering nominations, the Board considers the collective knowledge, skills and experience required by the Board, the diversity of the Board and whether the candidate meets the appropriate fit and proper criteria.
The candidates for non-executive members of the Board must provide the Board with details of their professional commitments and confirm that the candidate has sufficient time available to fulfil the responsibilities as member of the Board. All nominated candidates’ backgrounds are independently investigated, and their qualifications independently verified.
A brief professional profile of each candidate standing for election at the Annual General Meeting, including details of existing professional commitments, accompanies the notice of the Annual General Meeting, together with a statement from the Board confirming that it supports the candidate’s election and/or re-election.
Newly appointed directors follow an extensive induction programme coordinated by the Company Secretary upon their appointment, to ensure that they are able to make a maximum contribution in a shorter amount of time. The induction programme includes the provision of an induction pack consisting of, inter alia, agendas and minutes of the two most recent Board and subcommittee meetings, the latest Annual Financial Statements and Integrated Annual Report, Remgro’s Code of Ethics, induction meetings with executive directors and senior management (if requested) as well as information on the JSE Listings Requirements. This process ensures that new directors obtain a good understanding of Remgro’s core business and their fiduciary duties.
Regular briefings on legal and corporate governance developments, and risks and changes in the external environment of Remgro, are provided to directors.
In terms of the Memorandum of Incorporation of Remgro, at least one third of the directors must resign annually on a rotation basis, but may make themselves available for re-election for a further term. The directors to retire shall be those who have been longest in office since their last election. A director who has already held his or her office for a period of three years since his or her last election shall retire at such meeting. Mr W E BÃ¼hrmann retired as an executive director of Remgro on 30 April 2018 upon reaching the normal retirement age for Remgro employees.
Nomination for re-election only occurs after the evaluation of the performance of the Board and is therefore based on the director’s past performance, including attendance at Board meetings and its committee meetings, the director’s contribution and his or her objectivity of business judgement calls.
The Board has established a succession plan for its directorship.
Independence and conflicts
The independence of non-executive directors who are categorised as independent is reviewed annually; and the independence of independent, non-executive directors who have served on the Board for more than nine years is subject to a rigorous review by the Board. The Board assesses independence in light of any interest, position, association or relationship which, when judged from the perspective of a reasonable and informed third party, is likely to influence unduly or cause bias in the decision-making of a non-executive director who is categorised as independent. The tenure of each director is disclosed here.
Each director must submit to the Board a declaration of all financial, economic and other interests held in Remgro by the director and his or her related parties whenever there are significant changes and as soon as they become aware of it. At the beginning of each Board meeting, Board members and committee members are also required to disclose any conflict of interest in respect of a matter on the agenda. Any such conflicts are proactively managed as determined by the Board, subject to legal provisions.
All information not disclosed publicly, which directors acquire in the performance of their duties must be treated as confidential and may not be used for personal advantage or for the advantage of third parties. In this regard, directors must comply with inter alia Remgro’s Code of Ethics, the provisions of the Financial Market Act, No. 19 of 2002 (regarding “inside information”), and the JSE Listings Requirements (regarding “price-sensitive information”), in any disclosure of information, dealings in securities and the disclosure of such dealings.
The Chairman is elected by the Board on an annual basis, along with two deputy chairmen. The roles and responsibilities of the Chairman is documented in the Board Charter and is separate from the CEO.
The Chairman of the Board, Mr Johann Rupert, is not an independent director. The Board acknowledges the recommended practice of King IV to appoint an independent non-executive director as Chairman, but given his knowledge of the business and his commercial experience and the responsibility of the Board to focus on performance in directing the commercial and economic fortunes of Remgro, this arrangement is deemed not only appropriate, but also essential for achieving the business objectives of Remgro. However, in compliance with King IV and the JSE Listings Requirements, the Board has appointed Mr G T Ferreira as the LID. The main function of the LID is, inter alia, to provide leadership and advice to the Board, without detracting from the authority of the Chairman, when the Chairman has a conflict of interest. The responsibilities of the LID are documented in the Board Charter. The LID is appointed by the Board on an annual basis.
The Board is satisfied with the number of outside professional positions that the Chairman holds, and is confident that such positions do not hinder him from performing his duties. The Board has established a succession plan for the position of chairman.