Board of directors

Board charter and responsibilities

The Board has a formal charter which:

• identifies, defines and records the responsibilities, functions and composition of the Board; and
• serves as a reference for new directors.

All directors of Remgro have endorsed the charter and a copy of the charter is available for inspection on here.

Key responsibilities in terms of the charter include the following:

• ensuring that the Board’s composition incorporates the necessary skills and experience;
• appointment of new directors;
• the annual appointment and evaluation of the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO);
• addressing all aspects that are of a strategic or material nature or that can impact the reputation of Remgro;
• directing the ethical standards, strategy and operations of the Group to build a sustainable business, while considering the short and long-term impact of the Group’s strategy on the economy, society and the environment;
• monitoring compliance with laws and regulations and codes of best business practice;
• ensuring that relevant and accurate information is timeously communicated to stakeholders;
• ultimate responsibility for the strategic direction, risk appetite, performance and affairs of Remgro;
• approval of new investments or extension of existing investments for amounts more than R500 million, as well as the disposal of existing investments for amounts more than R500 million;
• monitoring the operational and investment performance of Remgro;
• empowerment of executive management to implement operational and investment plans and strategies in terms of delegated authorities;
• risk management and IT governance;
• ensuring that sustainability reporting is integrated with financial reporting;
• the promotion of good governance by its subsidiaries, including the adoption and implementation of Remgro’s policies, processes and procedures by subsidiaries;
• ensure that the remuneration of directors and senior management is determined in terms of the Remuneration Policy; and
• at least twice a year, consider the going concern status of Remgro.

The Board is satisfied that it has discharged its duties and obligations as described in the Board charter during the past financial year. Only minor amendments were made to the Board charter during the year under review.

Remgro has a fully functional Board that leads and controls the Group. All issues of a material or strategic nature, or which can impact on the reputation of the Group, are referred to the Board. Other issues are dealt with by the Management Board and/or the Investment Committee, or by senior management as permitted in terms of a formal delegation of authority. The Board meets at least five times a year and follows an annual work plan to ensure that all relevant matters are dealt with. Members of the Board and subcommittees receive an agenda, together with supporting documentation, at least one week prior to each meeting in order to enable them to be fully prepared. All directors have unlimited access to the services of the Company Secretary and senior management, as well as to all Company records.

Composition of the Board

Details of the directors of the Company appear here

The composition of the Board reflects a balance of executive and non-executive directors, of whom the majority are independent, in order to ensure that there is a clear balance of authority so that no one individual has unfettered decision-making powers. As at year-end the Board consisted of four executive and 10 non-executive directors of whom seven were independent. Non-executive directors are selected to serve on the Board for their broader knowledge and experience and are expected to contribute effectively to decision-making and the formulation of policy. The independence of independent non-executive directors is reviewed annually and the independence of non-executive directors who have served on the Board for more than nine years, is subject to a rigorous review by the Board.

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.

The Board will not comprise fewer than six or more than 19 directors, or any other number as the Board may from time to time determine. The Board is satisfied that its current members possess the required collective skills and experience to carry out its responsibilities, to achieve the Group’s objectives and create shareholder value over the long term. In terms of the Memorandum of Incorporation of the Company 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 office for a period of three years since his last election shall retire at such meeting.

The roles and responsibilities of the Chairman of the Board and the CEO are separated. The Chairman, the Deputy Chairmen, the CEO and the CFO are all elected and/or appointed on an annual basis.

As mentioned earlier, the Chairman of the Board is not an independent director. The Board acknowledges the principle in the King Report to appoint an independent non-executive director as Chairman but, given 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. In compliance with King III and the JSE Listings Requirements, the Board has appointed Mr G T Ferreira as Lead Independent Director (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 LID is appointed by the Board on an annual basis.

The CEO, Mr Jannie Durand, is responsible for the day-to-day management of the Company and he is assisted in this regard by Mr Neville Williams (CFO). Between the two of them they have 44 years of service working for Remgro and Remgro-related businesses.

Evaluation of the Board, subcommittees and individual directors

The Board and subcommittees are evaluated annually by their members. The results of these evaluations are not disclosed in the Integrated Annual Report, but the nomination for reappointment of directors only occurs after the evaluation of the performance of the Board. The Board determines its functions, duties and performance criteria, as well as those for subcommittees, to serve as a benchmark for the performance appraisals.

The Board is satisfied with the independence of independent non-executive directors, including the independence of Messrs Fred Robertson and Paul Harris, who have served on the Board for 17 years, as well as Mr Murphy Morobe, who has served on the Board for 10 years. Based on the evaluation there is no evidence of any circumstances and/or relationships that will impair their judgement, and their independence is in no way affected by the length of service.

Induction of new directors

Newly appointed Board members are formally informed of their fiduciary duties by the Company Secretary. Upon their appointment directors receive an induction pack consisting of, inter alia, agendas and minutes of the two most recent Board and subcommittee meetings (if applicable), latest annual financial statements and Integrated Annual Report, the Company’s code of conduct regarding insider trading, Group structure, Board charter and subcommittee mandates, etc. in order to inform them of existing matters and risks that are currently being addressed as well as to provide them with a general understanding of the Group. New Board members are also invited to have induction meetings with executive directors and senior management. In addition new members will also receive information on the JSE Listings Requirements and the obligations therein imposed upon directors.

Members of the Board, subcommittees and individual directors are entitled to seek independent professional advice concerning the affairs of the Group, at the Company’s expense, with prior notification to the CEO or Company Secretary.

Company Secretary’s role and responsibilities

All directors have unlimited access to the services of the Company Secretary, Ms Danielle Heynes, who is responsible to the Board for ensuring that proper corporate governance principles are adhered to and that Board orientation or training is given when appropriate.

The Company Secretary is furthermore responsible for ensuring the proper administration of the proceedings and matters relating to the Board, the Company and the shareholders of Remgro in accordance with applicable legislation and procedures.

The Board annually evaluates the competence and effectiveness of the Company Secretary, as required by the JSE Listings Requirements. The evaluation process includes an assessment by each Board member of the Company Secretary’s eligibility, skills, knowledge and execution of duties. The Board has considered and is satisfied that the Company Secretary is competent and has the necessary experience to effectively execute her duties. A brief curriculum vitae of the Company Secretary is included here.

Board committees

The Board has established subcommittees to assist it in discharging its duties and responsibilities. Each committee has its own mandate/terms of reference that defines its powers and duties. Copies of these mandates and terms of reference, which are reviewed on an annual basis, are available on here.

The minutes of committee meetings are included in the agendas of subsequent Board meetings and issues that require the Board’s attention or a Board resolution are highlighted and included as separate agenda items. Notwithstanding the delegation of functions to Board committees, the Board remains ultimately responsible for the proper fulfilment of such functions, except for the functions of the Audit and Risk Committee relating to the appointment, fees and terms of engagement of the external auditor.

Remuneration and Nomination Committee

The committee consists of four non-executive directors, three of whom are independent. The Company Chairman, Mr Johann Rupert, is also the chairman of the committee, while the head of human resources acts as secretary. The CEO attends all committee meetings by invitation. The composition of and attendance at committee meetings are set out here.

Meetings of the committee are held periodically (but at least once a year) in order to advise the Board on matters such as the remuneration principles and terms of employment of all directors and Management Board members, the Board structure and composition, directors’ remuneration and long-term incentive schemes and succession plans for the Board, CEO and other Management Board appointments.

The committee is responsible for developing and reviewing the Group’s policies with regard to remuneration, gender diversity and race diversity. During the year, the committee reviewed its mandate and the Remuneration Policy, and adopted a gender diversity policy, which the Board approved. There were no amendments to the committee’s mandate during the year under review. The committee also adopted a race diversity policy, which the Board approved on 20 September 2017. The gender and race diversity policies apply to the Board only and although formal targets are not set, the committee pursues all opportunities to enhance the gender and race diversity of the Board.

Remgro’s remuneration principles are set out in the Remuneration Report here. The Remuneration Policy and Remuneration Implementation Report will be tabled for separate non-binding advisory votes on the Company’s forthcoming Annual General Meeting on 29 November 2017.

Audit and Risk Committee

The committee is governed by a mandate that includes the recommendations of King III and the requirements of the Companies Act. The committee consists of four independent non-executive directors, elected by Remgro’s shareholders on recommendation by the Board, and is chaired by Ms S E N De Bruyn Sebotsa. The committee meets at least four times a year and the CEO, CFO and the head of internal audit attend all meetings, ex officio. The composition of and attendance at committee meetings are set out here.

The main role of the committee is to assist the Board in discharging its responsibilities regarding the following:

• risk management;
• internal controls;
• internal financial controls, accounting systems and information;
• the effectiveness of the CFO and financial function;
• accounting policies;
• internal and external audit;
• information technology systems;
• protection of assets;
• public reporting; and
• to monitor compliance with laws, rules, codes of conduct and standards.

The annual appointment of the external auditor, the approval of its terms of engagement and audit approach, as well as the approval of fees relating to audit services and non-audit services are also performed by the committee. These responsibilities apply to Remgro and its subsidiaries administered by RMS.

The Audit and Risk Committee meets at least once per year with the external and internal auditors and executive manage­ment to ensure that their efforts relating to risk management and internal control are properly coordinated.

The committee furthermore evaluates the effectiveness of its subcommittee, the Risk and IT Governance Committee. This committee’s mandate includes the maintenance of the Risk Management Policy and plan, establishment and maintenance of an operational risk register, information technology risk management, legal compliance and occupational health and safety. A Financial Statements Committee, which is not an official subcommittee of the Audit and Risk Committee, was also established. Its tasks include the revision of Remgro’s Integrated Annual Report (including the annual financial statements) prior to submission thereof to the Audit and Risk Committee. Both of these committees are chaired by Remgro’s CFO and the chairman of the Audit and Risk Committee attends the meetings by invitation.

The committee is also responsible for ensuring that the combined assurance model introduced by King III is applied to provide a coordinated approach to all assurance activities. In particular the committee:

• will ensure that the combined assurance received is appropriate to address all the significant risks facing the Company; and
• monitors the relationship between the external service providers and the Company.

Investment Committee

The Investment Committee comprises four non-executive directors, of whom two are independent, as well as the CEO and the CFO. The committee is chaired by Mr Johann Rupert and meets when required for significant investment decisions. The composition of the committee is set out here.

The duties and responsibilities of the committee are:

• to consider and, if appropriate, approve:
  • new investments up to an amount of not more than R500 million;
  • the extension of existing investments for amounts between R100 million and R500 million;
  • the disposal of existing investments for amounts between R100 million and R500 million; and
• to consider and make recommendations to the Board regarding investment decisions amounting to more than R500 million.

During the year under review all decisions taken by the Investment Committee were approved by written resolution.

Management Board

The Management Board consists of all four executive directors as well as two members of senior management, Messrs Pieter Louw and Pieter Uys. The committee meets on a monthly basis and the duties and responsibilities of committee members are in addition to their duties and responsibilities as members of the Board (in the case of members who are directors) and/or their other duties as executives. The composition of and attendance at committee meetings are set out here.

The key duties and responsibilities of the committee are as follows:

• development of operational and investment plans and strategies for Remgro for submission to the Board and the implementation thereof once approved;
• evaluating and monitoring of existing Group investments;
• extension of existing investments up to an amount of not more than R100 million;
• the disposal of existing investments with a carrying value not exceeding R100 million;
• recommendation of all new investments, the extension of existing investments for more than R100 million and the disposal of existing investments for more than R100 million to the Investment Committee and the Board for approval;
• appropriate reporting in respect of existing investments to the Board; and
• nomination of representatives of Remgro as directors on the boards of investee companies, for approval by the Board.

Social and Ethics Committee

The committee’s responsibilities are governed by a formal mandate as approved by the Board and the main objectives of the committee are to:

• assist the Board in monitoring the Group’s performance as a good and responsible corporate citizen by the monitoring of its sustainable development practices; and
• perform the statutory duties of a Social and Ethics Committee in terms of the Companies Act and other functions assigned to it by the Board.

The composition of and attendance at committee meetings are set out here.

Dealing in securities

In accordance with the Listings Requirements of the JSE, the Company has adopted a code of conduct for insider trading. During price-sensitive or closed periods directors and designated employees are prohibited from dealing in Remgro’s securities. In terms of the Group’s policy closed periods lasts from the end of a financial reporting period until the publication of financial results for that period. A closed period is also applicable when the Company has issued a cautionary announcement to its shareholders.

Directors and designated employees may only deal in Remgro’s securities outside the closed period, with the approval of the Chairman or the CEO. In addition, directors and designated employees are prohibited from dealing in the securities of listed investee companies unless permission has been obtained from the Chairman or the CEO.

Conflicts of interests

Mechanisms are in place to recognise, respond to and manage any actual, potential or perceived conflicts of interest. Directors are required to disclose their personal financial interests, and those of persons related to them, in contracts or other matters in which Remgro has a material interest or which are to be considered at a Board meeting. Where a potential conflict of interest exists, directors are expected to recuse themselves from relevant discussions and decisions.

All information acquired by directors in the performance of their duties, which is not disclosed publicly, is treated as confidential. Directors may not use, or appear to use, such information for personal advantage or for the advantage of third parties.

All directors of the Company are required to comply with the Remgro Code of Ethics, the provisions of the Financial Markets Act, 2012 and the requirements of the JSE Limited regarding inside information, dealings in securities and the disclosure of such dealings.

The activities and conduct of executive directors and senior management who act in a non-executive capacity on the boards of investee companies are governed by formal guidelines as approved by the Board.