Implats is committed to the implementation of sound corporate governance across the organisation. The Company understands that this approach to business is fundamental to the sustainability of the Company’s success and is critical to earning the trust of all our stakeholders.
Implats has, in the year under review, complied with the requirements of the King Report on Corporate Governance (King II) and completed a gap analysis on its compliance with King III, which will be more fully reported on in the next financial year.
King III places additional responsibilities on the Board, management and stakeholders of Implats as well as expanding the extent of disclosures in the annual report, which ensures greater emphasis on transparency. Standards of disclosure have increased significantly and internal governance structures and roles have been reviewed and improved where necessary to reflect best practices. This has occurred at both board and management levels. The Board is satisfied that the Group’s governance structures will accommodate all the recommendations and that the Group is in a good position to absorb the additional responsibilities placed on it by King III.
Board of directors
The Board comprised of nine directors at 30 June 2010. There were four independent non-executive directors, one non-executive and four executive directors on the Board.
Dr K Mokhele, an independent non-executive director, is chairman of the Board. Mr DH Brown, an executive director, is the chief executive officer. The roles of the chairman and CEO are distinctly separate.
In keeping with JSE Listing Requirements, independent non-executive directors do not participate in any share incentive or option scheme of the Company.
Mr TV Mokgatlha and his alternate director, Mr N Carroll, are nominees of the Royal Bafokeng Nation, a substantial shareholder of the Company and are not considered independent. During the year, Mr DS Phiri resigned from the Board and subsequent to year end the Royal Bafokeng Nation nominated Mr M Pooe as its representative on the Board, with effect from 18 August 2010.
During the year, Dr FJP Roux resigned as chairman of the Board and as a director. In addition Ms F Jakoet, an independent non-executive director, also resigned from the Board. As reported in the previous annual report, Mr S Bessit did not avail himself for re-election at the last annual general meeting. The Nominations Committee remains focused on the process of appointing new non-executive directors to the Board in line with a strategy adopted by the Board in February 2010. There is a clear policy in place detailing procedures for appointments to the Board. Such appointments are formal and a matter for the Board as a whole, assisted by the Nominations Committee. When appointing directors, the Board takes cognisance of its needs in terms of different skills, experience, diversity, size and demographics. Mr PA Dunne, an executive, was appointed to the Board in February 2010.
Subsequent to year end, the following additional independent non-executive directors were appointed to the Board:
 |
|
| Mr T Goodlace |
with effect from 5 August 2010 |
| Mr H Cameron |
with effect from 1 November 2010 |
| Dr M Gantsho |
with effect from 1 November 2010 |
| Ms B Ngonyama |
with effect from 1 November 2010 |
The Board comprises 56% HDSAs and 33% female members. Details of all Board members appear on page 44.
In terms of the Company’s articles of association Board members are appointed for a three-year term of office. Re-election of board members takes place on a staggered basis to ensure continuity. Executive directors retire at the annual general meeting following their 63rd birthday, and non-executive directors following their 67th birthday, provided that, in the case of non-executive directors, their term of office continues on an annual basis if a majority of their co-directors so request. This was the case with Ms MV Mennell, who has been asked by the Board to remain a director until October 2011. The names of the retiring directors and curricula vitae appear on page 141.
The role of the Board is regulated in a formal board charter which defines matters reserved for board approval. The charter will be reviewed and updated to ensure compliance with King III and the new Companies Act 2008. The board charter is available on the Company’s website www.implats.co.za. In addition to the board charter, a formal delegation of authority is in place which defines the powers and authority of management.
In addition to four quarterly board meetings, two full-day sessions are held annually, firstly for board members and senior executives to discuss strategy, and secondly for board training. The attendance of executive management at the strategy session is in line with the non-executive directors’ recognition of the need for their independence, while further understanding the importance of good communication and close cooperation with executive management.
An annual board meeting is also held to discuss the business plan of the Group.
The Board also meets on an ad hoc basis to consider specific issues if the need arises. The progress and status of identified strategic issues are reported and monitored at quarterly board meetings.
The Board functions are supported by the following committees of the Board:
- Audit and Risk Committee
- Remuneration Committee
- Nominations Committee
- Safety, Health and Environmental Quality Audit Committee
- Transformation Committee
Board committees operate in terms of mandates reviewed and approved by the Board. A mandate sets out the role, responsibilities, scope of authority, composition and procedures for reporting to the Board to be followed by a board committee. All board committee mandates have been reviewed to take into account amendments to relevant legislation. These mandates will be amended again in November 2010 to take into account the requirements of King III and the new companies Act 2008, where applicable.
The chairmen of all board Committees are encouraged to attend the annual general meeting to answer any questions from shareholders. The chairmen of the Audit and Risk Committee and the SHEQ Committee are required to attend the annual general meeting.
All committees report back regularly to the Board at quarterly board meetings. Reports from the chairmen of the committees are tabled at board meetings.
The composition of board committees was amended, during the year and a change in chairmanship effected. The composition of these Committees and their terms of reference are given under their respective headings below.
Attendance at board and committee meetings and the annual general meeting is set out in the table below:
Attendance at Board, committee meetings and annual general meeting
| |
Board |
Audit
Committee |
Remun-
eration
Committee |
SHEQ
Committee |
Nomin-
ations
Committee |
Trans-
formation
Committee |
Annual
general
meeting |
|
|
|
|
|
|
|
|
| Number of meetings |
7 |
4 |
4 |
4 |
4 |
4 |
1 |
| FJP Roux1 |
2/2 |
— |
— |
1/1 |
1/1 |
1/1 |
✓ |
| S Bessit1 |
2/2 |
— |
— |
— |
— |
1/1 |
✓ |
| DH Brown* |
7/7 |
— |
— |
4/4 |
— |
4/4 |
✓ |
| PA Dunne |
2/2 |
— |
— |
— |
— |
2/2 |
— |
| D Earp1 |
7/7 |
— |
— |
— |
— |
4/4 |
✓ |
| F Jakoet1 |
5/6 |
3/4 |
— |
— |
— |
— |
✓ |
| JM McMahon |
7/7 |
4/4 |
4/4 |
4/4 |
— |
— |
✓ |
| MV Mennell |
7/7 |
4/4 |
— |
— |
4/4 |
— |
✓ |
| TV Mokgatlha |
7/7 |
— |
— |
— |
— |
3/4 |
✓ |
| K Mokhele |
7/7 |
— |
— |
4/4 |
4/4 |
4/4 |
✓ |
| NDB Orleyn |
7/7 |
— |
4/4 |
— |
4/4 |
4/4 |
✓ |
| LJ Paton |
7/7 |
— |
— |
— |
— |
3/4 |
✓ |
| DS Phiri1 |
4/4 |
— |
3/3 |
— |
— |
— |
✓ |
|
1 Resigned during year under review.
* CEO.
† CFO.
Following Dr FJP Roux’s resignation as chairman ofthe Board at the Implats annual general meeting on 22 October 2009, Mr JM McMahon, an independent non-executive director and chairman of the Audit Committee, agreed to become acting chairman of the Board and chairman of the annual general meeting. King II, King III and the JSE Listings Requirements require that the chairman of the Board should not be a member of the Audit Committee. Mr McMahon remained acting chairman of the Board until Dr K Mokhele’s appointment as chairman on 11 November 2009. During this period the Audit Committee met on 9 November 2009. This sequence of events was extraordinary and occurred only as a result of the unanticipated resignation of the chairman and the need for business continuity.
Directors’ interests in contracts in terms of Section 234 of the Companies Act are disclosed at every meeting.
Board committees
Remuneration Committee
Members
Thandi Orleyn (Chairman)
Michael McMahon
Thabo Mokgatlha
The Remuneration Committee comprises two independent non-executive directors and one non-executive director.
Ms NDB Orleyn was appointed as the chairman of the Committee in February 2010 in place of Mr DS Phiri.
Mr TV Mokgatlha was appointed a member in May 2010. The chairman of the Board, chief executive officer and the human resources executive are invited to attend all Remuneration Committee meetings except when their own remuneration is under consideration.
The Company’s remuneration policy is determined by this Committee and strives for competitive and fair compensation in recognising and rewarding individual and team achievements that contribute to attracting, retaining and motivating employees, organisational growth and prosperity.
The main functions of the Remuneration Committee are to:
- Determine fixed and variable remuneration for executive directors and senior executives
- Ensure the implementation of policies and practices to attract and retain the best talent at executive level
- Ensure the provision of fair, equitable and competitive conditions of employment across the Group
- Ensure the effectiveness of a comprehensive talent management process, encompassing employee development and succession planning
- Benchmark remuneration practices against both local and international best practice
- Monitor retirement benefits
- Recommend fees for non-executive directors to the Board for approval by shareholders at the annual general meeting
Nominations Committee
Members
Khotso Mokhele (Chairman)
Vivienne Mennell
Thandi Orleyn
The Committee comprises three independent non-executive directors. During the year, Dr FJP Roux resigned as a member of the Committee. The Committee assists the Board in ensuring that the structure, size, effectiveness and composition of the Board and its committees:
- Are reviewed regularly
- Comprise the requisite mix of skills, experience, diversity and other qualities
- Are aligned with the strategic direction and requirements of Implats
- Meet the requirements of sound corporate governance
The Nominations Committee is responsible for ensuring that the Board, its directors and its committees are assessed regularly; proposing adjustments to the Board and its committees, as appropriate; planning for the succession of directors; recommending appointments and re-elections of directors; establishing a formal induction process and ensuring that a training and development programme is in place for Board members.
An assessment of the board committees, the board chairman and the chairmen of the board committees took place during the year. An individual evaluation of board members standing for re-election was also undertaken. Corrective action will be taken by the Nominations Committee to address issues identified. The re-election of retiring directors was endorsed by their fellow directors unanimously.
|
