Corporate governance
General
The Board affirms a commitment to the principles of openness, accountability and integrity and to the provision of timeous, relevant and meaningful reporting to all its stakeholders. It will ensure that the business of Italtile and its subsidiaries is conducted with integrity and in accordance with the highest standards of corporate governance.
The Board endorses the Code of Corporate Practices and Conduct as set out in the Second King Report on Corporate Governance for South Africa 2002 (“King II” or “King Code”). The principles contained therein are reviewed from time to time to take into account appropriate changes and developments in the field of corporate governance, both locally and internationally. The Company is in substantial compliance with King II. Areas in which the Company does not comply are indicated below. The draft of the King III guidelines is also being closely monitored to ensure that the Group will comply by the time of its implementation in March 2010.
Board of directors
The Board comprises three executive directors and five non-executive directors.
The Board is responsible to shareholders for the conduct of the business of the Italtile Group, which includes providing Italtile with clear strategic direction. The schedule of matters reviewed by the Board includes:- approval of the Group’s strategy and annual budget;
- overseeing Group operational performance and management; ensuring that there is adequate succession planning at senior levels;
- overseeing director selection, orientation and evaluation;
- approval of major capital expenditure or disposals, material contracts, material acquisitions and developments;
- reviewing the terms of reference of Board committees;
- determining policies and processes which seek to ensure the integrity of the Group’s risk management and internal controls;
- maintaining and monitoring of the Group’s systems of internal control and risk management;
- communication with shareholders, including approval of all circulars, prospectuses and major public announcements;
- approval of the interim statement and annual report and accounts (including the review of critical accounting policies and accounting judgements and an assessment of the Company’s position and prospects); and
- recommendation of dividends.
The Board retains full and effective control over the business of Italtile.
The Board has defined levels of materiality through a written delegation
of authority, which sets out decisions the Board wishes to reserve
for itself. The delegation is regularly reviewed and monitored. Division
of responsibilities maintains a balance of power and authority.
The three executive directors have fixed terms of employment. In accordance with the Company’s Articles of Association, all directors are subject to retirement by rotation and re-election by shareholders at least every three years. If requested to serve a further term, those retiring directors may offer themselves for re-election by shareholders. Any director appointed during the year must retire at the annual general meeting held immediately after his or her appointment.
Operation of the Board of directors
The Board meets at least every quarter or more frequently if circumstances so require. Information relevant to a meeting is supplied on a timely basis to the Board ensuring directors can make informed decisions.
The directors have unrestricted access to information, management and the Company Secretary in relation to Italtile. All directors are entitled to seek the advice of independent professionals on matters concerning the affairs of the Group, at Italtile’s expense.
Details of attendance at Board meetings are set out below:
Board meetings| 1 August 2008 |
26 November 2008 |
31 January 2009 |
21 May 2009 |
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| G A M Ravazzotti | √ | √ | √ | √ |
| P D Swatton | √ | √ | √ | √ |
| S M du Toit* | N/A | N/A | N/A | √ |
| D H Rabin | √ | √ | √ | √ |
| G Zannoni | √ | √ | √ | √ |
| G K A Morolo | √ | √ | √ | √ |
| S I Gama | √ | √ | — | √ |
| G P E Ravazzotti | √ | √ | √ | √ |
| *Appointed 6 March 2009. |
Areas of non-compliance
Representation on the Board and Board committees does not represent a majority of independent non-executive directors. The Board is satisfied that these areas of noncompliance with the King Code do not impair governance integrity or perceptions of it. Furthermore, the Board is committed to appoint additional independent nonexecutive directors to the Board as a matter of priority.
Appointment to the Board
The Board as a whole is responsible for reviewing the composition of the Board and identifies and considers the appointment of new directors. Appointments to the Board are made taking into account the need for ensuring that the Board provides a diverse range of skills, knowledge and expertise, the necessity of achieving balance between skills and expertise and the professional and industry knowledge necessary to meet the Company’s strategic objectives, as well as the need for ensuring demographic representation. Upon appointment, each director receives an induction programme into the Group with guidance on their responsibilities.
