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Nomination committee report

The Nomination Committee (the committee) is pleased to present its report for the 12 months ended 30 September 2017.

The board has allocated the oversight of the process for nominating, electing and appointing members of the board, succession planning in respect of board members and the evaluation of the performance of the board, its committee and individual members to the committee.

COMMITTEE GOVERNANCE

Composition and meetings

Members of the committee and its Chairman are appointed by the board. The committee comprises Messrs Hankinson (Chairman) and Mehta and Mrs Mnganga, all of whom are independent non-executive directors. Their qualifications and experience are available here.

The committee meets formally three times a year. The CEO attends meetings by standing invitation to make proposals and to provide such information as the committee may require. Members’ attendance at meetings was as follows:

Terms of reference

The committee operates in accordance with formal terms of reference and a work plan, which was reviewed and amended in line with the King IVTM recommendations and approved by the board on 2 August 2017.

A copy of the committee’s terms of reference and work plan is available here.

Role and responsibilities

The committee oversees:

  • the composition of the board and its committees, by setting criteria for board positions, identifying candidates and making recommendations to the board of directors on appointments, and in doing so taking into consideration the board’s structure, size, diversity, demographics and balance between executive and non-executive directors;
  • succession planning for the Chairman, board members and the CEO, which includes the identification, mentorship and development of future candidates;
  • the induction of new directors and the ongoing training and professional development of board members, as and when required;
  • the effectiveness and ultimately the performance of the board, its committees and individual directors; and
  • the evaluation of independence criteria.

Details of the committee’s duties are in its terms of reference.

In addition to the key activities, the committee received feedback on the following matters:

  • the group’s succession plan and organogram;
  • the training and development of board members; and
  • King IVTM and its recommendations.

Key Activities

BOARD AND COMMITTEE COMPOSITION

A board appointment policy is in place, which sets out the formal, rigorous and transparent procedure for the appointment of new members to the board and its committees.

The committee established a gender diversity policy to ensure gender diversity at board level. The voluntary target is two females. The policy was approved by the board on 15 November 2016 and at the date of this report, women made up 20% of the board.

A copy of the gender diversity policy is available here.

New appointment

In light of the mandatory retirement of two independent non-executive directors in 2019 and one in 2020, the committee proposed to the board that the number of independent non-executive directors be increased from six to seven and to appoint Mr AG Waller to the board, effective 7 February 2018, subject to his election by shareholders at the 2018 annual general meeting. The committee together with the board assessed the suitability of Mr Waller and believe that his knowledge and experience will add value to the board.

Mr Waller is a chartered accountant and was previously a partner at Deloitte & Touche, during which time he was responsible for the audits of a number of JSE listed companies. He is currently the financial director of Grindrod Limited and non-executive director of Senwes Limited.

Rotation of non-executive directors

Mrs P Mnganga and Mr CF Wells retire in accordance with the company’s Memorandum of Incorporation and, being eligible, offer themselves for re-election. The independence and performance of Mrs P Mnganga and Mr CF Wells was assessed, and based on the results of the assessment, which was accepted by the board, the board recommends to shareholders that Mrs P Mnganga and Mr CF Wells be re-elected.

The independence of non-executive directors who retire by rotation is based on whether the director has no 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 in the best interest of the company.

ASSESSMENT OF THE INDEPENDENCE OF DIRECTORS WHO HAVE SERVED ON THE BOARD FOR MORE THAN NINE YEARS

An externally facilitated independence assessment of Messrs Hankinson, Madi and Mehta, who have served on the board for 13 years, and Mrs Mnganga, who has served on the board for 11 years, was undertaken during the year under review and, based on the completed questionnaires and the interviews conducted with each of the directors and having regard to the King IVTM recommendations on independence, there was nothing to indicate that the named directors were not independent, despite their tenure on the company’s board.

PERFORMANCE EVALUATIONS

Internal formal evaluations of the board’s performance and its committees, its Chairman and its individual members were undertaken during the period under review in respect of the following areas:

  • the effectiveness of the board’s composition, governance processes and procedures;
  • the effectiveness of the board’s committees in discharging their respective mandates;
  • the effectiveness of the executive directors;
  • the effectiveness and contributions of each of the directors;
  • the effectiveness of the Chairman of the board; and
  • the effectiveness and capacity of the Company Secretary.

Evaluation questionnaires have been designed to give insight into how each director of the board believes the board and its committees, the Chairman and individual directors are performing and meeting its/their objectives. It is not intended to provide an exhaustive list of evaluation criteria, but rather to provide guidelines for evaluating the board’s effectiveness and to focus on areas where the board’s performance may possibly be enhanced or improved.

A synopsis of the respective evaluations was presented to the board by the committee with no remedial actions required. The board was satisfied with the evaluation process undertaken during the 2017 financial year and believes that the process impacts positively on the board and its committees’ performance, as well as its Chairman and individual directors.

The board has agreed that the evaluation process will not be externally facilitated and that internal evaluation questionnaires will be completed every second year in respect of the abovementioned areas, apart from the CEO and Company Secretary, who are required to be evaluated annually. Accordingly, the next evaluation process will be undertaken in August 2019, however, independence assessments will be done annually.

The committee also undertook an evaluation of itself and strongly believes that:

  • it is appropriately constituted with clearly defined terms of reference and appropriate reporting lines to the board;
  • the frequency and duration of committee meetings are appropriate to enable members to discharge their mandate;
  • it has a mix of the required skills to address a range of issues and risks pertaining to the committee.
  • the members have a clear understanding of their responsibilities and authority;
  • it provides clear and specific guidance to the board as mandated, and assists the board in its overall responsibility to ensure the proper governance of the company;
  • members are well prepared for their meetings; and
  • the Chairman of the committee is effective.

KEY ACTIVITIES FOR 2018

For the 2018 financial year, the committee plans to review the following policies and guidelines to ensure their alignment with King IVTM:

  • the board appointment policy;
  • the role and responsibilities of the Chairman;
  • the directors’ induction programme; and
  • the powers and duties of directors, including the CEO.

In addition, in terms of the JSE Listings Requirements, the company is required to disclose its policy on the promotion of race diversity at board level, with effect from 1 June 2018. The promotion of race diversity will be incorporated into the gender diversity policy and disclosed in the 2018 integrated report.

The committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference during the reporting period under review.

Thanks go to the members of the committee for their dedicated and constructive contributions to the functioning of the committee.

MJ Hankinson
Chairman
14 November 2017