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Nomination committee report

The Nomination Committee (the committee) presents the following report for the 2018 financial year.

Committee governance

Composition

The members of the committee for the 2018 financial year were independent non-executive directors, Mike Hankinson (Chairman), Harish Mehta and Phumla Mnganga. Their qualifications and experience are available here.

Meetings

The CEO attends meetings by standing invitation to make proposals and provide such information as the committee may require.

The committee met six times during the 2018 financial year. Members’ attendance at meetings was as follows:

Attendance
Member Status 14 Nov 2017 6 Feb 2018 7 Aug 2018 7 Sep 2018 8 Oct 2018 1 Nov 2018
Mike Hankinson (Chairman) Independent non-executive
Harish Mehta Independent non-executive
Phumla Mnganga Independent non-executive

Members’ attendance was 100%.

Terms of reference

The committee executes its responsibilities in accordance with a formal terms of reference, which is reviewed annually and is aligned with the King IV™ recommendations. No changes were made to the terms of reference since its last review in 2017.

The committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference. A copy of the committee’s terms of reference and work plan can be found here.

Role and responsibilities

The board has allocated the oversight of the process for nominating and electing members of the board, succession planning in respect of board members and the evaluation of the performance of the board, its committees and individual members to the committee. 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 on appointments – 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 members; and
  • the evaluation of independence process.

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

The effectiveness of the committee is assessed by way of self-evaluation review every two years and will be performed again in 2019.

Key focus areas

In addition to the key focus areas detailed below, the committee received feedback on the following matters during the 2018 financial year:

  • the succession of non-executive directors, executive directors and executive management; and
  • King IV™ and its recommendations.

Board and committee composition

A board appointment policy is in place, was amended in line with King IV™ and approved by the board on 14 November 2017. The policy sets out the formal, rigorous and transparent procedure for the appointment of new members to the board and its committees. In addition, the role and responsibilities of the Chairman, the induction of new directors and the appointment letter for new non-executive directors were aligned with King IV™ and approved by the board on 14 November 2017.

The committee proposed changes to the Risk Committee and Social and Ethics Committee members, in line with King IV™, to only comprise executive and non-executive directors (as the case may be).

Diversity

The committee amended the company’s gender diversity policy to include a policy on race diversity and renamed it the board diversity policy. The voluntary targets in terms of this policy are a minimum of three black people (as defined by the Black Economic Empowerment Act of 2003) and two females. At the date of this report, the board comprised four black people, two of whom are female. The amended policy was approved by the board on 7 August 2018.

A copy of the board diversity policy is available here.

The board believes in gender diversity on boards and joined the 30% Club Southern Africa in September 2018. The 30% Club is an international campaign launched in the United Kingdom in 2010 and extended to South Africa in 2013. Its aim is to develop a diverse pool of talent for all businesses through the efforts of respective Chairman and CEO members and runs a number of very specific and targeted initiatives that look to broaden the pipeline of women at all levels, from “schoolroom to boardroom”.

Rotation of non-executive directors

Mike Hankinson, Phinda Madi and Marang Mashologu retire in accordance with the company’s MOI. Being eligible, Mike Hankinson and Marang Mashologu offer themselves for re-election. Phinda Madi has informed the board that he would not offer himself for re-election and will accordingly retire as a director of the company at the 2019 annual general meeting (AGM).

In terms of the company’s board appointment policy, the mandatory age limit for non-executive directors is 70 years and, accordingly, Mike Hankinson will be turning 70 in the 2019 financial year and will retire before the 2020 AGM.

The independence and performance of Mike Hankinson and Marang Mashologu were assessed and, based on the results of the assessment which was accepted by the board, the board recommends to shareholders that Marang Mashologu and Mike Hankinson be re-elected as independent non-executive directors of the board. The independence assessment 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

The board agreed that the internally facilitated independence assessments would be conducted annually by the committee for each non-executive director who has served on the board beyond nine years, and that an externally facilitated, independent assessment would be conducted every three years.

An internally facilitated independence assessment of Phumla Mnganga, Mike Hankinson, Harish Mehta and Phinda Madi was undertaken during the 2018 financial year and there was nothing to indicate that the named directors were not independent, despite their tenure on the company’s board.

The last externally facilitated independence assessment was conducted in 2017 and will again be conducted in 2020.

Succession planning

The average age of the board is 58, therefore succession planning was a key focus area for the board during the 2018 financial year and will continue to be a focus area into the 2019 financial year to ensure that key skills are retained following the retirement of the said directors. The board seeks to balance fresh perspectives from newer directors with the experience and knowledge of those directors with longer tenures. The average tenure of the board is 11 years.

Performance evaluations

The board agreed that the performance evaluation process will not be externally facilitated and that internal evaluation questionnaires will be completed biannually 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; and
  • the effectiveness and contributions of each of the directors.

The last evaluation in respect of the above areas was conducted in 2017 and, accordingly, the next performance evaluation process will be undertaken in 2019.

The committee assessed the performance of the CEO against agreed performance measures and targets and was satisfied with his performance.

Thank you to the members of the committee for their dedicated and constructive contributions to the functioning of the committee.

Mike Hankinson
Chairman of the Nomination Committee
13 November 2018