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Board committees
The board has six Group sub-committees that assist in discharging its responsibilities. These Group committees, listed below, play an important role in enhancing good corporate governance, monitoring and reporting on internal control environments in order to give assurance to the positive performance of the Company:
Each board committee acts according to the annually reviewed and board-approved terms of reference. Copies of the terms of reference, including the board charter, are available at:
Board committees may take independent professional advice at the Company’s expense. The committees are subject to annual evaluation by the board on performance and effectiveness. Chairmen of the board committees are required to attend annual general meetings to answer questions raised by shareholders. Board and sub-committee composition and attendanceThe names of the directors who were in office during the period August 27 2011 to August 24 2012 and the details of board meetings, as well as sub-committee membership and attendance is detailed in the directors’ report. 1. Remuneration committeeOur remuneration philosophy promotes the Group’s entrepreneurial culture within a decentralised environment with the aim of achieving sustainable growth within all businesses. Our philosophy emphasises the fundamental value of our people and their role in attaining this objective. Delivery-specific short-term incentives are viewed as strong drivers of performance. The committee comprises three independent non-executive directors, Messrs DDB Band (chairman), D Masson and JL Pamensky. The chief executive officer, chief financial officer and other members of senior management may be invited to attend meetings, but may not participate in the vote process of the remuneration committee and recuse themselves from any discussion regarding their performance or remuneration.
The committee utilises the services of PricewaterhouseCoopers (PWC) as independent advisers on an ad hoc basis. During the year PWC supplied market data and advice on market practice and governance and provided performance analyses on certain conditional share plan performance measures. The remuneration disclosure is included as part of the directors’ report. Refer full remuneration policy on the website.
2. Nominations committeeThe role of the committee is to ensure that the board has the appropriate composition to execute its duties effectively. To ensure a rigorous and transparent procedure, any new appointment of a director is considered by the board as a whole, on the recommendation of the nominations committee. The selection process involves considering the existing balance of skills and experience, the balance of executive to non-executive and independent to non-independent directors, racial and gender demographics and the current needs of the organisation as a whole. For those new appointments, this committee ensures that an induction process is conducted and ongoing training and development of the directors is conducted. The nominations committee also ensures a formal succession plan is developed for the board, chief executive officer and senior management appointments. The committee comprises three independent non-executive directors, Messrs DDB Band (chairman), JL Pamensky, MC Ramaphosa, Ms T Slabbert and the chief executive officer, Mr B Joffe.
In terms of the Company’s memorandum of incorporation the directors who retire by rotation at the forthcoming annual general meeting are Messrs FJ Barnes, LI Jacobs, D Masson, JL Pamensky, MC Ramaphosa, AC Salomon and Ms T Slabbert. 3. Acquisitions committeeThe primary purpose of the acquisition committee is to review any significant acquisition for an in-principle decision as to whether the acquisition should be investigated and pursued; as well as to recommend to the board planned acquisitions that have been approved to be in the best interests of the shareholders and to the future growth of the group, or to inform the board of acquisitions that they do not recommend be considered. The committee is appointed by the board and is made up of the following members Messrs DDB Band (chairman), BL Berson, DE Cleasby, B Joffe, D Masson, JL Pamensky and LP Ralphs, in line with the charter requirements. No formal meetings were held during the period August 27 2011 to August 24 2012; members were however consulted on a number of transactions.
4. Audit committeeThe audit committee charter defines the responsibilities of this committee, including but not limited to review of the financial information, assessment of significant statutory and financial risks, scope and function of internal audit, review of internal and external audit reports and the appointment of external auditors. Group audit committee members are appointed by the board, comprising a minimum of three members and chaired by an independent non-executive director. In terms of the requirements of the Companies Act, the committee reports directly to shareholders. The committee comprises Messrs NG Payne (chairman), D Masson and JL Pamensky all of whom are independent non-executive directors. Two newly nominated independent non-executive directors being Messrs PC Baloyi and EK Diack have been nominated for appointment to the committee. The chairman of the Company is not a member of the committee. The chairman of the committee reports to the board on the activities and recommendations made by the committee. The financial director, head of internal audit and the external audit partner attend all meetings.
Deloitte & Touche are the Group’s lead auditors and Bidvest South Africa divisional auditors, with KPMG auditing the Bidvest Foodservice division. The committee has confirmed the continuing independence and objectivity of the external auditors. The committee reviewed the combined assurance model which is being developed to ensure that all significant risks identified are adequately addressed by management as well as internal and external assurance providers. The directors believe that the committee has satisfied its responsibilities under its mandate. Under the sponsorship of the committee’s chairman, a self-evaluation assessment was undertaken during the year and action to address certain issues requiring attention determined. Based on a review and evaluation of the nature and extent of the documented review of internal financial controls performed by internal audit and the reports prepared by the internal auditors, external auditors, management and other assurance providers, the committee confirms to the board and stakeholders on the effectiveness of the Company’s internal financial controls in the current financial year. The annual audit committee report disclosure has been included in the report, please refer (here).
Internal auditThe purpose, authority and responsibility of the internal audit function are defined in a board-approved charter that is consistent with the Institute of Internal Auditors’ definition of internal auditing, and the principles of King III. A risk-based internal audit methodology has been applied, with input from divisional management and aligned to the organisation’s risk management processes. The three-year rolling internal audit and combined assurance plans are presented to the audit committee for approval. The audit committee considers the objectives and rationale that drives the plan in order to achieve the objectives of internal audit processes. Internal audit plans are reviewed quarterly assessing the ability of the plan to meet the objectives of the audit committee. Internal audit continued to function independently and objectively throughout the Group in the past year. The internal audit manager within each division, as well as at Group level, reports functionally to the chairman of the respective audit committee. Unrestricted access to members of the audit committee and executives of the organisation is available to the internal audit function. In addition, regular separate meetings took place between internal audit and the chairman of the divisional and Group audit committees during the year under review. Although not reliant on external auditors for any resource support, the internal audit function, in accordance with the Group’s combined assurance model, continues to liaise with the external auditors, and other assurance providers identified, to maximise efficiencies in assurance coverage on key risks.
The effectiveness of the Company’s system of internal controls and risk management, as well as the adequacy and availability of skills to address identified risks is assessed by the divisional audit committees and is reported up to the Group audit committee for approval and acceptance. Based on the work carried out by internal audit during the year under review, controls evaluated were assessed as adequate and effective to provide a reasonable level of assurance that risks are being managed and that Group objectives should be met. 5. Risk committeeThe committee assists the board in recognising all material risks to which the Group is exposed and ensuring that the requisite risk management culture, policies and systems are progressively implemented and functioning effectively. Management is accountable to the board for implementing and monitoring the processes of risk management and integrating this into day-to-day activities. Divisionally risk committees and risk registers are established and these are communicated to a Group risk level. The committee comprises seven directors namely Messrs NG Payne (chairman: an independent non-executive director), D Masson (independent non-executive director) and Ms T Slabbert (non-executive director), and Messrs BL Berson, DE Cleasby, B Joffe and LP Ralphs (executive directors).
An ongoing enterprise-wide risk assessment process supports the Group philosophy. This ensures risks and opportunities are adequately identified, evaluated and managed at the appropriate level in each division, and that their individual and joint impact on the Group is considered. The internal auditors assist in evaluating the effectiveness of the risk management process and comment on this in their own assessment reports.
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