PRINCIPLES AND IMPLEMENTATION OF CORPORATE GOVERNANCE
The directors of TMG are committed to effective corporate governance and
the need for high ethical standards in conducting the Group’s business. TMG has substantially applied the principles
set out in the King Report on Governance for South Africa 2009 (King III) since
its listing on the JSE in September 2012. For the year under review, the exceptions were
that the chairman of the board was also the chairman of the audit and risk
committee, and that the nominations committee did not have a majority of
independent members. The nominations
committee is addressing these issues. TMG’s
King III application register is available on the TMG website. The directors acknowledge that they are
responsible for TMG’s affairs. This responsibility
includes a strong focus on compliance with the qualitative aspects of corporate
governance to ensure implementation matches the needs of the business.
BOARD OF DIRECTORS
TMG has a unitary board. At year end,
there were four independent non-executive directors, two non-executive
directors and two executive directors. There
are five black directors. Non-executive
directors provide judgement on issues of strategy, performance, resources and
standards of conduct based on their range of skills and commercial expertise. Executive directors propose strategies and implement
operational decisions, and execute specific roles and functions in their areas
of expertise. Appointments to the board
are made in a formal and transparent manner, with the assistance of the
nominations committee. Changes in the
directorate are detailed on pages ·· and ·· of this integrated annual report.
There is a clear division of responsibilities at board level, captured
in a policy that provides evidence of the balance of power between the independent
non-executive chairman, chief executive officer and non-executive directors. The roles of chairman and chief executive
officer are separate. The chairman provides
overall leadership to the board without limiting the principles of collective
responsibility for board decisions. The
chairman has no executive functions. The
chief executive officer is responsible for developing and recommending to the
board a strategy and vision for the Group, as well as an annual business plan
and budget to support the strategy. The
board rigorously interrogates the strategy and provides input. The chief executive officer exercises final
executive authority to run the Company efficiently on a day-to-day basis, and
is the leading interface between the board and executive management.
The board believes its members have the expertise and experience to
fulfil their obligations to the Company and all its stakeholders.
No board member has served as a director for more than nine years.
The board has a defined charter in line with King III which sets out its
roles and responsibilities, namely, to:
·
Provide effective
leadership based on an ethical foundation
·
Ensure that the Company
is, and is seen to be, a responsible corporate citizen, not only in the
financial aspects of its business, but also the impact operations have on the
environment and the society in which it operates
·
Exercise leadership
and ensure that all deliberations, decisions and actions are based on the four
values underpinning good governance - responsibility, accountability, fairness
and transparency
·
Build and sustain an
ethical corporate culture and ensure the Company’s ethics are managed
effectively
·
Be the custodian of
the Group’s corporate governance and be responsible for ensuring it complies
with all relevant laws and codes of best governance practices and considers
adherence to other non-binding rules, codes and standards
·
Facilitate the
establishment of mechanisms and processes that support stakeholders in
constructive engagement with the Company
·
Be accountable for
the performance and affairs of the Company, appreciating that strategy, risk,
performance and sustainability are inseparable.
The board provides strategic direction by proposing, discussing and
questioning, while evaluating and approving plans and strategies based on TMG’s
values and objectives and stakeholder interests and expectations
·
Empower management to
provide timely, accurate and relevant feedback on progress with approved
operational and investment plans and strategies
·
Be responsible for
risk management and monitoring with assistance from the audit and risk
committee
·
Prepare and approve
the Company’s annual integrated report, ensuring it conveys adequate
information on the Company’s financial and sustainability performance, focusing
on substance over form
·
Advocate and promote
good governance by the Company’s subsidiaries.
The board
delegates certain functions to well-structured committees without abdicating
its own responsibilities. Delegation is
formal and involves:
·
Establishing and approving formal terms of reference
for each permanent committee of the board
·
Appropriately constituting these committees with due
regard to the skills required by each
·
An annual review of the permanent committees’ terms of
reference.
Annual strategic review meetings enable comprehensive objectives to be
developed for the Group, its business units, executives and senior management. Once
the board has approved the strategy, it oversees and monitors the progress of
the business at quarterly board meetings, with additional meetings held as
required.
The board has an approvals framework which is regularly reviewed and
updated. It clearly sets out authority
levels for the board, its committees and executive management. Matters specifically reserved for the board’s
decision include the adoption of TMG’s strategic direction and the approval of
financial reports for public disclosure, the budget and significant capital expenditure.
As part of the governance structure, the board also approved a
directors’ code of conduct, directors’ expenses policy and a policy for dealing
with price-sensitive information.
All board members are required to disclose their shareholdings in TMG, outside
directorships, personal financial interests and any potential conflicts of
interest.
Board and committee members are supplied with comprehensive information
to discharge their duties effectively.
The board approved a risk management framework that includes a risk
management policy and plan. The risk
management framework facilitates a proactive risk management process, and the
inculcation of TMG’s risk management culture throughout the Group to optimise related
efforts. The board approved the appointment of a group risk officer in terms of
the risk management framework. The board also approved a compliance framework. A group compliance officer and operational
compliance officers have been appointed in terms of this framework. The board is not aware of anything that would
suggest a material breakdown in internal controls during the financial year.
The board agreed that the term ‘prescribed officer’, introduced by the
new Companies Act, applied to TMG’s executive committee members who are not
also executive directors of the Company.
The company secretary informed the relevant people accordingly.
A collective board-effectiveness evaluation was performed at the end of
the financial year.
Attendance at board meetings
|
Name
|
8 Nov 2012
|
12 Mar 2013
|
11
Jun 2013
|
|
K D Dlamini (Chairman)
|
P
|
P
|
P
|
|
A D Bonamour
|
P
|
P
|
P
|
|
J H W Hawinkels
|
P
|
P
|
P
|
|
W Marshall-Smith
|
P
|
P
|
P
|
|
H K Mehta
|
P
|
P
|
P
|
|
R Naidoo
|
P
|
P
|
P
|
|
M S M Xayiya
|
P
|
P
|
P
|
|
M R Basel1
|
P
|
|
|
P – Present
MR Basel was appointed a
director on 8 November 2012 and resigned on 1 March 2013.
BOARD COMMITTEES
During
the year, the following permanent committees assisted the board in discharging
its responsibilities and obligations: audit and risk committee, remuneration
committee, nominations committee and the transformation, social and ethics
committee. Membership of the audit and
risk committee is reflected in its report on page ··.
Membership of the remuneration committee is reflected in its report on
page ··.
Membership of the transformation, social and ethics committee is
reflected in its report on page ··.
All
committees report to the board on their activities. The board is cognisant that this does not
detract from its ultimate responsibility and accountability for the affairs of
the Company.
The board is satisfied that all committees discharged their
responsibilities satisfactorily in accordance with their terms of reference. Copies of these terms of reference are
available from the company secretary on request.
Audit and risk committee
Full details of this committee are set out in its report on pages ·· to ··.
Remuneration committee
Full details of this committee are set out in its report on pages ·· to ··.
Nominations committee
The members
of the nominations committee, specifically regarding gender diversification,
considered various candidates for appointment to the board, and recommended the
appointment of Manana Nhlanhla. Messrs
KD Dlamini (chairman) and HK Mehta were the committee members during the year.
Transformation, social and ethics committee
The transformation, social and ethics committee met on 10 June
2013. It reviewed the Company’s
transformation and initiatives in place and to be implemented for the social
and ethics matters detailed in regulation 43 accompanying the Companies Act. As at the Company’s year-end, the committee
members were Mr MSM Xayiya (chairman), Ms MM Nhlanhla and Mr AD Bonamour.
Executive committee and business unit management
committees
The executive committee, comprising TMG’s senior management, meets
quarterly. Other members of TMG’s management
attend by invitation, as required.
Business unit management committee meetings are held quarterly, ensuring
appropriate oversight of the business units.
Significant matters raised at these meetings are referred to the executive
committee.
COMPANY SECRETARY
The company secretary ensures the board remains cognisant of its duties
and that all directors have full and timely information that may be relevant in
the proper discharge of their duties, collectively and individually, with
detailed guidance on their duties, responsibilities and powers. Directors have unrestricted access to the
advice and services of the company secretary, who plays an active role in the
corporate governance process.
The company secretary assists in determining the annual board plan and
agenda, and in formulating governance and board-related matters. She is closely involved in the induction and
orientation of new directors, and acts as secretary for committees of the
board.
The company secretary, Joanne Matisonn (FCIS HDip Co Law (Wits)), was
appointed secretary to TMG on 3 September 2012.
She was previously group secretary at Avusa from 1 February 1998.
In line with the JSE Listings Requirements, the board has assessed the
competence, qualifications and experience of the group secretary and concluded
that she has the expertise to carry out her duties. This conclusion was arrived at after
reviewing her competence, qualification and experience. The board is satisfied that an arms-length
relationship exists between it and the company secretary as she is not a member
of the board, is not involved in day-to-day operations of the Group and is not
a prescribed officer.
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