Approach to governance

The Reunert Limited board of directors and group management are firmly committed to sound corporate governance. Reunert subscribes to a set of ethical values that, among others, foster integrity, respect, honesty and openness. The ethos of the group includes personal accountability and individual empowerment. In line with this, the board and management endorse the principles of fairness, responsibility, accountability and transparency as set out in the King Report on Corporate Governance in South Africa of March 2002 (King II). Reunert strives to comply fully with the recommendations of this report and has started aligning itself with the requirements of King III which will become effective in March 2010.

Internal governance structures and roles have been reviewed and improved at both board and management levels.

The board is satisfied that the group, in all material respects, has complied with the provisions and the spirit of the King II code and that the group is in compliance with all the required JSE codes. The group endeavours to incorporate into its actions the best possible mutual interests of all stakeholders, including investors, employees, suppliers, customers and the communities in which we operate.

Board, directors and committees

Composition of the board

The Reunert board provides strategic leadership to the direction and control of the company. The board currently consists of 15 directors with the majority being independent non-executive directors as defined in the King code. Board members duly consider diversity and the appropriate balance of executive, non-executive and independent directors when making or recommending appointments to the board. The directors bring a wide range of experience, wisdom and professional skills to the board. The non-executive directors are deemed to be individuals of calibre and credibility. An induction programme is arranged for new board members and ongoing training and development of directors are conducted through formal processes.

There are four executive directors. The majority of the nonexecutive directors are deemed independent irrespective of the time they have served on this board.

The board has four black non-executive directors of whom two are women. Ms Thandi Orleyn represents the group’s black economic empowerment partner Peotona and is not deemed independent.

Brief résumés for each director can be found here.

Declaration of interests

Several non-executive directors hold directorships in other listed companies. Full details of these directorships are listed as part of their résumés.

When there appears to be a conflict of interest, the director concerned will recuse him-/herself from discussions at board or board committee meetings when the relevant matter is tabled.

Board charter

• demarcation of the roles, functions, responsibilities and powers of the board;
• terms of reference of the various board committees;
• matters reserved for decisions by the board; and
• policies and practices of the board on matters such as corporate governance, board meetings and documentation, disclosure of conflicts of interest and trading by directors in the securities of the company.
  
  

Roles and responsibilities

The roles of the chairman and the chief executive are separate. The chairman is elected by members of the board. The chairman chairs shareholder meetings and has no executive or management responsibilities.

The board, on the recommendation of the nomination committee, appoints the chief executive. In addition, the board, on the recommendation of the remuneration committee, determines the duration of the appointment, terms of appointment and compensation.

Non-executive directors are not appointed under service contracts and their remuneration is not tied to the group’s financial performance. There is a clear division of board responsibilities and no one individual has unfettered powers of decision-making.

Directors are jointly accountable for decisions of the board. Directors have a legal obligation to act in the best interests of the company and the group, to act with due care in discharging their duties as directors, to declare and avoid conflicts of interest with the company and the group and to account to the company for any advantages gained in discharging their duties on behalf of the company.

The board of directors evaluated its own performance, including that of the chairman and the chief executive, during the year. The effectiveness of the sub-committees has also been evaluated.

• retains full and effective control of the group;
• monitors and evaluates the implementation of strategies, policies and management performance;
• sets criteria and approves business plans;
• determines the group’s purpose and values;
• ensures the group complies with sound codes of business practice;
• has unrestricted right of access to management, all company information, records, documents and property;
• has an agreed procedure to take professional advice at the company’s expense;
• ensures a process exists to identify key business risk areas and key performance indicators; and
• guards the interests of minorities.

The board meets quarterly and at any additional times that may be required. Members of senior management can be invited to attend board meetings to facilitate communication between executive management and non-executive board members.

During the past year, the board met on the following dates: