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  ANNUAL REPORT 2007  
CORPORATE governance  
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In keeping with current practice, a cash-based share purchase scheme and a share-price-linked incentive scheme were introduced during the 2007 financial year. This enables more employees to participate in long-term incentives, guard against excessive dilution and optimise tax planning.
 
 
The Reunert board of directors and group management are firmly committed to sound corporate governance and 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 code).

Reunert strives to comply fully with the recommendations of the King report, including the code of corporate practice and conduct, and motivates its staff to conduct business activities with integrity. The board is satisfied that the group, in all material respects, has complied with the provisions and the spirit of the King 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 it operates.
 
Board, directors and committees
Composition of the board
The Reunert board currently consists of 12 directors, seven of whom are non-executive, independent 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 composition of the board with brief resumés for each director appears in the Board of directors.
 
Declaration of interests
Several non-executive directors hold directorships in other listed companies. Full details of these directorships are listed in the Board of directors.

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
The Reunert board has adopted a board charter. Its salient features include:
  • 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, but 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 his 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 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 has evaluated its own performance, including that of the chairman and the chief executive, this past year. Such an assessment will be completed periodically.

The Reunert board of directors, among other functions:
  • 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 all company information, records, documents and property;
  • ensures a process exists to identify key business risk areas and key performance indicators; and
  • guards the interests of minorities through its independent, non-executive directors.
The board meets quarterly and at any additional time as required. Members of senior management may be invited to attend board meetings to facilitate communication between executive management and non-executive board members.

During the past financial year, the board met four times on the following dates:
         
Date   Meeting   Apologies tendered
6 February 2007   Board & AGM   KC Morolo
17 May 2007   Board  
30 August 2007   Board   KC Morolo
20 November 2007   Board  
 
Appointment and re-election of directors
Directors are subjec to retirement by rotation and re-election by shareholders at an annual general meeting at least once every three years under the company’s articles of association. The board charter is an integral part of the conditions of appointment of all directors. Procedures for appointments are formal and transparent and a matter for the board as a whole.

Non-executive directors retire after reaching the age of 70 at the next annual general meeting. Executive directors retire from the board at 63 years of age at the next annual general meeting.

Ms ND Orleyn, having been elected to the board during the year, is required to retire at the next annual general meeting but, being eligible, offers herself for re-election. Messrs BP Connellan, BP Gallagher and G Pretorius and Ms KC Morolo retire by rotation at the next annual general meeting. The nomination committee has recommended that they be re-elected and they have offered themselves for re-election.

Details of remuneration, fees or other benefits earned by directors in the past year are given in note 29 to the annual financial statements.
 
Board committees
In terms of the articles of association, the board has the power to appoint board committees and to delegate powers to these committees. The board has four sub–committees: the audit and risk committee, the remuneration committee, the nomination committee and the group executive and risk management committee. Minutes are kept of all committee meetings. These committees can, at their own discretion, seek independent, outside professional advice when necessary. All committees have charters approved by the Reunert board. The committees are directly responsible to the board.
 
 
     
 
CORPORATE governance  
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