Corporate governance


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 subcommittees: 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

which are reviewed and updated annually. The committees are directly responsible to the board. which are reviewed and updated annually. The committees are directly responsible to the board.

The Reunert board and its committees have adopted appropriate charters. Salient features include:
  • Demarcation of the roles, functions, responsibilities and powers of the board and its board committees
  • Terms of reference of the various boardappointed committees
  • Matters reserved for decisions by the board and its committees
  • Policies and practices of the board on matters such as corporate governance, board meetings and documentation, disclosure of conflict of interest and trading by directors in the securities of the company.

Meeting attendance 2010                              
  Board   Audit and risk
Director   2  
TS Munday   √   √   √   √           √   √   √   √   √   √  
BP Connellan   √   √   √   √   √   √   √   √              
SD Jagoe   √   √   √   √   √   √   √   √   √   √   √   √   √   √  
KJ Makwetla   A   √   √   √                 √   √   √  
TJ Motsohi   √   A   √   √                      
KW Mzondeki   √   √   √   √   √   √   √   √              
NDB Orleyn   √   √   √   A           √   √   A        
JC van der Horst   √   √   √   √           √   √   √   √   √   √  
R van Rooyen   √   √   √   √   √   √   √   √              
G Pretorius2   √   √                          
NC Wentzel3       √   √                      
BP Gallagher   √   √   √   √                      
GJ Oosthuizen   √   √   √   √                      
DJ Rawlinson   √   √   √   √                      
And annual general meeting. A = Apology received.
2 Retired effective 2 August 2010.
3 Appointed effective 1 August 2010.  

Audit and risk committee
R van Rooyen (chairman), BP Connellan, SD Jagoe and KW Mzondeki.

Mr R van Rooyen was appointed chairman of the audit and risk committee on 2 February 2010, after Mr KS Fuller retired from the board at the annual general meeting. Mr MJ Shaw retired at the same time.

The audit and risk committee consists of four independent non-executive directors and meets at least twice a year. The external auditors, chairman of the Reunert board, chief executive, financial director, internal auditors and financial executives attend committee meetings by invitation.

The committee has considered and satisfied itself on the suitability of the expertise and experience of the financial director, the appropriateness of the expertise and adequacy of resources of the finance function and experience of the senior members of management responsible for the financial function.

In terms of its charter, the main responsibilities of the audit and risk committee include:
  • Monitoring the quality and integrity of the financial statements and other relevant financial reports and reviewing all judgements and inputs to ensure a balanced assessment of the performance and financial position of the group is presented
  • Ensuring appropriate accounting policies have been adopted and consistently applied
  • Satisfying itself of the adequacy and effectiveness of the internal control systems of the group
  • The appointment of the external auditors
  • Satisfying itself on the independence of the external auditors
  • Determining the terms of engagement and approving fees for external audit and non-audit work carried out by the external auditors
  • Ensuring that the appointment of the external auditors complies with the Companies Act and any other relevant legislation
  • Reviewing and reporting on compliance with the King III code
  • Monitoring the financial reporting cycle and developments in accounting standards
  • Reviewing and approving the annual internal audit operational plan
  • Reviewing the scope and effectiveness of the external and internal audit functions
  • Overseeing operation of the risk management function that incorporates insurance, security, information technology, occupational health and safety and environmental issues
  • Overseeing potential material litigation affecting the group.

The terms of reference of the audit and risk committee allows investigation into any activity of the group and it can seek information and advice from any employee or expert to carry out its duties. The committee has not received any complaints relating to accounting practices or other matters for any operation in the group during the review period.

The chairman of the committee meets at least annually and individually with external and internal audit, the chief executive and financial director without any other executives of Reunert present. The committee has unrestricted access to management, external auditors and the internal audit team.

The committee discharges its duties to its widely held subsidiaries in the same meetings held for Reunert Limited, as permitted by section 269A of the Companies Act.

As from 2011 the audit and risk committee will function as two separate board committees.

Remuneration committee
NDB Orleyn (chairman), SD Jagoe, TS Munday and JC van der Horst.

The remuneration of executive directors and executives in operating divisions is determined by the remuneration committee. The committee consists of at least three members who are non-executive independent directors of the board. The chairman of the Reunert board may not act as the chairman of the committee.

Mr MJ Shaw retired from the committee at the annual general meeting in February 2010. Ms NDB Orleyn replaced Mr SD Jagoe as chairman of the remuneration committee on 2 February 2010.

The committee meets at least twice a year to make recommendations to the board on the framework of executive remuneration. The committee is tasked with ensuring that individual awards are linked to performance and aligned with the interests of the company’s shareholders.

In terms of its charter, the main responsibilities of the remuneration committee include:
  • Designing, monitoring and communicating Reunert’s remuneration policies
  • Approving the remuneration of the chief executive, executive directors and other senior executives
  • Recommending to the board the granting of share options in terms of the Reunert share option schemes
  • Recommending and approving performance-based incentives for executive directors and senior executives
  • Compiling the remuneration report to shareholders.

The chief executive attends these meetings by invitation.

More details on Reunert’s remuneration policy and criteria for performance incentives are disclosed in the remuneration report and in note 24 of the annual financial statements.

Nomination committee
TS Munday (chairman), SD Jagoe, KJ Makwetla and JC van der Horst.

This committee comprises independent nonexecutive directors only and meets at least annually. The chairman of the committee is the chairman of the board.

Mr MJ Shaw retired from the committee at the annual general meeting.

The committee’s terms of reference have been approved by the board and are reviewed every year. The committee makes recommendations to the board on the composition of the board and identifies and nominates knowledgeable candidates with appropriate experience to fill any vacancies. The integrity and standing of candidates are verified and that the candidate complies with the requirements of the Companies Act, 2008 and applicable codes.

The committee drives the process and reviews the results of the annual performance evaluation of individual directors, the board and board committees, including whether audit and risk committee members collectively have the required level of experience and qualifications to fulfil their duties.

The committee is tasked to advise the board on succession planning of the chairman, chief executive and executive directors. Senior executive appointments are the responsibility of the chief executive and the executive. The nomination committee is informed of all recommendations and decisions.

The committee is entitled to obtain independent professional advice on any issue within its scope.

Group executive and risk management committee
NC Wentzel (chairman), BP Gallagher, GJ Oosthuizen and DJ Rawlinson.

Mr NC Wentzel assumed responsibility for the group executive and risk management committee on 1 August 2010 after the retirement of Mr G Pretorius. The group executive and risk management committee comprises executive directors only and is constituted to assist the chief executive to manage the group. Executive directors and senior executives meet regularly to guide and control the overall direction and strategy of the group and to identify risk areas. The committee met 25 times in the past year.

The group executive and risk management committee is responsible to the board for overseeing the group’s risk management programme. The day-to-day responsibility for risk management and communication of policies remains with the executives of Reunert and the executives of each operation in the group.

The internal audit department assists the board and executives in monitoring the risk management programme.