Ecsponent's corporate governance

The group endorses the principles contained in the King IV report on corporate governance and confirms its commitment to the principles of fairness, accountability, responsibility and transparency as advocated therein. The board strives to ensure that the group is ethically managed according to prudently determined risk parameters and in compliance with generally accepted corporate practices and conduct.

The group’s Corporate Governance Statement, which includes the complete governance register in respect of the King IV Charter is available here.

Accounting and internal controls

The board has established controls and procedures to ensure that the accuracy and integrity of the accounting records are enhanced and maintained, and to provide reasonable assurance that assets are safeguarded from loss or unauthorised use. These controls and procedures further ensures that the financial statements may be relied upon for maintaining accountability for assets and liabilities and preparing the financial statements.

Ecsponent's Memorandum of Incorporation (MoI)

The Memorandum of Incorporation (“MoI”) sets out the structure and governance of the company. Matters dealt with in the MoI include the rights, duties and responsibilities of shareholders, directors and others within and in relation to the company. The MoI of the company is required to be consistent with the Companies Act, 2008 and it is legally binding between the company and each shareholder, between or among the shareholders of the company, between the company and each director and between the company and each prescribed officer of the company, or other person serving the company as a member of the audit committee or as a member of a committee of the board in the exercise of their respective functions within the company.

Any amendment to the MoI must be approved by special resolution of shareholders for it to be effective, unless otherwise provided for in the Companies Act, 2008.

This updated Memorandum of Incorporation was adopted by special resolution of the Shareholders on 2 November 2017.

Ecsponent's board committees

Sub-committees appointed by the board include the Audit and Risk Committee, Social and Ethics committee, Nominations Committee and the Remuneration Committee. The committees all operate in terms of approved charters, which define their roles and meet independently before reporting to the board. Any decisions taken by these committees all require approval of the board prior to implementation.
Details of the sub-committees including responsibilities are described below.

Audit committee

The Company has established an Audit Committee, which met four times in the last financial year (being the year ended March 2017), and four times in the subsequent period ended 30 June 2018.

The Audit and Risk Committee consists of the following members:

Member name Function
KA Rayner Member
W Oberholzer Member
BR Topham Chairman

All members are independent non-executive directors. The board is of the opinion that the current committee constitution is adequate to ensure the governance required. The chief executive officer, the financial director and the external auditors attend meetings of the committee as invitees.

The committee acts in accordance with written terms of reference as confirmed by the Board, which terms set out its authority and duties. The primary mandate of the committee is to ensure:

  • evaluate the group’s systems of internal financial and operational control and ensure that the Company has established appropriate financial reporting procedures and that those procedures are operating;
  • review accounting policies and financial information to be issued to the public;
  • facilitate effective communication between the board, management and the external auditors;
  • recommend the appointment of, and determine the fees payable to the external auditors and determine
  • ensure suitability of the appointment of external auditors and the designated individual partner, specifically taking into account any information pursuant to paragraph 22.15(h) of the JSE Listing Requirements;
  • approve the level of non-audit services provided by the external auditors;
  • review the financial accounts of the Group and recommend adoption of the financial reports to the Board; and
  • ensuring, on an annual basis, that the financial director has the appropriate expertise and experience.

The committee furthermore reviewed the critical business, operational, financial and compliance exposures and sustainability issues facing the Group, taking into account the severity and probability of occurrence of such risks.

The committee supports the board in discharging its responsibility for ensuring that the risks associated with its operations are effectively managed. This is done through, inter alia:

  • setting out a process for the identification and management of risk and sustainability issues;
  • reviewing and assessing any risk management issues;
  • considering items of risk, assessing such risks and determining required solutions, and where required, reporting the most significant risks to the board;
  • reviewing corporate governance guidelines and implementation; and
  • reviewing risk.

Remuneration and Nominations committee

The Remuneration and Nominations committee comprised entirely of the independent non-executive directors met twice during the last financial period, and three times during the period ended 30 June 2018.

The Remuneration committee and Nominations committee were merged into a single combined committee in August 2017.

The Remuneration and Nominations Committee consists of only the non-executive directors, the majority of whom are independent.

The members are:

Member name Function
KA Rayner Chairman
RJ Connellan Member
G Manyere Member

The committee assist the board in:

  • determining the broad policy for executive and senior management remuneration;
  • the remuneration of the executive directors and company secretary;
  • reviewing the non-executive directors’ fees;
  • to assist the Board in the appointment of directors that are suitably skilled, and after taking into account its policies on the race and gender diversity.

The Company’s remuneration policy and implementation report will be tabled for a separate non-binding advisory vote by Shareholders at each annual general meeting. In the event that the remuneration policy or the implementation report are voted against by 25% or more of the votes exercised, the announcement on the voting results will provide an invitation to dissenting shareholders to engage with the Company and will specify the manner and timing of such engagement.

Social and Ethics committee

The Company subscribes to the highest ethical standards and behaviour in the conduct of its business and dealings with all stakeholders. The Social and Ethics Committee met four times in the last financial year (being the year ended March 2017), and three times in the interim period ended 30 June 2018.

The Social and Ethics Committee consists of the following members:

Member name Function
W Oberholzer Chairman
P Matute Member
TP Gregory Member
BR Topham Member
DP van der Merwe Member

Social and Ethics committee

Our purpose to create sustained long-term wealth for our stakeholders guides us to strive to positively influence each of our core business units and every society in which we operate. This Group’s foundation is built on the application of sound business practices and strong, ethical and sustainable practices across all levels of business. Read our 2018 Governance and Sustainability Report and view our B-BEE certificate.