Ecsponent's corporate governance

The group endorses the principles contained in the King III 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 discloses its applied and non-applied King III principles. The complete Governance Register for Ecsponent Limited by King III 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 Audit Committee consists of a minimum of three 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, the non-executive 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 that set out its authority and duties. The primary mandate of the committee includes:

  • evaluating the group’s systems of internal financial and operational control;
  • reviewing accounting policies and financial information issued to the public;
  • facilitating effective communication between the board, management and the external auditors;
  • ensuring the independence of the external auditors;
  • recommending the appointment of, and determine the fees payable to the external auditors; and
  • determining and approving the level of non-audit services provided by the external auditors.

The committee furthermore approves the audit plan, reviews the interim and annual results before recommending them to the board for approval and discusses these results and the audit process with the external auditors.

Risk committee

This committee is chaired by an independent non-executive director and the chief executive officer. The financial director, non-executive director and operational management attended the committee meetings as invitees as and when required.
The committee reviews the group’s critical business, operational, financial and compliance exposures, as well as sustainability issues it may face, while taking into account the severity and probability of occurrence of such risks. The committee resolved to review risk as an integral part of all Audit Committee meetings and ensure that the requisite risk management culture, practices and policies are progressively implemented and continuously monitored.

The committee supports the board in discharging its responsibility to ensure 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 and approving group insurance policies and deciding on the extent to which the group should retain risk.

Remuneration committee

The Remuneration Committee comprises entirely of the independent non-executive directors.

  • The committee’s mandate includes assisting the board in:
  • determining the broad policy for executive and senior management remuneration;
  • reviewing the remuneration of the executive directors and company secretary;
  • reviewing the non-executive directors’ fees.

Nominations committee

The Nominations Committee comprises entirely of the non-executive directors. The role of the committee is to assist the board to ensure that:

  • the board has the appropriate composition so that it can execute its duties effectively;
  • directors are appointed through a formal process;
  • induction and ongoing training and development of directors take place; and
  • formal succession plans for the board, chief executive officer and senior management appointments are in place.

Social and ethics committee

The Social and Ethics Committee comprises all of the directors.

The board and Social and Ethics committee subscribes to the highest level of professionalism and integrity in conducting its business and dealing with all of its stakeholders.

In adhering to its code of ethics, the committee is guided by the following broad principles:

  • businesses should operate and compete in accordance with the principles of free enterprise;
  • free enterprise will be constrained by the observance of relevant legislation and generally accepted principles regarding ethical behaviour in business;
  • ethical behaviour is predicated on the concept of utmost good faith and characterised by integrity, reliability and a commitment to avoid harm;
  • business activities will benefit all participants through a fair exchange of value or satisfaction of needs; and equivalent standards of ethical behaviour are expected from individuals and companies with whom business is conducted.