Corporate Governance Practices

The Group’s corporate governance practices are embedded in the following:

Ethical and moral behaviour
The Group is committed to promoting the highest standards of ethical behaviour among its directors, management, and employees. In accordance with this objective, and in the interest of good corporate governance, the code of conduct is subject to regular review. This code of conduct sets out the standard expected in dealings with customers, employees, competitors, suppliers, the community, and shareholders. All employees are expected to comply with the code. All new employees receive training on the code of conduct at induction. The Group’s human resources division monitors compliance with the code across the Group and ensures that complaints are followed up, and disciplinary actions taken where appropriate. Employees and other stakeholders may anonymously report instances of unlawful or unethical behaviour to the Tip-offs Anonymous hotline, which is managed by a third party service provider. Allegations are investigated by dedicated specialists. The Group applies the same code of conduct at all subsidiaries, including within Non-RSA subsidiaries. Any transgressions of the Group’s code of conduct during the 2010/11 financial year were dealt with appropriately in terms of the code.

Stakeholder communication
The Group strives to have transparent, open and clear communication with all its material stakeholders. Communication with such stakeholders has always been an important feature of the Group’s corporate governance practices. Financial and non-financial information is disseminated timeously and accurately to relevant stakeholders. Regular presentations are made by executive directors and senior management to institutional investors, analysts and the media. A corporate website (http://www.shopriteholdings.co.za) communicates the latest Group financial and operational data, as well as relevant historical information. Shareholders are encouraged to attend the annual general meeting, which provides an opportunity for shareholders to raise pertinent questions and to interact with directors. A summary of the proceedings of general meetings and the outcome of voting on items of business is posted on SENS immediately following the annual general meeting. The Board is not aware of any material requests under the Promotion of Access to Information Act that were either complied with or denied.

Insider trading and price sensitive information
The Shoprite Group has implemented a closed period policy to govern share trades by the Group’s directors and employees. Directors and employees who may have access to price-sensitive information are precluded from dealing in Shoprite shares from one (1) week before the end of the interim and year-end financial periods until the release of the Group’s interim and final results. In terms of the policy, shares include options, financial instruments, and securities, as defined by the JSE Listings Requirements. Appropriate additional closed periods may be invoked by the Board. In terms of the policy, the Company Secretary regularly disseminates written notices to all directors and members of senior management throughout the Group, highlighting the provisions of the JSE Listings Requirements and the Securities Services Act, and informing them that dealing in Shoprite Holdings shares during certain restricted periods may not be undertaken. Dealings in securities of the Company by the Directors and alternate directors of Shoprite Holdings and its main trading subsidiary are disclosed as required by the JSE Listings Requirements. The Board has also implemented a formal approval framework that requires directors and alternate directors to obtain written approval to deal in Company securities from the Chairman or a senior director. The Chairman is required to obtain written clearance from the lead independent director, and the CEO from the chairman. It is mandatory for directors to notify the Company Secretary of any dealings in the Company’s securities. This information is then disclosed on SENS within 48 hours of the trade being affected.