Corporate Responsibility » Corporate Governance » Board and Committees

At the end of the reporting period, the Board of Shoprite Holdings Ltd consisted of eleven directors, six of them holding executive positions in the Group. The Board takes overall responsibility for the Group, including responsibility for identifying key risk areas, considering and monitoring investment decisions, considering significant financial matters, and reviewing the performance of management against budgets and business plans. The Board is also responsible for ensuring a comprehensive system of internal control policies and procedures is operative, and for compliance with sound corporate governance principles. The Board is chaired by a non-executive director, Dr CH Wiese, who has no executive functions. The roles of chairman and chief executive are separate, with each having set responsibilities. The Board is confident that its members have the knowledge, talent and experience to lead a listed company. The non-executive directors are independent of management and exercise their independent judgment. With their depth of experience, they add value to board deliberations. The Board meets at least four times a year.

The Board delegates the day-to-day management of the business to the chief executive assisted by senior management. Senior management is invited to attend board meetings and facilitates the effective control of all the Group’s operational activities, acting as a medium of communication and co-ordination between all the various business units and subsidiaries. Directors retire by rotation at least once every three years, but can make themselves available for re-election by shareholders. In terms of the articles of association, JF Malherbe, EL Nel, AE Karp, JG Rademeyer and TRP Hlongwane retire at the annual general meeting and, with the exception of Mr TRP Hlongwane, being eligible, offer themselves for re-election. The Board appoints the company secretary. The responsibilities of the company secretary include assistance to the chairman in co-ordinating and administering the operation of the Board, the induction of new nonexecutive directors and ensuring the Group complies with all statutory requirements. All directors have access to the company secretary and his services, and may seek independent professional advice if necessary. It is the Group’s philosophy to manage and control its business on a decentralised basis. Senior management meets with the management of the decentralised operations on a monthly basis to review the results of each operational division. Senior management also meets on a weekly basis to review operations, key financial indicators and the advertising strategy. Board meetings are held quarterly to discuss and approve the results of the Group’s operating companies. The Board charter raises corporate accountability and assists the Board in fulfilling its purpose whilst incorporating the principles of good corporate governance, such as discipline, transparency, independence, accountability, responsibility, fairness and social responsibility.

REMUNERATION COMMITTEE
In order to attract, retain and motivate executives of the quality required for the business of the Group, sufficient remuneration is provided.  The Remuneration Committee is a subcommittee of the Board and comprises:

• CH Wiese, chairman (non-executive)
• JA Louw (non-executive)
• JW Basson (executive)
• CG Goosen (executive)

Details of the remuneration of directors are disclosed in note 26, on page 91 of the annual report. The Group participates annually in market surveys, both locally and those focusing on the rest of Africa, to ensure market-related salaries are paid and market-related trends followed in changes to benefits, while at the same time taking into account the intrinsic value of individual ontributions. A substantial portion of remuneration of all managerial staff, especially senior management, is linked to the performance of their respective business units and of the Group as a whole.

NOMINATION COMMITTEE

The Nomination Committee nominates suitable candidates and makes recommendations with regard to the composition of the Board.  The following directors serve on the Nomination Committee, a subcommittee of the Board:

• CH Wiese, chairman (non-executive) 
• JA Louw (non-executive)

AUDIT AND RISK COMMITTEE

The Audit and Risk Committee is chaired by an independent non-executive director and currently consists of two non-executive directors. The committee meets at least four times per year to evaluate, amongst others, accounting practices, internal control systems, and auditing and financial reporting. Its task includes evaluating critical risk areas identified with the help of management and to report on these to the Board. The committee operates under a formal charter approved by the Board. Committee members have unlimited access to all information. Certain members of management are invited to attend and give feedback at committee meetings. The external auditors, the head of the internal audit department and the company secretary attend these meetings and have unlimited access to the committee and its chairman. The chairman of the committee also holds separate meetings with the head of the internal audit department and the external auditors when required, to ensure matters are considered without undue influence. The Board, working through the committee, supervises the financial reporting process. The Board is further responsible for ensuring that adequate ongoing procedures and processes exist to identify, evaluate, manage and monitor key business risks. This is managed by a formal Risk Forum consisting of senior executive management and includes an enterprisewide risk management plan (EWRM), which has been implemented in all business units. The EWRM is reviewed on a regular basis and the Risk Forum regularly reports to the committee. No material loss, exposure or misstatement arising from a material breakdown in the functioning of systems has been reported to the directors in respect of the year under review.
Group assets are insured against loss with appropriate cover being taken out above pre-determined self-insurance levels. The Audit and Risk Committee has fulfilled its responsibilities under its charter for the year under review.

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