Massmart’s business model and structure is underpinned by its purpose to be the most trusted wholesale and retail Group in sub-Saharan Africa, delivering exceptional value to mass market consumers. As such, good business is at the centre of everything we do.

We believe in making well-considered and informed choices to shape a better future for our business and stakeholders alike. We are fully committed to sustainable business practices and continuously monitor and measure our impact on the planet, people and our communities at large.

Massmart believes that the first steps towards good corporate governance must include embracing relevant governance and regulatory frameworks, as well as corporate best practice. More than this, the Board believes that good governance contributes to value creation in the long term and improves the trust and confidence of the Group’s stakeholders. We believe that Massmart’s governance framework and related business support structures support its core purpose, values and strategy, and ensure its conduct is congruent with it being a responsible corporate citizen.

During the year, we refined our governance structures in line with the principles of the King IV Report on Corporate Governance for South Africa, 2016 (King IV). I am pleased to report that, for the year ended December 2017, the Board is satisfied that it has fulfilled its responsibilities in accordance with its charter, King IV and applicable regulatory and legislative requirements.

 

Corporate governance approach

King IV, which is the primary South African corporate governance framework, forms the backbone to Massmart’s own corporate governance framework. In addition, Massmart applies high ethical standards to its operating environment as reflected in the Group’s Code of Ethical Conduct. The following significant refinements were made to Massmart’s governance framework and supporting structures to align with the principles of King IV:

  • We updated our Board and Board sub-Committee charters to align with the principles introduced by King IV;
  • To ensure Board diversity, a race diversity policy was approved by the Nominations Committee and ratified by the Board;
  • The Group’s information and technology, tax, and remuneration policies were reviewed and updated, where applicable; and
  • In order to meet the specific requirements of King IV on the Social and Ethics Committee’s oversight role with regard to social aspects of the Group’s remuneration policy, Ms Phumzile Langeni, who is currently the Chairman of the Social and Ethics Committee, was appointed as a member of the Remuneration and Nominations Committees.

In addition to this corporate governance framework, the Group is committed to complying with all legislation, regulations and best practices relevant to our business, in every country where we operate. Massmart’s Executive Committee has established a management sub-Committee to focus on Ethics and Compliance. This sub-Committee meets six times a year to consider legal and regulatory updates; conducts an ethics review; identifies specific areas of focus that Massmart’s compliance team manage closely; receives feedback from Massmart Audit Services; and to review ethics and compliance matters in general. Additionally, the sub-Committee regularly considers and assesses future areas of focus holistically to help drive and promote a culture of good ethical conduct and compliance.

Whilst the Massmart Executive Committee and Board sub-Committees have delegated oversight in relation to areas of governance under their mandate, the Board ultimately endorses and accepts collective responsibility for achieving the values underpinning good governance advocated by King IV, namely: integrity; competence; fairness; responsibility; transparency; and accountability. It further embraces the concept of integrated thinking encapsulated in King IV, which underpins corporate citizenship, stakeholder inclusivity, sustainable development and integrated reporting. The Board and its sub-Committees regularly review Massmart’s governance structures and processes to ensure that the Board exercises effective and ethical leadership, conducts its affairs as a good corporate citizen and takes appropriate decisions to ensure sustainability.

For the year ended December 2017, the Board is of the view that the practices underpinning the principles espoused in King IV are entrenched in many of the Group’s internal controls, policies and procedures, governance frameworks and supporting structures.

Kuseni Dlamini
Chairman
29 March 2018