Board Committees

The Committees will continue to operate within the terms of reference set out in their respective charters and ensure that their meetings address all regular matters reserved for the Committees’ consideration.
 
Audit Committee
A

O Ighodaro (Chairman)
Independent non-Executive
K Dlamini*
Independent non-Executive  
N Gwagwa
Independent non-Executive 
P Langeni
Independent non-Executive 
C Seabrooke**
Lead Independent non-Executive

*Kuseni Dlamini resigned as alternate member of the Audit Committee with effect from 25 May 2018
**Chris Seabrooke resigned as Chairman and member of the Audit Committee with effect from 30 September 2018 He acted as Chairman of the November 2018 meeting in Funke’s absence

Meets three times per year

Key focus areas in 2018

  • Considered and recommended the Annual Financial Statements, Integrated Annual Report, interim and final financial results, trading updates and trading statements to the Board for approval
  • Monitored the effectiveness of the Group and Divisional internal financial control environment
  • Monitored the implementation of IFRS 9 ‘Financial Instruments’ and IFRS 15 ‘Revenue from Contracts with Customers’ to ensure appropriate accounting judgements and disclosures
  • Monitored and approved Massmart Mandatory Audit Firm Rotation policy and pre-approved the nature and extent of future non-audit services
  • Monitored the implementation and adoption of the Group’s transparent tax strategy and policy and reviewed matters of significance across the Group
  • Reviewed the scope and effectiveness of the external and internal audit functions in terms of their audit quality, expertise and independence, and considered the key audit matters reported
  • Reviewed the adequacy and effectiveness of combined assurance, compliance and information and technology governance
  • Considered and recommended the appointment of the new sponsor and corporate broker to the Board
  • Considered the treatment and implications of accounting standards on the Group’s voluntary buying association
  • Reviewed, considered and took appropriate action in relation to a letter from the JSE on 20 February 2018 in connection with proactive monitoring
  • Monitored and regularly reviewed the Group financial covenants in relation to its borrowings and debt position
  • Assessed the independence and performance of the company’s auditors and audit partner, Roger Hillen
  • Monitored the transition of the Group’s FSB License to a new legal entity
  • Appointed a new Chief Audit Executive, Phuti Semenya in August 2018

Committee focus for 2019 and beyond

  • Continue to monitor and assess the effectiveness of Group financial reporting and internal financial controls
  • Review and consider management’s plans in respect of IFRS 16 ‘Leases’
  • Monitor the development and adoption of a transparent tax strategy and policy
  • Consider the developments arising from the Mandatory Audit Firm Rotation relevant regulatory developments within the ambit of the Audit Committee
  • Continue to monitor the effectiveness of information and technology governance and its ability to support the Group in achieving its strategic objectives
  • Monitor the effectiveness of cyber security risk management
  • Assess and apply findings arising from the JSE Proactive Monitoring Progress report
Risk Committee
R

O Ighodaro (Chairman)
Independent non-Executive
N Gwagwa
Independent non-Executive  
G Hayward
Executive 
P Langeni
Independent non-Executive 
C Seabrooke* 
Lead Independent non-Executive 
J van Lierop 
Executive


*Chris Seabrooke resigned as Chairman and member of the Risk Committee with effect from 30 September 2018 
**Dhari Moodley and Joe Ralebepa were redesignated as permanent invitees and no longer members with effect from 20 August 2018 thereby ensuring that the Committee comprises of a majority of non-Executive Directors

 

 

 

Meets twice a year

Key focus areas in 2018

  • Reviewed and monitored the significant risks and opportunities facing the organisation taking into consideration the Group’s long-term strategy, its operating context and environment, the interests of key stakeholders, media coverage and/or public concern
  • Provided independent and objective oversight of risk management across the Group and its Divisions by directing the way risk management should be approached and addressed in the Group
  • Considered the Group’s IT strategy and considered the adequacy of the cyber security, information management and data security interventions in place
  • Considered events and risks that occurred or were emerging and were expected to have a direct or indirect impact on the Group’s risk profile
  • Monitored Massmart’s effectiveness in the application of King IV principles and recommended practices
  • Reviewed the appropriateness of the combined assurance model
  • Ensured that the Group maintained an effective and independent ethics and compliance function

Committee focus for 2019 and beyond

  • Continue to monitor management’s risk assessments and their response to significant risks
  • Ensure that consideration is given to the upside presented by such risks to ensure that possible opportunities are captured
  • Conduct a review of global, domestic, industry and the competitor risk environment
  • Review of the Group’s information and technology governance and controls framework and its responsiveness to the Group’s IT strategy, including the adequacy of cyber security measures
  • Review Massmart’s level of risk appetite and tolerance and its determination of what constitutes excessive risk
  • Monitor increasing and evolving regulatory developments and their consequential impact on the Group’s growth agenda
Nominations Committee
N

K Dlamini (Chairman)
Independent non-Executive  
P Langeni 
Independent non-Executive 
E Ostalé
Independent non-Executive  
C Seabrooke*  
Lead Independent non-Executive 

* Chris Seabrooke resigned from the Nominations Committee on 25 May 2018

Meets four times a year

Key focus areas in 2018

  • Reviewed the composition of Board Committees and, where required, recommended to the Board the reconstitution of Board Committees to ensure that the Committees comprised members with the relevant knowledge and skills
  • Assessed and made recommendations on the appointment of non-Executive Directors to the Board
  • Reviewed the composition of the Board and found no relationships or circumstances likely to affect, or which appear to affect, the judgement of Chris Seabrooke, Lulu Gwagwa and Phumzile Langeni as Independent non-Executive Directors. These Directors have served on the Board in excess of nine years
  • Reviewed the appropriateness of the Board’s race and gender diversity policies and ensured that Board appointments were made with due consideration thereof, pleasingly targets set in both the race and gender policies were met
  • Ensured that the induction and ongoing training and development of Directors took place
  • Continued to search for suitably qualified non-Executive Directors to broaden the Board’s pool of Independent non-Executive Directors and strengthened succession planning. Four female Independent non-Executive Directors were appointed as at the date of this report

Committee focus for 2019 and beyond

  • Continue to review Board and sub-Committee composition in line with Board race and gender diversity policies
  • Ensure that policies and procedures are in place to ensure the Board leads ethically and effectively
  • Assess and enhance the effectiveness of succession planning for senior Executives, the CEO, the CFO and non-Executive Board Directors
  • Seek independent advice and external assurance in respect of the Board’s self-assessment
  • Monitor of conflicts of interest, Directors dealing in company securities, declarations of interest and regularly review and assess independence of Independent non-Executive Directors
Social and Ethics Committee
SE

P Langeni (Chairman)
Independent non-Executive  
Prof De Jongh
Independent permanent invitee
G Hayward 
Chief Executive Officer
S Muigai
Non-Executive Director

 

Meets twice per year

Key focus areas in 2018

  • Considered, analysed, reviewed and deliberated management reports on ethics, health and public safety, food and other products safety, supporting small local manufacturers and socio-economic development
  • Reviewed and assessed Massmart’s response to the listeriosis outbreak in South Africa, ensuring the effectiveness of Massmart’s testing protocols
  • Oversight of Massmart’s talent strategy
  • Reviewed and assessed the effectiveness of the Group’s transformation initiatives including, monitoring the Group’s progress against BBBEE and employment equity targets
  • Considered Massmart’s interaction with key stakeholders and industry bodies to understand the perspectives of those impacted by Massmart and who in turn have an impact on Massmart
  • Assessed compliance with all statutory duties assigned to it in terms of section 72(4) and Regulation 43 of the Companies Act of 2008 and King IV and monitored relevant regulatory developments
  • Reviewed and considered the Group human capital and related talent management and retention strategies
  • Considered the Group’s response strategies to address equal pay for work issues and government policy on minimum wage

Committee focus for 2019 and beyond

  • Consider South Africa’s regulatory, political, environmental and social landscape and its implications for Massmart and the retail sector
  • Monitor and track the Group’s employment equity plans and related progress
  • Monitor the Group’s pay parity response strategies and compliance
  • Ensure that systems, procedures and policies are in place to enable Massmart to maintain its responsible corporate citizenship status
  • Massmart’s continued participation in various internationally accredited governance, social and environmental indices
  • Monitor Group structures, particularly in relation to responsible Private Label sourcing
  • Monitor Group compliance with minimum wage legislation and applicable wage sectoral determinations
  • Monitor the Group’s progress against its transformation agenda
Remuneration Committee
M

P Langeni (Chairman)
Committee Chairman and Independent non-Executive Director 
K Dlamini 
Independent non-Executive Director 
E Ostalé 
Non-Executive Director 
C Seabrooke* 
Independent non-Executive Director

* Chris Seabrooke resigned from the Remuneration Committee on 25 May 2018

Meets four times a year

Key focus areas in 2018

  • The revised Massmart Group remuneration policy was approved in May 2018
  • A non-financial metric constituting 20% of the total Annual Incentive Plan (AIP) metric was approved and implemented as proposed
  • Reviewed annual salary increase criteria applied and the key performance indicators used to evaluate the performance of Executive Directors and senior executives
  • Oversight of the engagement with shareholders on best practice remuneration and enhanced remuneration reporting
  • Review and approval of the remuneration report

Committee focus 2019

  • Ensure the continued relevance of the remuneration policy
  • Ensure that remuneration is implemented in accordance with the remuneration policy
  • Ensure that employees are remunerated fairly, responsibly and transparently
  • Continued entrenchment of our commitment to remunerate employees fairly, responsibly and transparently

More information is available on the activities and responsibilities of the Audit, Risk and Nomination Committees
More information is available on the activities and responsibilities of the Executive, Remuneration and Social and Ethics Committees