Our governance philosophy

Massmart’s purpose to be the most trusted wholesale and retail Group in sub-Saharan Africa has continued to guide our efforts and aspiration to deliver exceptional value to our customers in a difficult trading environment.

We are fully committed to sustainable business practices and we continuously monitor and measure our impact on the communities in which we operate, and on the environment. We believe that the foundation to attaining the highest standards of governance include embracing robust governance and business practices that are consistent with applicable regulatory frameworks, as well as corporate best practice.

In the face of recent corporate governance failures in the South African business landscape, we have continued to strengthen our efforts to ensure that our business practices are guided by and comply with requirements of applicable regulatory frameworks, including the Companies Act of 2008, the JSE Listings Requirements and the King IV Code on Corporate Governance for South Africa, 2016 (King IV). As such, the effectiveness of our governance, risk and compliance frameworks, standard operating policies, procedures and controls are assessed against the ability of our business to fulfil its purpose and commitment while ensuring that sustainable value is created for stakeholders. We are pleased to report that our Board continues to work effectively in providing strategic oversight and support to our Executive Committee. For the year ended December 2018, the Board satisfactorily discharged and fulfilled its responsibilities in accordance with the Board Charter, King IV and applicable regulatory and legislative requirements.

 

Corporate governance approach

The Massmart corporate governance framework is guided by the principles enshrined in King IV, which has been applied by the Board since its implementation effective from October 2017 to deliver desired governance outcomes. In addition, Massmart continues to embrace and apply the highest ethical standards to its operating environment and business practices as reflected in the Group’s Code of Ethical Conduct.

The Group is also committed to complying with all legislation, regulations and the highest standards of corporate governance and best practices relevant to our business, in every country in which we operate. Massmart’s Executive Committee has established a management sub-Committee, the Ethics and Compliance Committee, to oversee that the Group’s ethics and compliance programme which continues to monitor and measure the Group’s efforts towards attaining effective ethical leadership and compliance. This sub-Committee meets six times a year to consider legal and regulatory developments and risks impacting the business; conducts a Group ethics and compliance review; identifies specific focus areas that Massmart’s compliance team manage closely; receives feedback from Massmart Audit Services; and addresses any ongoing ethics and compliance matters in general. Additionally, the sub-Committee regularly considers and assesses future focus areas 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 Committees regularly review Massmart’s governance structures and processes to ensure that the Board exercises effective and ethical leadership, conducts its affairs as a responsible corporate citizen and makes appropriate decisions to ensure sustainability.

King IV advocates an outcomes-based approach, and defines corporate governance as the exercise of ethical and effective leadership towards the achievement of the following governance outcomes:

  • Ethical culture
  • Good performance
  • Effective control
  • Legitimacy

Since its adoption of King IV in 2017, the Group has continued to apply and assess its business practices against the four desired governance outcomes. We are pleased to report that, for the year ended December 2018, the Board is satisfied with management’s efforts to ensure that the practices underpinning the principles espoused in King IV are entrenched in the Group’s internal controls, policies and procedures, governance and compliance frameworks and supporting structures.

A register documenting the summarised assessment of the King IV principles applicable to Massmart is available here.