The Board is wholly responsible for the formulation, development and effective implementation of Group strategy and delegates operational strategy implementation and general executive management of the business to its Executive Directors and Executive Committee. This is achieved through the direction provided by the application of the Board Charter, Memorandum of Incorporation, its respective letters’ of appointment and its application of King IV.

The Board actively delegates its authority to the five sub-Committees and the Executive Committee in accordance with the scope and mandate prescribed in Committee respective Charters. The Board and sub- Committee Charters enable cross membership between the Board and its sub-Committees, which in turn requires coordinated timing of meetings; and avoidance or duplication or fragmented functioning in so far as possible and consequently, the Board achieves effective collaboration. There is a balanced distribution of power in respect of membership across Committees, so that no individual has the ability to dominate decision-making, and no undue reliance is placed on any individual. Additionally, the Board and Committee Charters confer on each Committee specific matters relevant to that Committee and work is allocated accordingly. The Board delegates its authority to the Massmart Executive Committee through its delegation of authority, which is reviewed annually by the Board.

Board composition

The role of all Directors is to bring independent judgement and experience to the Board’s deliberations and decisions. At the time of this report, the Board comprised of two Executive Directors, six Independent non-Executive Directors and three non-Independent non-Executive Directors, and as such reflects an appropriate balance with a majority of Independent non-Executive Directors.

Underpinned by objectivity and impartiality, the Board’s diversity has served as a source of its leadership strength. With combined experience ranging from global retail and commercial experience to cultural and gender diversity, business experience and length of service, Massmart’s Board is well positioned to add value to the business. We continue to meet our gender equality target of appointing 40% of women to Independent non-Executive Director positions and every effort will be made to maintain this. The Board has been further strengthened by achieving its race diversity target of appointing 50% African, Coloured and Indian (ACI) candidates to open Executive and non-Executive Director positions. The Board is satisfied that its composition reflects the appropriate mix of knowledge, skills, experience, diversity and independence.

The gender and race diversity profile of the Board as at the date of this report is outlined in the infographic to the right.

Director changes

In 2018 a number of non-Executive Director changes took place.

On 25 May 2018 we announced Olufunke (Funke) Ighodaro’s appointment as an Independent non-Executive Director and a member of the Massmart Audit and Risk Committees. Funke’s accomplishments as a seasoned corporate executive have seen her play a vital and strategic role in a number of corporates where she served, and continues to serve, in various governance structures.

On 23 August 2018, shareholders were informed that Chris Seabrooke had agreed to continue as Lead Independent non-Executive Director and Deputy Chairman but would cease to be a member of the Board Committees and step down as Chairman of the Remuneration, Audit and Risk Committees effective 30 September 2018. Funke succeeded Chris as the Chairman of the Audit and Risk Committees, while Phumzile Langeni was nominated and assumed the role of Chairman of the Remuneration Committee.

On 28 February 2019 we announced the appointment of Lindiwe Mthimunye to the Board as an Independent non-Executive Director. Lindiwe was further nominated to serve on the Audit and Risk Committees. We also announced the appointment of JP Suarez as a Walmart-appointed non-Executive Director in place of Roger Burnley. On the same day we informed shareholders that Chris Seabrooke’s retirement will become effective on 23 May 2019, from which date Chris will step down as the Deputy Chairman and Lead Independent non-Executive Director of the Board.

Johannes van Lierop, Massmart’s Chief Financial Officer, has indicated that for personal reasons he is not available to extend his tenure in South Africa after the formal conclusion of his South African work visa in February 2020. He has therefore given the Board early notice of this development and a formal executive search process to identify and appoint a successor has commenced. This process will likely take between three to six months. Further announcements will be made when there are any material developments in this regard.

Director independence

Massmart has a unitary Board with a majority of non-Executive Directors. The majority of the non-Executive Directors are independent. The three Walmart-appointees are not considered independent. Our Lead Independent Director, Chris Seabrooke, chairs the Board meeting when a conflict of interest arises and/or when the Chairman, Kuseni Dlamini is unable to chair the meeting.

Annually, the Nominations Committee and the Board considers the independence of the Board members against the criteria set out in King IV and in line with its recommendations. In assessing each non-Executive Director’s independence, the review considers the following aspects:

  • Whether the Director had been employed in an Executive capacity in the Group during the preceding three financial years;
  • Whether the Director had been the designated external auditor or a member of the audit team of an external audit firm responsible for performing the statutory audit for Massmart;
  • Whether the Director is a representative of a major shareholder;
  • Whether the Director participates in a share incentive scheme offered by the Company;
  • Whether the Director is a significant or ongoing professional advisor to Massmart, other than as a member of the Board;
  • Whether the Director is a significant supplier and/or customer to Massmart;
  • Whether the proportion of that Director’s shareholding in Massmart (if any), or Director’s fees, represent a material part (10% or more) of their wealth or income;
  • Whether the Director is a significant provider of financial capital, or ongoing funding to the Company; or is an officer, employee or representative of such provider of financial capital or funding;
  • Whether the Director is an executive manager of another company which is a related party to the Company; or
  • Whether the Director is entitled to remuneration contingent on the performance of the Company.

In addition, the Board rigorously reviews non-Executive Directors with tenure periods exceeding nine years. In this case, the Committee considers whether that Director’s independence, judgement and contribution to the Board’s deliberation, when assessed objectively from the perspective of a reasonable and informed third party, could be unduly influenced or compromised, or may appear to be compromised, by this length. Chris Seabrooke, Lulu Gwagwa and Phumzile Langeni have all served for periods longer than nine years. Following the rigorous annual review, the Board has concluded that, in each instance, these Directors continue to be independent in character, judgement and contribution to the Board’s deliberation, particularly with reference to the aforementioned criteria which emanate from King IV.

Director appointment and rotation

At least one-third of the non-Executive Directors are required to retire every year and Massmart Executive Directors have elected to also retire on this basis. As a result, all Directors retire by rotation at least every three years and, if eligible and available, their names are submitted for re-election by the shareholders at the ensuing AGM. In addition, shareholders must ratify the initial appointment of each Director at the first AGM following that Director’s appointment. As a result of these requirements, at the 23 May 2019 AGM, Olufunke Ighodaro, Lindiwe Mthimunye and JP Suarez are nominated for election having been appointed during the reporting period and Kuseni Dlamini, Enrique Ostalé and Susan Muigai retire by rotation. Being eligible, they all offer themselves for election or re-election, as applicable. The Board confirms its support for the election or re-election of each Director and records that, save for Lindiwe and JP who joined the Board on 27 February 2019, the other four Directors were all evaluated as effective in their performance during the reporting period. The evaluation is a formal annual process conducted by the Group Company Secretary, Joe Ralebepa.

In filling vacant positions, the Board proactively seeks and appoints qualified previously disadvantaged individuals, in particular, African, Coloured and Indian (ACI) men and women, and men and women with disabilities, who reflect a diverse range of skills and backgrounds that represents the South African community to the greatest extent practical, including specifically gender, race and ethnic diversity.

When considering vacancies, the Board, by and through its nominating process, shall consider and shall be guided by the following:

  • The target of appointing 40% of women to open Independent non-Executive Director positions but not less than two in number; and/or request from its majority shareholder, Walmart, to consider recommending and supporting appointments of women to the Board in accordance with provisions of the gender diversity policy. In the event that at any time the Board does not constitute at least two female Directors, then the Board will endeavour to make an appointment of a woman from its Independent non-Executive Directors within 12 months. These targets are driven primarily by the Board’s diversity policies and during the reporting period, the targets prescribed in the policies have been met; and
  • The target of appointing up to 50% ACI candidates to open Executive and Independent non-Executive Director positions, provided that the Board shall endeavour to maintain at any time not less than three in number of ACI Directors on the Board in accordance with the provisions of the race diversity policy. For the avoidance of doubt the above mentioned target shall exclude all of Walmart nominee non-Executive Directors on the Board, and where necessary the Board shall request Walmart to consider supporting recommendations for the nomination and appointment of ACI candidates to the Board. In the event that the Board does not constitute at least three ACI Directors at any time, the Board will endeavour to make an appointment of an ACI candidate to its list of Independent non-Executive Directors within a period of 12 months. Pleasingly the prescribed targets were met during the reporting period.

Board process and evaluation

The Board meets four times a year and on an ad hoc basis should a particular issue demand its attention. In addition, the Board meets annually to formally consider and approve the strategies of the Massmart Divisions and Group.

Annually in October, the Nominations Committee facilitates a comprehensive Board self-assessment, covering the composition, duties, responsibilities, process and effectiveness of the Board, its sub-Committees, Directors and governance procedures. The assessment process includes an appraisal of the Chairman of the Board, Committee members, permanent invitees, CEO and CFO.

Assessments are approached in a constructive manner and provide valuable input that enhances the effectiveness of the Chairman, the Board and its Committees. Although no significant matters of concern were noted, the Board and its sub-Committees identify outcomes arising from the annual self-assessments and these serve as focus areas for the ensuing year.

Leadership roles and functions

The role of the Chairman is distinct and separate from that of the CEO and the separation of responsibilities is designed to ensure that no single person has unfettered decision-making powers and that appropriate balances of power and authority exist on the Board.

In accordance with the Board Charter, and as recommended by King IV, the Deputy Chairman of the Board, Chris Seabrooke, who is an Independent non-Executive Director, serves as the Lead Independent non-Executive Director.

The Board actively delegates its authority to the five sub-Committees and the Executive Committee in accordance with the scope and mandate prescribed in Committee respective Charters. The Board and sub-Committee Charters enable cross membership between the Board and its sub-Committees, which in turn requires coordinated timing of meetings; and avoidance or duplication or fragmented functioning in so far as possible and consequently, the Board achieves effective collaboration. There is a balanced distribution of power in respect of membership across Committees, so that no individual has the ability to dominate decision-making, and no undue reliance is placed on any individual. Additionally, the Board and Committee Charters confer at each Committee specific matters relevant to that Committee and work is allocated accordingly. The Board delegates its authority to the Massmart Executive Committee through its delegation of authority, which is reviewed annually by the Board.

The board has also adopted a stakeholder engagement protocol, which describes guidelines and scope of Walmart’s access to the Massmart business. A summary of this protocol is published on Massmart’s website under FAQ. 

Our Company Secretary

The Board is comfortable that it meets the King IV principle of having an arm’s length relationship with the Company Secretary, and confirms that the Company Secretary is not involved in any executive capacity in any of the main operating companies within the Group. Based on the outcome of a formal assessment of the Company Secretary, which was completed by the Chairman of the Board, the CEO, the CFO and the Chairman of the Audit Committee, the Board confirms that it has assessed and is satisfied with the qualifications, competence and expertise of the Company Secretary, the role which is held by Joe Ralebepa. The Board is further satisfied that there were arrangements in place for accessing the Company Secretary, which include, personal interface, electronic communication platforms and at quarterly Board and Committee meetings.

The Company Secretary assists the Board in fulfilling its functions and is empowered by the Board to perform his duties. The Company Secretary, directly or indirectly:

  • Assists the Chairman, the Nominations Committee, the CEO and CFO with the induction of new Directors;
  • Assists the Board with Director orientation, ongoing development and education;
  • Ensures that the Group complies with all legislation applicable/relevant to it;
  • Monitors the legal and regulatory environment and communicates new legislation, and any changes to existing legislation, relevant to the Board and the Divisions; and
  • Provides the Board with a central source of guidance and assistance.

 

Click here for complete and detailed CVs of the Board members.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Board actively delegates its authority to its five sub-Committees and the Executive Committee.