Our Nominations Committee annually reviews the independence of Board members against the criteria set out in King IV as part of its facilitation of a comprehensive Board self-assessment. In addition to this, an external evaluation was conducted regarding the Board’s effectiveness to assist in identifying and addressing opportunities for improvement. This review considered the balance of skills, expertise and competencies of the Board.
The Board of Massmart and its Executive team work together to create value for all our stakeholders by delivering on our purpose to be the most trusted wholesale and retail group in sub-Saharan Africa, ensuring our strategy and business model are fit for purpose in the short, medium and long term and that we are able to adapt rapidly to changing market conditions and ensure the sustainability of our business. We do so by constantly monitoring the macro environment and its potential impact on our business; our risks and opportunities; the performance of our business; and our performance in terms of society, the environment and achieving the benefits of practicing good governance.
The purpose of our approach to governance
Our approach to governance, which is an essential part of our value creation process, is integrated into our Board-approved strategies, policies, standards, practices and procedures and is designed to support the achievement of a high standard of corporate governance. It supports the delivery of our purpose of being the most trusted wholesale and retail group in sub-Saharan Africa by enhancing accountability and transparency and facilitating effective performance, risk and opportunity management and compliance with all applicable legislation and regulation.
Our combined assurance model, which is an integral part of our governance structures, enables an effective internal environment that supports the integrity of information used for internal decision-making by management, the Board and its Committees and supports the integrity of our integrated report. It achieves this through the incorporation and optimisation of all assurance services and functions.
It also ensures that we act in the best interests of our stakeholders, comply with applicable laws and regulations and are able to adapt quickly to changes in our regulatory environment.
The Group’s risk strategy is established through deliberation with Massmart’s Executive Committee. To ensure Massmart maintains a balance between its efforts to provide stakeholder rewards as a responsible corporate citizen, the Group’s risk tolerance is considered and balanced against our drive towards achieving our strategic objectives and realising identified opportunities emanating from the assessment of the Group’s risks and opportunities. The Board has delegated the responsibility of overseeing the Group’s risk management programme to the Risk Committee. Details of our management and governance of risk can be found here.
Governance structures and delegation that achieves effective control and a clear balance of power
Our governance framework positions our Board as the custodian of governance in Massmart and provides it with effective control of the business. Its role and responsibilities are set out in its Charter and Memorandum of Incorporation (MOI), which also set out the shareholders’ delegation of authority to the Board, which has a formal schedule of matters reserved for its consideration and decision. (see the governance section of our website).
Through the appointment of strong, independent Directors and the separation of a clear definition of the roles and responsibilities of the Chairman and Chief Executive Officer, Massmart has established a clear balance of power and authority at Board level. The Chief Executive Officer in turn delegates authority to his Executive team, who are provided with clear definitions of their responsibilities and accountabilities. Their performance is measured against agreed key performance indicators, which are also used to determine their compensation (see the remuneration report).
The Nominations Committee is mandated by the Board to monitor Executive level talent management and succession planning.
Engaging with the business on strategy
The Board, which has developed an understanding of the business through engagement with management, sets the strategic direction of Massmart. It meets annually with Executive management to consider and approve the strategies of the Massmart divisions and Group.
Ensuring the organisation is equipped to achieve its strategic objectives
By mandating the Risk Committee to review, monitor and provide independent oversight over the Group’s risks and opportunities management and its application of the Group’s information technology governance framework to support value creation, the Board’s approach to governance facilitates the organisation’s achievement of its strategic objectives.
The Board addresses the challenging task in the current environment of governing ethics in a manner that supports the establishment of an ethical culture in Massmart. It mandates its Audit, Risk and Social and Ethics Committees with responsibility for the monitoring and management of ethics, fraud and corruption in the Group. In addition the Executive Committee has established a management sub-Committee, the Ethics and Compliance Committee, to oversee the Group’s ethics and compliance programme. The Committee meets six times a year to review Group ethics and compliance and to consider legal and regulatory developments and risks impacting the business. It identifies areas requiring specific focus by the Massmart compliance team. It also receives feedback from Massmart’s Internal Audit Services.
Responsible corporate citizenship
The Board ensures that Massmart meets, and where possible exceeds, its obligations and responsibilities to society and the natural environment on which society depends, and contributes to the sustainable development of the communities in which we operate. We believe that being socially and environmentally responsible and committed to practising good governance is fundamental to fulfiling our purpose of being the most trusted wholesale and retail group in sub-Saharan Africa and creating long-term stakeholder value. As a responsible corporate, we contribute towards the achievement of 14 of the United Nations (UN) Sustainable Development Goals (SDGs), where we believe we can have the most meaningful impact.
The Board also ensures that Massmart assesses its standing in terms of the United Nations Global Compact (UNGC) Principles, which includes meeting its integrated reporting commitments.
In this regard, through the Remuneration Committee, the Board ensures that the Group remunerates fairly and responsibly.
We also have a Board diversity policy in place, which includes gender diversity targets.
(See the governance section of our website).
Adopting a stakeholder-inclusive approach
By effectively governing Massmart through its oversight and monitoring of performance, identifying stakeholders through engagement, and taking into consideration our stakeholders’ interests, needs and expectations, our Board and Executive management contribute value to both the business and its stakeholders. See Our stakeholder relationships.
Evaluating the Board’s performance and the performance of its members in terms of applying the King IV principles and outcomes provides the Massmart Board with a mechanism with which to assess its governance performance and make improvements if necessary. In October of each year the Nominations Committee facilitates a comprehensive self-assessment of the Board and its Committees, which covers their composition, duties, responsibilities, processes and effectiveness. This process also includes an appraisal of the Chairman, individual Board members, permanent invitees, the Chief Executive Officer and the Chief Financial Officer.
The Group Company Secretary also facilitates an annual evaluation of the performance and effectiveness of the Chairman, the Board and its Committees and individual members by means of an internal evaluation process. In 2019 a formal evaluation was also conducted by an independent external service provider.
These assessments provide valuable input, which is used to enhance the effectiveness of our Board and its members and serves as focus areas in the ensuing year.
Executive performance is evaluated against agreed metrics set out in the Remuneration report.