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AfroCentric INTEGRATED ANNUAL REPORT 2016
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CORPORATE GOVERNANCE REPORT (continued)
APPLICATION OF AND APPROACH OF THE
KING III PRINCIPLES
The Directors confirm that the Group has, in all material
respects, applied the recommendations of King III.
As previously reported, where compliance with the
recommendations is not adhered, the Directors adhered to
the “apply or explain” principle on which King III is based.
Remedial action for non-application is being addressed and
continuous improvement plans will ensure that the Group
strives towards full compliance of the King III principles.
Principle 2.16 states that the Board should elect a
Chairperson who is an Independent Non-executive
Director. The Board Chairperson is a Non-executive
Director who is not independent. Despite this
classification, the Chairperson applies independence of
mind in all matters under discussion. A lead Independent
Non-executive Director, Mr GL Napier, serves as liaison
among Board members and ensures open and transparent
Board relations in line with King III principle 2.16.3.
Principle 2.18 recommends that the Board should
comprise a majority of Non-executive Directors and
that the majority of Non-executive Directors should be
independent. In line with the recommendation of King
III, AfroCentric has a unitary Board structure consisting
of 15 members as at the reporting date. There are three
Executive Directors and twelve Non-executive Directors,
of which six are independent.
An independent legal opinion was received in July 2015
on the status of the Directors. Mr MI Sacks and
Mr JM Kahn were classified as Independent Non-executive
Directors. This was included in the 2015 corporate
governance report. The Board terms of reference/charter
and Memorandum of Incorporation (“MOI”) ensure that
proper voting principles and processes are employed to
enable a balance of power.
Principle 9.3 states that sustainability reporting should
be independently assured. The external auditors
PricewaterhouseCoopers Inc. provided assurance on the
Group Annual Financial Statements.
A schedule detailing the Group’s application of each
King III principle, as required in terms of the JSE Listings
Requirements, is available on the Group’s website.
COMPANY SECRETARY
The Board selects and appoints the Group Company
Secretary and recognises this person’s pivotal role in
entrenching good corporate governance. All Directors have
access to the advice and services of the Company Secretary.
The Board has an established procedure for Directors to
obtain independent professional advice at the Group’s cost.
The Group Company Secretary assists Directors, Board
Committees and their members in obtaining professional
advice.
The Company Secretary provides dedicated support to
the Board, in particular the Non-executive Directors, and
is a point of reference and support for all Directors. The
Company Secretary consults regularly with the Directors
to ensure that they receive any necessary information.
With the Board Chairperson, the Company Secretary will
regularly review the Board’s and AfroCentric’s governance
processes with a view to ensuring they are fit for purpose
and recommend or develop initiatives to strengthen the
governance of AfroCentric.
As stipulated in the JSE Listings Requirements, a detailed
assessment was conducted by the Board Chairperson, who is
satisfied with the competence, qualifications and experience
of the Company Secretary. Ms S Lutchan does not serve as
a Director of the Board and the assessment confirmed her
arm’s length relationship.
BOARD OF DIRECTORS
FUNCTIONING OF THE BOARD
The Directors aim to integrate growth and efficiency with
governance and ethics. The Board of Directors, guided by
the mission statement, formulates strategies and policies
which focus on optimising value for stakeholders, including
consumers, shareholders and the society at large.
The Board exercises leadership and judgement in directing
the Group to achieve sustainable growth and to act in the
best interests of the business and its stakeholders. The Board
is responsible to shareholders for creating and delivering
sustainable shareholder value through the management
of the Group’s businesses, and therefore determines the
strategic objectives and policies of the Group to deliver such
long-term value. In providing overall strategic direction,
the Board ensures that management strikes an appropriate
balance between promoting long-term growth and delivering
short-term objectives.
In the Board demonstrating ethical leadership and
promoting the Company’s vision, values, purpose, culture
and behaviour, Directors act in a way they consider in good
faith to promote the success of the Company for the benefit
of the shareholders as a whole.
Formal terms of reference/charter define the roles and
responsibilities of the Board. The Board adheres to the
fiduciary duties and duty of skill and care codified in the
Companies Act. This is reflected in the conflicts of interest
policy, which also applies to Directors. Declarations of
interest are confirmed at each Board and Committee
meeting and are recorded in the minutes.
BOARD MEETINGS
The Board had four scheduled meetings during the year
under review and two special meetings, in addition to
the Annual General Meeting (“AGM”) and Board strategy
session. Non-executive Directors have unfettered access to