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Issue arising Corrective action required/implemented
A formal board charter setting out the board’s The board has approved a charter
responsibilities should be developed
The board should adopt a formal procedure for induction A formal induction programme was designed and is being presented
and training of directors to ensure that directors are aware to newly appointed directors. Key areas covered, amongst others, are:
of their statutory and fiduciary duties, obligations and Overview of the ABIL businesses and a visit of main business areas
potential liabilities A review of ABIL’s organisational structure and presentations by the
MDs of each business unit covering key strategies, highlighting
major risks and profitability and performance indicators
Previous minutes, relevant charters and delegations of authority
The composition and charters of the board committees The board approved a new governance structure and relevant charters
should be reviewed on an annual basis during 2003
The board should develop a policy on executive The Group Remuneration and Transformation Committee has
remuneration supported by a statement of
remuneration philosophy
approved a remuneration philosophy for the group
Non-executive directors should have a forum to meet All non-executive directors are members of the Directors’ Affairs
separately on a regular basis in addition to scheduled
board meetings
Committee that provides a forum for them to meet separately
2. For 2003, the corporate governance
objective of the board was to ensure that
the business of ABIL rendered
acceptable returns for shareholders and
was conducted in a way that was
regarded as displaying the following
characteristics of good corporate
governance:
(a) Discipline
(b) Transparency
(c) Independence
(d) Accountability
(e) Responsibility
(f) Fairness/balance; and
(g) Social responsibility
3. Arising out of the above reviews the
board identified the following key areas
of focus from a corporate governance
perspective for the year ahead:
(a) To continue to maintain compliance
with good corporate principles as
contained in the Banks Act and
King II;
(b) To improve the strategic focus of
the board (as it is currently more
operationally focused);
(c) To focus on corporate social
responsibility and integrated
sustainability matters at a board
level;
(d) To review the composition of the
board to determine if it is
appropriate to meet the business
objectives of the organisation.
Comparison with the
findings of the Myburgh
Commission
Corporate governance practices were
also benchmarked against the report
released by Advocate Myburgh regarding
the corporate governance reviews
conducted for the larger banks. The
board is of the opinion that ABIL
substantially complies with the findings
and recommendations of the commission.
Compliance with the
JSE Securities Exchange
Listings Requirements
The new JSE Listings Requirements were
released during 2003. Although most of
the significant amendments came into
effect on 1 September 2003, some
transitional amendments relating to
corporate governance come into effect
on 1 January 2004. The board is confident
that ABIL will be fully compliant with all
the requirements by 1 January 2004.
The board and its
functioning
Structure
ABIL has a unitary board structure, which
forms the focal point of the system of
corporate governance of the
organisation. The composition of the
board is compliant with good corporate
governance practices. The role of the
chairman and CEO are segregated and a
non-executive director acts as chairman.
The board is of the opinion that there is
an appropriate balance between
executive and non-executive directors
on the board with all non-executive
directors, except two, being
independent directors. The composition
of the board is reflective of the
demographic and gender diversity of
South Africa.
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African Bank Investments Limited