Telkom AR front.qxp

42
Telkom Annual Report 2009
Corporate governance
The Board takes overall responsibility for the Group and its role is to exercise leadership
and judgement in directing it to achieve continued prosperity and to act in the best
interests of stakeholders.
Compliance
The Telkom Board subscribes to and is fully
committed to sound business principles and
practices of integrity and accountability,
and values of good corporate governance
as espoused in the Code of Corporate
Practices and Conduct of King II (the
Code). In so doing, the directors recognise
the need to conduct the enterprise in
accordance with best corporate practices.
The Board is of the view that Telkom
complies in all material respects to the
principles of the Code. While it
acknowledges the importance of good
governance, the Board is aware that
Telkom does not strictly comply with certain
principles set out in the Code. These areas
of non-compliance stem mainly from certain
provisions in Telkom’s articles of
association. Most of the areas of noncompliance
will be resolved by no later
than March 2011, when the provisions of
Telkom’s articles of association resulting in
non-compliance with the Code fall away or
earlier if the shareholding of a significant
shareholder falls below certain stipulated
levels.
Chairman and Board of directors
The Board takes overall responsibility for
the company and its role is to exercise
leadership and sound judgement in
directing it to achieve continued prosperity
and to act in the best interests of
stakeholders.
Telkom has a unitary Board comprising 12
directors. In accordance with Telkom’s
articles of association, five non-executives
including the Chairman have been
appointed by the government of South
Africa (the Class A shareholder) and one
non-executive appointed by Black Ginger
33 (the Class B shareholder).
There are four other non-executive directors
who are appointed at the company’s
annual general meeting and are
considered to be independent, as set out in
King II and the JSE Listings Requirements.
The executive directors on the Board are
the Chief Executive Officer and the Chief
Financial Officer. In line with best practice,
the roles of the Chairman and Chief
Executive Officer have been separated.
The Board is led by Ms ST Arnold, the
Chairman, while operational management
of the Group is the responsibility of
Mr RJ September, Chief Executive Officer.
In terms of the articles of association, the
non-executive directors appointed by the
Class A shareholder have a fixed term of
three years and may be re-elected to the
Board by those shareholders. The
Chairman has a term of one year and is reelected
as Chairman for the ensuing year
by the Class A shareholder. The four
independent non-executive directors are
subject to retirement by rotation and reelection
by shareholders at least every
three years in accordance with the articles
of association and JSE Listings
Requirements.
The holders of the Class A and B ordinary
shares are the government of South Africa
and Black Ginger respectively. The only
significant shareholder is the Class A
shareholder who currently holds 39.8% of
the issued ordinary shares in the company.
The significant shareholder has certain
Board-reserved matters which are detailed
in the company’s articles of association.
Pursuant to the articles of association, whilst
the government is a significant shareholder,
neither Telkom nor any of its subsidiaries
may take action with respect to certain
reserved matters unless authorised by the
Board. In addition, the authorising
resolution of the Board must have received
the affirmative vote of at least one of the
directors appointed by the government.