2012 Integrated report - Sappi

encourage
Audit committee
The audit committee consists of five independent, non-executive
directors and assists the board in discharging its duties relating
to the:
> safeguarding and efficient use of assets;
> oversight of the risk management function;
> operation of adequate systems and control processes;
> reviewing financial information and the preparing of accurate
financial reports in compliance with applicable regulations
and accounting standards;
> reviewing sustainability information included in the annual
integrated report;
> reviewing compliance with the group’s code of ethics and
external regulatory requirements;
> oversight of the external auditors’ qualifications, experience
and performance;
> oversight of the performance of the internal audit function;
and
> oversight of non-financial risks and controls, as well as
IT governance, through a combined assurance model.
The audit committee confirms that it has received and
considered sufficient and relevant information to fulfil its duties,
as set out in the audit committee report on page 100.
The external and internal auditors attended audit committee
meetings and had unrestricted access to the committee and its
chairman. The external and internal auditors met privately with
the audit committee during 2012.
Regional audit committees exist in the three major regions and
are chaired by independent non-executive directors. These
committees have a mandate from the group’s audit committee,
to which they report on a regular basis. The regional committees
each met four times during 2012.
Dr D Konar has been designated as the audit committee financial
expert as required by the Sarbanes-Oxley Act of 2002, and
attended the annual general meeting in 2012.
Nomination and governance committee
The nomination and governance committee consists of four
independent directors and considers the leadership requirements
of the company including a succession plan for the board.
The committee identifies and nominates suitable candidates
for appointment to the board, for board and shareholders’
approval. The committee considers the independence of
candidates as well as directors. The committee makes
recommendations on corporate governance practices and
disclosures, and reviews compliance with corporate governance
requirements. The committee has oversight of appraising the
performance of the board and all the board committees. The
results of this process and recommended improvements are
communicated to the chairman of each committee and the
board. Following the 2011 appraisal process which was
conducted by an external evaluator, the 2012 performance
assessments were conducted internally. As with the 2011
process, the 2012 results indicated that the board and all the
board committees functioned well and that there were no major
shortcomings.
Human resources and compensation
committee
The human resources and compensation committee consists
of four independent directors. The responsibilities of the human
resources and compensation committee are, among others,
to determine the group’s human resource policy and strategy,
assist with the hiring and setting of terms and conditions of
employment of executives, the approval of retirement policies
and succession planning for the CEO and management. The
committee ensures that the compensation philosophy and
practices of the group are aligned to its strategy and
performance goals. It reviews and agrees the various
compensation programmes, in particular the compensation of
executive directors and senior executives as well as employee
benefits. It also reviews and agrees executive proposals on
the compensation of non-executive directors for approval by
the board and ultimately by shareholders.
Regional human resources and compensation committees meet
on an ad-hoc basis to execute HR strategy and implement policy
at a regional level.
Social, ethics, transformation
and sustainability committee
The social, ethics, transformation and sustainability (SETS)
committee comprises three independent non-executive directors,
a non-executive director and the CEO. Other executive and group
management committee members attend SETS committee
meetings via invitation. Its mandate is to oversee the group’s
sustainability strategies, ethics management, good corporate
citizenship, labour and employment as well as its contribution to
social and economic development and, with regards to the
group’s South African subsidiaries, the strategic business priority
transformation.
Regional sustainability councils provide strategic and operational
support to the SETS committee in dealing with day-to-day
sustainability issues and helping to develop and entrench related
initiatives in the business.
For more information on sustainability at Sappi refer to
pages 16 to 29 for a summary of the group’s initiatives and
www.sappi.com.
sappi Integrated Report 2012 69