2008 Annual report - Sappi

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Corporate governance We are committed to the highest standards of corporate governance and continue to seek areas of improvement by measuring ourselves against international best practice. The group endorses the Code of Corporate Practices and Conduct as contained in the South African King II Report issued in 2002, and continues to apply the principles incorporated therein. The group maintains its primary listing on the JSE Limited as well as listings on the New York and London Stock Exchanges. The group complies in all material aspects with the regulations and codes of these exchanges as they apply to Sappi. Summary The following table provides a summary of how we have implemented corporate governance. Discussed are the seven characteristics of good governance (King II report) and certain selected international best practices (from the King II report and other sources). Full disclosure is provided on the areas where the board has applied these standards differently. The board believes that in certain circumstances this is justified when this is in the best interest of the group and the principles of good governance are balanced. Element/best practice Sappi application/comments Discipline Clear and comprehensive board charter approved by the board In terms of the board charter, the board should meet five times per year (at least once per quarter). Changes to the governance structure and compliance thereto subject to discussion at Annual General Meeting The charter sets out powers, responsibilities, functions, delegation of authority, and the areas of authority expressly reserved for the board. The current charter was reviewed in 2008 as part of our continuous improvement efforts. A copy is available on the company website www.sappi.com The board met eight times during the year The financial statements, including our report on Corporate Governance, as well as the appointment of directors, their remuneration and resolutions related to issuance of and re-purchase of shares are submitted to the Annual General Meeting of shareholders for approval. Refer to page 191 for the notice to shareholders Transparency Clear disclosure of strategies, objectives and corporate governance. A summary of the Sappi Limited strategy and how we measure our progress is available in the annual report and on the company website www.sappi.com. Both the progress against these objectives as well as our corporate governance are fully disclosed in this annual report. A disclosure committee comprising management from various fields of expertise is responsible for reviewing financial reporting disclosures Fees for non-executive directors Refer to page 191 for the notice to shareholders which sets out the proposed fees should be submitted to the for 2008/2009 shareholders in general meeting for approval Full disclosure of directors’ For a full disclosure refer to note 34 ‘Directors Remuneration’. Information conremuneration and additional cerning the management incentive scheme and share incentive scheme can be information concerning incentive found under the compensation report on pages 70 to 71 schemes for senior management 62
sappi Element/best practice Stakeholder communication Sappi application/comments The investor relations department as well as the corporate communications department maintain regular contact with relevant stakeholders and utilises the company website www.sappi.com as a means of distributing relevant information. Stakeholders can also contact Sappi directly via a contact form on the company website. Refer to the sustainability report on pages 6 to 9 for further description of our communication efforts Independence Given the strategic operational role of the chief executive officer, this function should be separate from that of the chairperson of the board. Audit committee should consist of independent board members. Remuneration committee should consist of mainly non-executive members Majority of independent board members The chairperson should preferably be an independent non-executive director The role of chief executive officer is held by Mr Ralph Boëttger. This role is separate separate from the chairperson of the board The audit committee and the compensation committee both consist entirely of independent non-executive directors 11 of the 13 board members are independent The chairperson of the board is Dr Danie Cronjé, an independent, non-executive director. Dr Cronjé took over the chairperson responsibilities following Mr Eugene van As’ retirement from the board at the AGM in March 2008 Accountability Effective subcommittees to assist the board To manage its workload, the board has appointed sub-committees with the specific objective of evaluating key areas of business performance, in particular governance, on a more detailed basis and to report to the board regularly on any issues that might arise although it is understood that delegation of responsibilities to sub-committees does not relieve the board of its ultimate responsibility for the affairs of the company. The following board committees have been appointed to deal with specific subjects: • Nomination and governance committee • Compensation committee • Audit committee • Human resources committee In addition, a number of management committees have been formed to assist the chief executive officer in the discharge of his responsibilities: • Sustainability council • Executive management committee • Disclosure committee • Treasury committee • Technical committees • Group risk management team Performance related elements should constitute a substantial portion of the total remuneration policy A significant portion of the remuneration of the executive directors and senior management consists of a performance bonus and awards in terms of the Sappi Limited Performance Share Incentive Scheme to align their objectives with those of stakeholders. Refer to pages 174 to 180 for details of these incentive schemes // 2008 Annual report 63
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annual report 2008
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sappi Our report in overview In pro
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sappi Our performance The group’s
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sappi Target Target Net debt to tot
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sappi Our score on the DJSI World D
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sappi People continued Our commitme
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Page 42 and 43: Risk management Our top risks These
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Page 46 and 47: Chief financial officer’s report
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Page 62 and 63: Share statistics at September 2008
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Page 72 and 73: Compensation report Compensation co
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Page 76 and 77: Directors’ approval The directors
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Page 80 and 81: Group income statement for the year
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Condensed Sappi Limited company inc
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Notes to the condensed Sappi Limite
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Glossary General definitions bleach
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Glossary // continued Non-GAAP fina
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Notice to shareholders // continued
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Notice to shareholders // continued
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Shareholder’s diary Annual genera
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Notes to proxy The form of proxy mu
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Notes 1. To be effective, this form
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Notes 1. To be effective, this form
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www.sappi.com
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2008 Annual report - Sappi

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