Our performance in 2009 - Sappi

72
Accountability
Responsibility
Corporate governance continued
Element/best practice Sappi application/comments King III report implications
The board should regularly review
processes and procedures to ensure
the effectiveness of the company’s
internal systems of control, so that its
decision-making capability and the
accuracy of its reporting are maintained
at a high level at all times
Risk management: the board must
identify key risk areas and monitor
effectiveness of the risk management
process
This review is primarily the role of the audit
committee; refer to the further disclosure on its
activities in this section
A management committee is responsible for the
implementation of risk management. The board
monitors the overall process of risk management
in conjunction with the audit committee
Induction and training of directors Induction programmes are tailored for each
individual director on appointment as a director
and continued individual training is available
thereafter
Terms should not exceed three years
but re-election by shareholders at
the AGM is allowed, if eligible
Skills, experience, background
and new ideas
The board has the right to appoint new directors
during the year and the appointments of such
directors require to be confirmed by shareholders
at the next annual general meeting (AGM) after
the appointment. Such directors are also
required to retire at that AGM and are eligible for
re-election to the board. A programme of
staggered rotation is in place whereby directors
retire by rotation at least every three years and
can be re-elected by shareholders at the AGM.
The nomination and governance committee
makes recommendations to the board as to
eligibility, taking into account past performance
and contribution. The board, in turn, makes
recommendations for re-election to the
shareholders at the AGM
All candidates for board positions are considered
and evaluated by the nomination and
governance committee prior to nomination and
appointment to the board. Factors considered for
new candidates and for existing board members
during annual evaluation, include background,
skills, experience, performance, as well as a
balance between continuity and the need for new
ideas. The evaluation of directors includes an
interview with the chairman and senior
independent, non-executive directors who
report back to the nomination and governance
committee as well as a self-assessment
based evaluation
A combined assurance model will be
formalised during 2010 with oversight by
the audit committee
A formally documented holistic review
(based on the combined assurance) of
internal financial controls will be performed
by the audit committee with their
conclusions reported to the board
and stakeholders
Risk management process is currently
being revised with oversight from the audit
committee and board. One of the items to
consider is the recommendation that a risk
committee be appointed by the board as a
standing committee. Sappi is of the view
that the current oversight by the audit
committee and board together with the
group risk management team sufficiently
addresses this aspect
Substantially adopted. Additional training for
directors regarding risk and IT governance
in 2010
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