Annual Report 2012 - Sentula

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Sentula Mining Limited Integrated Annual Report 2012Governance reports24The governance report section includes the following:• Corporate governance report – page 24• Risk management report – page 33• IT report – page 38• Remuneration report – page 38Corporate governance reportIntroductionThe Board of Directors of Sentula and seniormanagement are committed to the highest standardsof corporate governance and take pride in their highmoral and ethical business standards, accompaniedby sound and transparent business practices.As corporate governance is constantly evolving,Sentula continually focuses on seeking ways toimprove on its corporate governance standards.The Board is committed to and applies the principlescontained in King III as more fully disclosed on pages41 to 44, and in doing so, continuously strives toachieve corporate governance best practice.The Board, assisted by the Audit and Risk Committee,and the newly formed Social and Ethics Committee isresponsible for overall corporate governance andmonitors compliance with all applicable laws, rules,codes, standards and the Listings Requirements, andensures ongoing improvement in the Group’sadherence to the principles set out in King III. TheCompany Secretary is responsible for assisting theBoard in monitoring compliance and the day-to-daymanagement of corporate governance.Board of DirectorsStructure and role of the BoardThe Board has a unitary structure and comprises ninemembers, the majority of whom are independentnon-executive directors. The Board considers all ofthe non-executive directors to be independent.Determination of independence is guided by King III,the Companies Act, the Listings Requirements andcorporate best practice. The profiles of the membersof the Board are set out on pages 9 to 11 of thisIntegrated Annual Report.The roles of the non-executive Chairman and theChief Executive Officer are separated in accordancewith the Board’s policy of division of responsibilities.This ensures a balance of authority and precludes anyone director from exercising unfettered powers ofdecision-making. In addition, the Board complies withthe requirements of King III insofar as the compositionof its sub-committees is concerned.A Board Charter, which is reviewed annually, has beenadopted to guide the Board in governance issues andsets a framework within which the Board functions.The Board Charter sets out the Board’s duties andobligations, which include inter alia to:• act as the focal point for, and custodian of, corporategovernance by arranging its relationship withmanagement, shareholders and other stakeholdersof the Company along sound corporate governanceprinciples;• appreciate that strategy, risk, performance andsustainability are inseparable and to give effect tothis by:––contributing to and approving the strategy;––satisfying itself that the strategy and businessplans do not give rise to risks that have not beenthoroughly assessed by management;––identifying key performance and risk areas;––ensuring that the strategy will result in sustainableoutcomes; and––considering sustainability as a businessopportunity that guides strategy formulation;• provide effective leadership on an ethicalfoundation;• ensure that the Company is and is seen to be aresponsible corporate citizen by having regard notonly to the financial aspects of the business of theCompany but also to the impact that businessoperations have on the environment and the societywithin which it operates;• ensure that the Company’s ethics are managedeffectively;• ensure that the Company has an effective andindependent Audit and Risk Committee;• be responsible for the governance of risk;• be responsible for information technology (IT)governance;• ensure that the Company complies with applicablelaws and considers adherence to non-binding rulesand standards;• ensure that there is an effective risk-based internalaudit;• appreciate that stakeholders’ perceptions affect theCompany’s reputation;
Sentula Mining Limited Integrated Annual Report 201225• ensure the integrity of the Company’s IntegratedAnnual Report;• act in the best interests of the Company at all timesby ensuring that individual directors:––exercise their fiduciary duties with the necessarycare, skill and diligence;––adhere to legal standards of conduct;––practice objective judgement with regard to theaffairs of the Company independently frommanagement, but with sufficient information toenable a proper and objective assessment;––are permitted to take independent advice inconnection with their duties following an agreedprocedure;––immediately disclose real or perceived conflictsto the Board and deal with them accordingly; and––deal in securities only in accordance with thepolicy adopted by the Board;• commence business rescue proceedings as soon asthe Company is financially distressed;• elect a Chairman of the Board that is a nonexecutivedirector; and• appoint and evaluate the performance of the ChiefExecutive Officer.The Board Charter requires that non-executivedirectors have unfettered access to management atany time, and all directors are entitled, at theCompany’s expense, to seek independent professionaladvice on any matters pertaining to the Group wherethey deem this to be necessary, and are obliged toseek such advice in matters where they lack sufficientexpertise to make an informed decision. Whenseeking independent advice, the directors mustinform the Company Secretary and if it is relevant toSentula or its operations, the Company Secretary willdisclose the information to the Chief Executive Officerand the Board.Executive directors are appointed by the Board tooversee the day-to-day running of the Company.Executive directors are held accountable throughregular reporting to the Board, and their performanceis measured against predetermined criteria.Non-executive directors provide the Board withadvice and experience that is independent ofmanagement and the executive. The presence ofindependent non-executive directors on the Board,and the critical role they play as Board representativeson key committees, ensures that the Company’sinterests are served by impartial views that areseparate from those of management and shareholders.As required by King III, the following evaluations weredone in August 2012:• A self-evaluation by the Board and a self-evaluationby the Audit and Risk Committee, the results ofwhich were discussed by the Board;• An evaluation of individual director performance bythe Chairman; and• An evaluation of the Chairman by the rest of theBoard.Areas of improvement were noted and will beaddressed during the coming year.For the financial year ended 31 March 2012 and subsequent thereto, the Board composition and resignation ofdirectors are as follows:Director Appointed ResignationHugh Stoyell (Independent non-executive) 30/09/2005 n/aRobin Berry (Executive CEO) 02/01/2007 n/aJonathan Best (Independent non-executive Chairman) 01/07/2007 n/aDeon Louw (Executive CFO) 01/08/2007 n/aAndy Kawa (Independent non-executive) 11/09/2008 02/06/2011Pat Modisane (Executive Director Transformation and HR) 01/10/2008 n/aKholeka Mzondeki (Independent non-executive) 01/07/2010 n/aCor van Zyl (Independent non-executive and Chairmanof the Audit and Risk Committee) 01/07/2010 n/aRain Zihlangu (Independent non-executive) 01/07/2010 n/aRalph Patmore (Independent non-executive) 25/01/2012 n/a
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