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SUN INTERNATIONAL ANNUAL REPORT ’10
104
CORPORATE GOVERNANCE REPORT CONTINUED
The board charter stipulates that the operation of the board and the
executive responsibility for the running of the company’s business should
be two key and separate tasks and that there should be a clear division of
responsibilities at the head of the company to ensure a balance of power
and authority, ensuring that no individual or block of individuals has
unfettered powers of decision making or can dominate the board’s
decision taking.
Board chairman
The board is chaired by Mr MV Moosa, a non-executive director, appointed
as board chairman with effect from 1 July 2009. The board chairman is not
considered to be independent, as he is a shareholder and director of Lereko
Investments (Pty) Limited, which is a material shareholder of Dinokana
Investments (Pty) Limited, a 3.6% shareholder of the company.
Though the board chairman cannot be classified as independent in terms
of the governance criteria, the board is of the view that the board chairman
brings valuable expertise, experience and skill to the board and will exercise
independent judgement in relation to board matters. In addition, the board
has appointed a lead independent director to provide leadership and advice
to the board and the executive in the event that the board chairman’s
interest in the shareholding of the group represents a conflict of interest in
any matter or decision facing the board.
The chairman of the board is responsible, inter alia, for ensuring the
integrity and effectiveness of the board’s governance processes, and in
terms of the company’s articles of association, is subject to annual election
from amongst its members.
Lead independent director (LID)
The board charter requires the appointment of a LID in the event that
the board chairman does not meet the criteria for independence in terms
of the relevant governance criteria. Accordingly, Mr IN Matthews was
appointed as the LID with effect from 1 July 2009.
The LID provides leadership assistance at any board, committee or
shareholder meetings or in consultations with other directors or executives
in circumstances where the board chairman is conflicted. The LID also leads
and introduces discussion at board and committee meetings regarding the
performance and evaluation of the board chairman. The LID is subject to
annual election by the board.
Board composition
Sun International has a unitary board structure comprising a mix of
executive and non-executive directors. The majority of directors are
independent non-executive directors and the board presently comprises
of two executive and eleven non-executive directors, of whom eight
are considered independent in terms of the criteria contained in the
governance requirements.
The non-executive directors have the necessary skills, qualifications and
experience, as is evidenced from their CVs on pages 10 and 11, to provide
judgment independent of management on material board issues. The
composition of the board appears on pages 10 and 11.
Board appointments
Procedures for appointment to the board are formal and transparent and
a matter for the board as a whole. The board is assisted in this process by
the nomination committee. In making their recommendations, the
nomination committee applies the pre-requisites for board membership
as set out in the board charter.
The board has made two new appointments in the year under review and
welcomes the appointment of Ms ZBM Bassa and Ms BLM Makgabo-
Fiskerstrand with effect from 1 March 2010. Both of these directors are
independent non-executive directors.
Independence
The board, through the nomination committee, assessed the independence
of the independent non-executive directors against the criteria set out in
King II, King III, the JSE Listings Requirements and the Companies Act,
1973. The board was satisfied with its findings that three non-executive
directors are not considered independent and eight non-executive directors
are considered independent.
The independence assessment was conducted by way of written
evaluations that were reviewed by the nomination committee for
subsequent recommendations to the board.
The nomination committee conducted a rigorous independence assessment
of the two non-executive directors that have tenures of more than nine years
in duration on the board and concluded that Messrs IN Matthews and
MP Egan retain their independence in judgement notwithstanding their
tenure of service. The board concurred with the findings and is of the view
that the aforesaid non-executive directors bring valuable experience and
skill to the board and that they will continue to exercise their independent
judgement.
The independence evaluation will be conducted and reported on an
annual basis.
Chief executive and delegation of authority
Mr DC Coutts-Trotter was appointed as the chief executive on 1 July 2006.
The board’s governance and management functions are linked through
the chief executive, who is tasked with the running of the business and
the implementation of the policies and strategies adopted by the board.
All board authority conferred on management is delegated through the
chief executive and the accountability of management is considered to be
the authority and the accountability of the chief executive. Appropriate
and uniform controls and processes are in place within the company
and the group and are communicated to management to ensure the
monitoring of the application of levels of authority throughout the group
particularly in the areas of capital expenditure, contracts, procurement and
human resources.
Board authority is delegated by way of written board resolutions. Levels of
authority and materiality have been established and are reviewed annually
by the board and the remuneration committee.