Board of directors

The board comprises nine independent non-executive directors, five non-executive directors, eight executive directors and one alternate, non-executive director. In line with King III recommendations, we have nominated a Lead Independent Director, the appointment of which will be ratified by the board in November 2011 and the board confirms the independence of the long-serving directors following a review of their independence. The roles of chairman and chief executive are distinct.

Executive directors implement strategies and operational decisions. Non-executive directors provide an independent perspective and complement the skills and experience of executive directors. They objectively assess strategy, budgets, performance, resources, transformation, diversity, employment equity and standards of conduct. They also contribute to strategy formulation and decision making. The board and committees evaluation process of annual self-assessment continues with no significant changes to report, but a review of this process against best practice is planned.

Bidvest board has appointed a subcommittee structure, empowered with the tasks required to govern an organisation as diverse, geographically spread and of the size that Bidvest is. These committees include Group audit committee, Group risk and sustainability committee, transformation social and ethics committee (transformation committee); remuneration committee, nomination committee and acquisitions committee. Charters and terms of reference for the board and subcommittees have been updated in line with King III and the new Companies Act 2008.

Audit committee

The audit committee has an updated charter defining their responsibilities, including but not limited to review of the financial information, assessment of significant statutory and financial risks, scope and function of internal audit, review of internal and external audit reports and the appointment of external auditors.

Divisional committee structure

The newly restructured Bidvest South Africa has spread the burden of responsibility carried by the Group board and Group board committees down into the new divisional structures where divisional committee structures exist that are able to focus on the needs and strategies within the division itself. Each division has its own audit committee and risk and sustainability committee operating under a delegated authority of the Group committees. This is consolidated and reported to a Group level where the board is able to focus on the high-risk, high-impact areas.

Social and ethics committee

In line with the Companies Act, 2008 (as amended) and King III, Bidvest has established a social and ethics committee using the previously constituted transformation committee as a base structure. Responsibilities of this committee have been expanded to be in line with the legislated requirements, building on the existing transformation committee terms of reference and a review of the membership constitution.

Remuneration

Our remuneration philosophy promotes the Group’s entrepreneurial culture within a decentralised environment with the aim of achieving sustainable growth within all businesses. Our philosophy emphasises the fundamental value of our people and their role in attaining this objective. Deliberations of the remuneration committee are informed by performance reviews – from individual, divisional and Group perspectives.

Delivery-specific short-term incentives are viewed as strong drivers of performance. A significant portion of top management’s reward is variable and is determined by the achievement of realistic profit targets together with an individual’s personal contribution to the growth and development of their immediate business and the wider Group.

Long-term incentives align the objectives of management and shareholders for a sustained period.

Company Secretariat

The board is assisted by a suitably qualified Company Secretary, in line with legislated requirements. All directors have access to the advice and services of the Company Secretariat, who are responsible for ensuring the Board complies with all applicable procedures, statutes and regulations.

The board has raised the profile of the risk committees, a ‘hearts and minds’ campaign is underway within the Group, selling the vision where Bidvest intends to take risk management. Management is accountable to the board for implementing and monitoring the processes of risk management and integrating this into day-to-day activities. We have integrated King III recommendations and committed dedicated personnel to the risk process. Renewed efforts are being put into revitalising the risk and sustainability management plans and communicating these to a Group level. Progress is monitored by the Group risk and sustainability committee, and the outcome will provide a clarified path for our risk management process.

Information technology governance

Bidvest has approved an IT governance Framework in order to “support the effective and efficient management of information resources (eg people, funding and information) to facilitate the achievement of the organisations objectives”. The Group has adopted the COBiT standards recognised worldwide as best practice. The framework supports the principles and provides guidance to the Group in determining maturity and application of these principles as appropriate.

Sustainability

Progress can only be credibly reported if indicators are identified, monitored, measured and recorded. A new database tool implemented towards year-end represents a major step towards more powerful data management, monitoring and reporting. A major focus will be to create defined targets for sustainability performance.

Combined assurance

Group governance, risk and compliance framework is effectively co-ordinating the efforts of management, internal and independent assurance providers, increasing their collaboration and developing a shared and holistic view of the group’s risk profile. This model provides an outline for an annual assurance plan that reduces duplication in audit processes while preventing assurance providers from overlooking key controls.

Internal audit

In line with King III, internal audit is creating a programme for quality assurance and improvement that is informed by strategy and risk. In this, the role of internal audit is to challenge the issues identified by the business at unit and divisional level, and the way these are governed and controlled.

Divisionally there are quarterly audit committee meetings, chaired by independent non-executive directors. These committees approve and monitor the progress of the internal audit function within the division. Each divisional internal audit manager has a direct line of contact with the independent divisional audit committee chair to raise any concerns or issues as and when required.

External audit

The Group uses external auditors in combination with the internal audit function to achieve combined assurance. Management encourages unrestricted consultation between internal and external auditors.