Governance

Doing the right thing even when no one else is looking

Bidvest has a deeply entrenched functional governance structure that places significant reliance on the ethical behaviour of all employees. This places a very high hurdle of responsibility and accountability on everyone. Rather than having many policies and manuals, we have a Code of Ethics that sets out our behaviour. When someone missteps, decisive action is taken, and communicated back into the business. An authority matrix forms the backbone of day-to-day governance.

Formal reporting structures complement business-level processes that result in dynamic and iterative risk assessments and mitigation actions. Relevant management and executive committees have been structured into each of the six divisions. These in turn report into divisional boards, represented by the divisional exco as well as representatives from Bidvest's corporate office executives. Matters from these divisional board meetings are escalated further to the Exco, which is attended by the Group directors and functional executives (covering strategy, M&A, finance, transformation, ESG, business development) as well as the six divisional CEOs. The three executive directors in turn report into the main Group board of directors, directly or through the established committees.

Our aim is to conduct business with uncompromising integrity while also actively managing cybersecurity risk.

		Topic	Our aim	We will	Measurement
Governance	G1	Ethics	To conduct business with uncompromising integrity.	Be honest, respectful and accountable at all times to all stakeholders. Transparently and actively monitor and manage product and service safety as well as regulatory compliance.	Track Ethics Line cases and the resolution thereof. # of product recalls; # regulatory violations/fines.
	G2	Governance structures	To provide assurance to all stakeholders through independent oversight.	Uphold the established governance structures and have a B-BBEE Level 2 rating by 2025.	% board independent; adverse external audit findings; B-BBEE audited rating.
	G3	Risk management	Identify material risks, qualitative and quantitative, and mitigating them.	Formulate mitigating actions for all identified material risks. In addition, an external advisor was tasked to identify Group risks.	Risk metrics.
	G4	Data privacy	To comply with legislation and IT-security risks.	Deploy ALICE across all businesses to continuously assess data governance and basic IT hygiene. We target a score of 25% or lower by 2023. Implement a data privacy framework and raise internal awareness.	ALICE IT score card per division and overall; # or cyber/information breaches. # of employees trained.

 

Ethics

The Group subscribes to a philosophy of transparency, accountability and integrity in all our business dealings, as captured in the Bidvest Code of Ethics ("Code").

There are established grievance and whistle-blower processes at individual businesses, in addition to an independently administered Ethics facility. This free-to-use facility is administered by Deloitte. The Tip-Offs Anonymous system provides whistle-blowers with three channels to raise their concerns, namely telephonic, email and a website form. These communication channels are monitored 24 hours, seven days a week and Deloitte offer correspondence in all 11 South Africa official languages as well as Oshiwambo and Otjiherero for Namibians, together with Portuguese and German.

Internal Audit also track, and log, applicable calls received outside of the Ethics facility, for example, via social media, the website or emails.

Awareness campaigns are run across the Group, using mechanisms such as SMS and posters being prominently displayed in high traffic areas to encourage employees to "not support it, but rather report it".

During FY2021, a total of 146 calls were logged through the Ethics facility. Of these, 13 remain open with five relating to fraud, six human resource related, and one each to corruption and governance. A further two from previous periods are also still open.

Category	Closed	Waiting	Grand total
Corruption	5	1	6
Enquiry	8		8
Fleet management irregularities	2		2
Fraud	12	5	17
Governance	23	1	24
Human Resources	76	6	82
Theft	5		5
Violent crime	2		2
Grand total	133	13	146

The oversight process was enhanced during FY2021. The Group chief executive reviews calls and responses and initiate the necessary further investigation on calls relating to racism, discrimination and harassment. The Group executive director responsible for transformation and sustainability, together with the Head of Internal Audit, also reviews quarterly calls and progress in detail.

As a consequence of calls received via the Bidvest Ethics facility, 47 internal control enhancements were implemented, nine disciplinary actions were taken, three employees were dismissed and two civil or criminal cases were opened.

Code of Ethics

We are committed to conducting healthy business practices which support our Company values of respect, honesty, integrity and accountability, ensuring a stable employment environment and the ongoing success of Bidvest.

We believe in empowering people, building relationships and improving lives. Entrepreneurship, incentivisation, decentralised management and communication are the keys.

What does this mean:
Respect	To hold in esteem, in honour of others and oneself
Honesty	Respectability, trustworthiness, truthfulness, sincerity, freedom from deceit and fraud
Integrity	Uncompromising adherence to moral and ethical principles
Accountability	The state of being responsible, liable and answerable
Transparency	The quality of being clear, honest and understood
Excellence	The quality of distinction; possessing good qualities in high degree
Innovation	Introduction of new, creative products, methods and ideas

Compliance with the Bidvest Code is mandatory at all levels of the organisation.

Directors and senior management are committed to being role models of this Code for the Group. All employees should always measure their behaviour in terms of the spirit of the Code, as well as against the practical guidelines.

Guidelines on ethical behaviour
Conflicts of interest	Employees have different responsibilities towards their employer, families and communities. Without negating other responsibilities, employees are expected to look after the interests of the Group and conflicts (real or perceived) should therefore be avoided or managed properly and adequately disclosed.
Having a second job	It is not acceptable to have a second job that would have a negative impact on the ability of the employee to serve the interests of the Group.
Interests in suppliers or customers	Any substantial interest (direct or indirect) in a supplier or customer of the Group would constitute an unacceptable conflict of interest and should be avoided altogether.
Affected parties	Immediate family members (spouse, sibling, children) are also affected by the policy and are not allowed to work for, or to have a substantial interest in a customer or supplier without proper disclosure.
Disclosure	All existing, potential or perceived conflicts of interests should be disclosed to management. Based upon full disclosure, a decision will be made how to manage the situation – this will be done on a case-by-case basis.
Business courtesies	Giving or accepting business courtesies is accepted within a common business environment, provided that such courtesies are not excessive and are not given or received in order to unduly influence a business decision. Management must maintain a gift register, and all courtesies (offered or received) above a certain value must be recorded.
Kickbacks and bribes	No kickbacks or bribes may be accepted or given. If they are offered to a Group employee, it should be reported immediately to management, who will decide what further action might be required.
Cyber liabilities	Access to facilities such as e-mail and internet should not be abused. As far as possible, employees should avoid using e-mail for sending or receiving personal messages (especially if they contain large attachments) or junk mail. Sending or receiving chain mail is prohibited. No employee should access or distribute any material that could offend others (e.g. pornographic material or material that could incite racial hatred). Any involvement in activities such as computer hacking and willful virus transmission is prohibited.
Collusion	Any agreement between employees, competitors, suppliers or customers, to limit open competition by deceiving, misleading, or defrauding others to obtain an objective by defrauding or gaining an unfair advantage, for example an agreement to divide the market, set prices, limit production, wage fixing, kickbacks, etc will not be tolerated, or acceptable.
Expense accounts	All expense accounts being an accurate reflection of actual expenses incurred on behalf of the Group should be supported by the original documentation, submitted regularly and approved by a designated manager.
Insider trading	The Group adheres to the Insider Trading Act making it illegal for any person to trade in any shares/ securities when in possession of non-public material information.
Divulging trade secrets	All Group proprietary information should be protected and may not be disclosed to third parties.
Competitor relations	Within the competitive environment of a market economy, the Group appreciates the opportunity to compete fairly and responsibly. The Group will not attempt to access any confidential competitor information, nor will it engage in any activities that would constitute – or could be perceived as – collusion or price-fixing.
Privacy	The Group respects the rights of individuals to privacy. Any activities that could be perceived as an invasion of privacy (e.g. monitoring of e-mails, telephone calls, internet usage) will be fully disclosed by the Group, and will include a sound business motivation for such actions.
Private use of Group assets	Although limited and occasional private use of Group assets is not prohibited, all employees should be aware that such assets should be used, first and foremost, to achieve the Group’s objectives.
Copyright infringement	The infringement of copyright is illegal, and will not be tolerated. In particular, any software that is used on the Group's computer equipment must be properly licenced.
Discrimination	Discrimination based on any of the following: race, religion, age, pregnancy, marital status, sex, gender, sexual orientation, ethnic or social origin, disability, colour, conscience, belief, culture, language and birth – is illegal and will not be tolerated. Any employee that experiences any kind of discrimination should report this immediately.
Sexual harassment	Any unwanted conduct of a sexual nature is totally unacceptable and will not be tolerated. Any employee who experiences sexual harassment should report this immediately.
Work/life balance	The Group acknowledges the needs of employees to fulfil responsibilities and commitments other than those to the Group, and encourages all employees to maintain a healthy balance between their personal and professional lives.
Sustainability	The Group is committed to the natural environment and also to be a responsible corporate citizen.The Group will report annually on the nature and extent of its social, transformation, ethical, safety, health and environmental management policies and practices.
Political contributions	No political contributions (either monetary or in-kind) will be made by the Group, unless prior authorisation is obtained from the Bidvest board and disclosed in the annual report.
Whistle-blowing	The Protected Disclosures Act ensures that those individuals who speak up against unethical or illegal behaviour will be protected. The Group encourages employees to make such disclosures, and for this purpose has created a confidential toll-free telephone number.

Product and service safety

Most products distributed and retailed are backed by manufacturer guarantees and are South Africa Bureau of Standards approved. Vehicles sold by McCarthy generally has maintenance or service plans, backed by Original Equipment Manufacturer warrantees. Included in the post purchase support provided by McCarthy is a complimentary one-year roadside assistance programme. Bidair Cargo has safety processes in place in line with aviation requirements while Bidvest Lounges and King Pie have food safety programmes in place. PHS recycled sanitary bin waste in line with regulations.

During the year, McCarthy handled five minor product recalls, Steiner recalled sanitiser products that caused colour stains, wipes disintegrated, and incorrectly branded cans. Bidvest Tank Terminals had one instance where isopropyl alcohol was contaminated with iso-propylol.

Bidvest Wealth and Employee Benefits had one claim against its professional indemnity policy for R900 000. This was in respect of an administration error made on a client in March 2020, but which was resolved and finalised on 14 August 2020.

Leadership

Board of directors

How the functional Bidvest governance structure works

Bidvest is a decentralised group whose success is, in part, attributable to allowing managers to run the businesses as if it is their own. Cluster, divisional and corporate office layers provide oversight, guidance, strategic direction and consolidated reporting. Living our blueprint and core values of accountability and integrity everyday, in everything we do, is critical in successfully upholding our functional governance structure. The ethical onus on the Bidvest family is higher than in a more structured environment. We understand our responsibility.

Material business processes, controls and risks are monitored and assessed through a combined assurance model. Management, internal audit ("IA") and external audit, ALICE as well as non-executive directors all play a role.

Combined assurance receives deliberate and focused attention at Bidvest. Continually optimising our combined assurance model avoids duplication, rationalises collaboration efforts upstream amongst assurance providers, coupled with effectively managing assurance costs. The activities are coordinated to maximise the depth and reach of assurance achieved by each of the assurance providers. This enables an effective control environment and ensures the integrity of information used for reporting and decision making.

The IA function is an independent, value-adding, progressive and responsive service to Bidvest shareholders. It fulfils a role of objectively evaluating the business processes and controls so as to appropriately manage the risk and support management's commitment to a strong control environment and operational excellence. The IA function is well-constituted with a professional audit staff (in excess of 25 Chartered Accountants in managerial positions) with sufficient knowledge, skill-set and experience to execute on the board-approved IA Charter that is consistent with the Institute of International Auditors' definition of IA as well as the principles of King IV™.

Bidvest currently has approximately 250 operating entities, some of which have an extensive branch network. Each branch and entity are responsible for their own P&L, balance sheet and cash flow statement. On a monthly basis, financial flash results are rolled up from branch, business, cluster, division to Group level by the fifth business day of the next month, followed by a detailed aggregation by the third week. Cluster management review the results in granular detail with operational management ahead of meeting with the divisional CEO to discuss the results, operational and any other matters. The divisional CEOs then meet with the Group chief executive on a one-on-one basis to scrutinise performance and discuss pertinent matters.

Financial processes and controls

Quarterly, divisional audit committee meetings are chaired by an independent non-executive director and attended by operational management, divisional CFO and CEO, Group CFO, as well as external audit. These meetings consider and review the following:

• Report back from IA on the design and operating effectiveness of controls tested during the quarter in accordance with the board-approved, risk-based IA plan;
• IA's divisional assurance overview and conclusion with regards to the control environment;
• IA Findings Tracker tracking of all identified control weaknesses to resolution. Systemic and recurring control weaknesses are elevated and root cause analysis presented. Fit-for-purpose remedial action is suggested to management;
• External audit report on work conducted during the quarter, any control deficiencies identified and potential risk areas that require specific scrutiny;
• Results, observations and remedial action taken on the back of security hygiene controls monitored by ALICE;
• Signed management representation letters attesting to the soundness of financial controls and proper governance in place;
• Schedules of losses incurred as a result of fraud, material exposures, and conflicts of interest;
• Status updates on current IT projects; and
• Divisional risk registers and/or risk meeting minutes.

Quarterly the Group Audit committee, chaired by an independent non-executive director and attended by the Group CFO, Head of IA, external audit and the divisional audit committee chairs, meet to deliver on their mandate of oversight and fulfil specific requirements as set out by the Listings Requirements. The committee has a rolling annual agenda with particular focus on the IA plan in Q1, interim results in Q2, goodwill impairment and the external audit plan in Q3 followed by the year end results in Q4. The last quarters' work is stretched over two days in order to allow the committee to consider:

• Reports from the Group CFO on the consolidated financial results, performance against the budget, the liquidity and solvency position of the Group, top 50 debtors and inventory analysis across the Group, a going concern assessment as well as an update on corporate action(s);
• Divisional audit committee chairman reports on key matters raised in the divisional audit committee meetings as well as any legal cases;
• The consolidated IA report dealing with the progress of reviews against the approved IA plan, recalibration of the approved IA plan based on ongoing risk assessment per company, particular areas of concern, remediation of findings as tracked in the Findings Tracker and overall conclusion with regards to the control environment on divisional and Group level;
• Results, observations and remedial action taken on the back of security hygiene controls monitored by ALICE;
• The external audit report on the results of audit testing against the approved plan, particular areas of concern and/or risk, purchase price allocation assessments and other regulatory requirements;
• Post-acquisition reviews, if any;
• Schedules of losses incurred as a result of fraud and theft, material financial exposures and contingent liabilities, conflicts of interest and related party transactions, and foreign exchange contracts and other financial instruments and facilitation agreements;
• A register of management representation letters received for the quarter, guarantees and letter of comfort, and gifts (received and given);
• The status of annual financial statements and tax returns;
• IT project reviews; and
• Confirmation of a risk management process in place at divisional level.

Audit committee members, attendance, mandate, focus

The committee's main objective is to assist the board in fulfilling its oversight responsibilities, in particular, evaluating the adequacy and efficiency of accounting policies, internal controls and financial and corporate reporting processes. In addition, the committee assesses the effectiveness of the internal auditors and the independence and effectiveness of the external auditors. In FY2021, the committee reported that: PWC and the individual audit partner, the designated external auditor, are accredited and independent; it considered all key audit matters and is comfortable that they have been adequately addressed and disclosed; there were no reportable irregularities; is of the view that the arrangements in place for combined assurance are adequate and are achieving the objective of an effective, integrated approach across the disciplines of risk management, compliance and audit; the IA function is very strong and the CFO and finance team are competent; and recommended the AFS to the board.

For the complete Audit committee report, please refer to the AFS.

During the year under review, five meetings were held:

	24-Nov-2020	25-Feb-2021	27-May-2021	30-Aug-2021	2-Sept-2021
SN Mabaso-Koyana2 (Chairperson)	1	1	1	1	1
EK Diack (previous Chairperson)1	1	1
RD Mokate	1	1	1	1	1
L Boyce2			1	1	1
N Siyotula	1	1	1	1	1
NW Thomson	1	1	1	1	1
Invitees
NT Madisa	1	1	1	1	1
MJ Steyn	1	1	1	1	1
A Cunningham	1	1	1	1	1
RW Graham	1	1	1	1	1

Notes:
1	Retired 1 April 2021.
2	Appointed 12 March 2021.

Risk processes and controls

The risk management process at business level rolls up to divisional level varies and is considered fit-for-purpose. The regulated entities (Bidvest Bank, Bidvest Insurance, Bidvest Life) have risk management processes as guided by the relevant regulator. Irrespective of the business processes, divisional management considers key risks quarterly across the operations and report on the top five risks, the potential impact and mitigating actions at the divisional board meeting. These divisional risk registers are included in the Group Risk committee meeting pack. The Group chief executive takes account of these divisional risk registers while considering the macro backdrop as well as the current and expected operating environment to elevate key Group risks for discussion at the Group Risk committee. IT governance, which covers IT resources, IT dependency, management of IT risk exposure, business resilience, cybersecurity, vendor management, technology investment, project assurance and data governance, are reported on by the Head of IA with the assistance of ALICE.

ALICE, an autonomous artificially intelligent capability/robot, runs on a scheduled frequency (continuously, daily, weekly, monthly or quarterly) as deemed fit for purpose based on the maturity, complexity and posture of the IT environment of each company within the Group. The IT findings are available to management on a continuous, remote and near real-time basis. Remediated IT findings are re-audited by ALICE upon receipt of updated audit evidence. The IA team follows up on unresolved findings on a monthly basis. The scope of assurance provided by ALICE is tailored per company based on integration and accessibility of data and can include: User Administration Digital Audit Procedures, Cybersecurity Digital Audit Procedures, Microsoft Baseline Network Configuration, Password Configuration, Patch Management, Website & Certificate Management, etc.

Risk members, attendance, mandate, focus

The committee identifies material risks to which the Group is exposed and ensures that the requisite risk management culture, policies, and systems are implemented and functioning effectively. The committee is also responsible for the governance of IT. Cyber security, IT infrastructure and system availability, business continuity and health and safety protocols, the implementation of the POPIA requirements and response plans to supply chain disruptions were focus areas for FY2021. These as well as the ESG risks identified will continue to be focus areas in FY2022.

The names of the members who were in office during the period 12 September 2020 to 3 September 2021 and the number of committee meetings attended by each of the members are:

	26-Nov-2020	24-Feb-2021	24-May-2021	23-Aug-2021
RD Mokate (Chairperson)	1	1	1	1
AK Maditse1 (previous Chairperson)	1	1
MJD Ruck2		1	A
N Siyotula	1	1	1	1
S Masinga	1	1	1	1
BF Mohale		1	1	1
SN Mabaso-Koyana3	1	1	1	1
NT Madisa	1	1	1	1
GC McMahon	1	1	1	1
MJ Steyn	1	1	1	1

Notes:
A	Apologies rendered.
1	Retired 1 April 2021.
2	Resigned 30 June 2021.
3	Appointed 12 March 2021.

Sustainability processes and controls

The Group Social, ethics and transformation committee assists the board with the oversight of social, ethical and transformation matters and ensuring the Group is and remains a committed socially responsible corporate citizen. The scope includes matters relating to ethical management, human resource development, employment equity and transformation, environmental impact and climate change, corporate social investment, safety and occupational hygiene, health and employee wellness and stakeholder engagement.

In terms of the Company Act, its oversight covers all Bidvest companies, of which there are 41, with a public interest score above 500. Practically, all operations are covered by the oversight.

Under the transformation collective, diversity, skills development, preferential procurement, enterprise and supplier development and black ownership are measured, monitored and managed. Each business is responsible for their own scorecard, comprising of all the aforementioned elements. External verification of each scorecard happens every year. Every division has an executive charged with transformation. The executive provides guidance and support to the individual businesses, measure and manage the outcomes using a Group-wide toolkit and report back on a rolled-up transformation position to the divisional board and the responsible Group executive director on a quarterly basis. The responsible executive director consolidates the divisional transformation reports and toolkit data to report back on progress, challenges and plans to address identified gaps to the Group Social, ethics and transformation committee. As a listed South African company, black ownership is a complex matter, particularly in a diversified multinational group, but the requirement and our responsibility are not disputed. After extensive debate, the Exco decided that the most appropriate course of action would be to manage customers' requirements for black-owned suppliers, on a case-by-case basis. This is, however, becoming more challenging and as a consequence, the corporate office is working with advisors on the various options available and this, as well as isolated ownership transactions, are reported on to the board committee.

Each business manages their own employees and are responsible for their occupational health and safety. And more recently, the necessary COVID-19 protocols. Wage negotiations with unions and other bargaining councils happen at business or sector level, as appropriate. Guidance on salary increases is cascaded down from the corporate office as part of the annual budget process. Businesses report annually to the Department of Labour on demographics, income parity, training, etc in terms of the Employment Equity Act. Some of this information is also aggregated at Group level and forms part of the consolidated reported information. The pandemic highlighted the need for a comprehensive, employee wellness programme that was subsequently rolled out to all South African operations to augment what some of our businesses had in place. The Group executive director responsible receives a comprehensive report from the service provider on a quarterly basis, detailing the usage and most common areas of concern and assistance required. The information is disseminated to divisional CEOs to use as input in human capital management across the businesses. Key observations are also reported to the board committee.

The COVID-19 pandemic demonstrated to the executive team that some guidance from the centre with regards to specific human capital aspects is not misplaced. This is not centralisation, but rather the best outcome for the Bidvest family.

Group sponsored corporate social investment initiatives and programs are championed by the Group executive director and shared with the board committee.

The Group is governed by its Code which articulates Bidvest's commitment to doing business the right way, guided by a philosophy of transparency, accountability, integrity and respect. The Code requires the board of directors, management and employees to obey the law, respect others, be fair and honest, and protect the environment. The reporting, management and resolution of ethical matters are handled through several channels, operational and independent. Bidvest's Code of Ethics can be found here.

From a bottom-up perspective, individual businesses have their unique established grievance and whistle-blower processes. This is our first line of defence and management is empowered to deal with reported matters decisively. Historically, most reported matters have been routine, human resource related and resolved quickly. Complex and serious matters are escalated, as appropriate, to the corporate office. Quarterly, the divisional CEOs sign off a schedule, detailing fraud, theft, conflicts of interest, related party transactions and gifts, which is tabled at the divisional and Group Audit committee meetings, as set-out earlier. A consolidated gift register is tabled at the quarterly Group Social, ethics and transformation committee meeting.

Bidvest also has an independently administered Ethics facility which provides whistle-blowers with three channels to raise their concerns, namely telephonic, email and a website form. All concerns raised through the Ethics facility are properly investigated and tracked to resolution with sign-off from divisional management. Oversight of this resolution process is provided at a Group level. All concerns relating to discrimination and harassment, as well as those judged to require escalation are required to be signed off by a Group executive director. Quarterly report back is given to the Group Social, ethics and transformation committee on the Ethics facility.

Ethics Line 0800 50 60 90 or bidvest@tip-offs.com.

Conducting business in a sustainable manner is integrated in our day-to-day activities, and managed at a business level as Bidvest businesses have different environmental footprints. For some businesses, mainly in Freight and some Services businesses, the adherence to environmental standards is directly linked to licences, regulations and/or franchise rights. These businesses monitor, manage and report as regularly as required. Any environmental breaches will be reported into the divisional risk and/or audit committees and escalated further, if need be.

From a Group perspective, common material issues were identified in our commitment to do business in an environmentally friendly and responsible manner. Initially reporting was guided by GRI standards. In 2016, sustainability, transformation, innovation and business enhancement were included as inputs (15% to 20% weightings) into the performance metrics linked to Bidvest's short- and long-term incentives schemes. In 2018 we identified the SDGs that were most relevant to us and the impact of our basket of services and products as well as corporate citizen activities.

Our collective impact on the environment became very evident when the pandemic forced us to take more decisive action. As a responsible corporate citizen, we have gained greater insight into sustainability. We realised that a targeted, with an all-encompassing approach is needed (and appropriate). It is a journey which we will tackle with our normal agility, focus and commitment. A comprehensive ESG Framework was developed and approved during FY2021.

On an annual basis, select environmental data is gathered from all businesses. This and other data are aggregated, together with qualitative evidence of sustainability, transformation and innovation, and reported to the Group Social, ethics and transformation committee to assess the performance and derive a score that feeds into the incentive calculations.

Social, ethics and transformation committee members, attendance, mandate, focus

The committee's responsibilities are in line with legislated requirements and codes of best practice. It monitors the Group's compliance in relation to sustainable development, transformation, good corporate citizenship, environment, occupational health and public safety, labour and employment as well as the Group's Code and sustainable business practices. During the fiscal year ended 30 June 2021, the committee was focused on transformation, employment equity, ethics, environmental sustainability as well as empowerment and support of the Group's employees.The focus for FY2022 will continue to be on transformation, employment equity and sustainability.

The names of the members who were in office during the period 12 September 2020 to 3 September 2021 and the number of committee meetings attended by each of the members are:

	26-Nov-2020	24-Feb-2021	24-May-2021	23-Aug-2021
S Masinga (Chairperson)	1	1	1	1
AK Maditse1	1	1
BF Mohale	1	1	1	1
L Boyce2			1	1
NT Madisa	1	1	1	1
GC McMahon	1	1	1	1
MJ Steyn	1	1	1	1

Notes:
1	Retired 1 April 2021.
2	Appointed 12 March 2021.

Remuneration processes and controls

The Group Remuneration committee plays a key role in ensuring that executive remuneration is aligned to the interest of all stakeholders. This is best reflected by the variety and balance of the performance measures incorporated in the Bidvest short- and long-term incentive schemes as well as the overall remuneration mix. The principles of the Group remuneration policy are cascaded down into the divisions and businesses, with clear targets set for short-term incentives, excluding those determined in accordance with sectoral agreements. The committee determines annual salary increases for executive directors and recommend non-executive director fee increases taking account of the budget guidelines. DG Capital, as the standing external advisor, provides independent input.

Remuneration committee members, attendance, mandate, focus

The committee is empowered by the board to assess and approve the broad remuneration strategy for the Group, the operation of the short- and long-term incentives for executives across the Group and sets short- and long-term remuneration for the executive directors and members of the executive committee. During the fiscal year ended 30 June 2021, the Remuneration committee was focused on continuing to promote the Group's strategic objectives through fair and transparent remuneration, a comprehensive remuneration benchmark exercise for the Group chief executive, Group CFO and executive director responsible for transformation and sustainability, and incorporating specific targets for non-financial metrics in incentive schemes. In FY2022 the committee will continue to promote the Group's strategic objectives through fair and transparent remuneration. Please refer to the detailed Remuneration report.

The names of the members who were in office during the period 12 September 2020 to 3 September 2021 and the number of committee meetings attended by each of the members are:

	8-Oct-2020	24-Feb-2021	24-May-2021	2-Sept-2021
NW Thomson (Chairperson)	1	1	1	1
EK Diack1	A	1
AK Maditse1	1	1
S Masinga	A	1	1	1
BF Mohale	1	1	1	1
L Boyce2			1	1
Invitees
NT Madisa	1	1	1	1
MJ Steyn	1	1	1	1

Notes:
A	Apologies rendered.
1	Retired 1 April 2021.
2	Appointed 12 March 2021.

Talent processes and controls

Succession and diversity at executive management and board level are key governance areas for the Group Nomination committee. Diversity entails gender, race, experience and tenure. We firmly believe that tone is set at the top and believe in the benefits that diversity brings.

Nomination committee members, attendance, mandate, focus

The committee is responsible for assessing the independence of non-executive directors. It identifies and evaluates suitable candidates for appointment to the board to ensure that the board is balanced and able to fulfil its function as recommended by King IV™. The committee also recommends to the board the re-appointment of directors and succession planning for directors including the chief executive and senior management. In FY2021, it included appointing non executive directors, with particular focus on the Audit committee and providing support to the newly appointed Group chief executive. The focus for FY2022 will be to build a well-considered pipeline of non-executive director candidates, amongst others.

The names of the members who were in office during the period 12 September 2020 to 3 September 2021 and the number of committee meetings attended by each of the members are:

	26-Nov-2020	26-Feb-2021	28-May-2021	3-Sept-2021
Committee Members
BF Mohale (Chairman)	1	1	1	1
EK Diack1	1	1
RD Mokate	1	1	1	1
L Boyce2			1	1
Invitees
NT Madisa	1	1	1	1
GC McMahon	1	1	1	1

Notes:
1	Retired 1 April 2021.
2	Appointed 12 March 2021.

Corporate action processes and control

Corporate strategy is set by executive management and approved and monitored by the board. The strategy can be summarised as:

• Maximising the current diverse portfolio through organic growth, innovation and bolt-on acquisitions;
• International expansion in the chosen niches of hygiene services, facilities management and plumbing wholesaling; and
• The efficient allocation of capital.

All bolt-on acquisitions are discussed with and approved by the Group chief executive and largely funded from operational cash flow. Material capital allocation projects are tabled at divisional board meetings for approval. The Group Acquisition committee meets as and when required to consider corporate activity involving capital in excess of R500 million.

Acquisition committee members, attendance, mandate, focus

The role of the committee is to review potential mergers, acquisitions, investment and other corporate transactions in line with the Group's levels of authority. During FY2021, the Acquisition committee was focused on the introduction of a Black women-owned partner in Bidvest Protea Coin, the consideration and evaluation of proposed expansion opportunities, including Axis and Cordant, the Group's long-term growth strategy and creating the platform to access new markets. In FY2022 the focus will continue to be on the Group's long-term growth strategy and creating the platform to access new markets.

The names of the members who were in office during the period 12 September 2020 to 3 September 2021 and the number of committee meetings attended by each of the members are:

	1-Dec-2020	10-May-2021	30-Aug-2021
Committee Members
BF Mohale (Chairperson)	1	1	1
EK Diack1	1	1
MJD Ruck2	1	1
SN Mabaso-Koyana3		1	1
NT Madisa	1	1	1
MJ Steyn	1	1	1

Notes:
1	Retired 1 April 2021.
2	Resigned 30 June 2021.
3	Appointed 12 March 2021.

Executive management processes and controls

At a minimum, the Exco meets on a quarterly basis. Apart from the CEO's top-down observations on the macro and trading environments and the CFO's report on the consolidated financial position of the Group, the following matters are standing agenda items for discussion:

• Confirmation of no anti-competitive behaviour, conflicts of interest and/or third-party agency arrangements;
• Updated operational financial projection;
• Corporate activity, including acquisitions and disposals;
• Human capital and transformation report aggregated from divisional submissions;
• Business development report detailing business pipeline, engagement with commercial stakeholders and media feedback;
• Top Group risks; and
• Sustainability matters to be raised at the Group Social, ethics and transformation committee.

Feedback from investor meetings post-interim and final result releases are shared with the executives, as is the quarterly shareholder register. Annually, strategy and budget sessions per division is held after divisional management engaged with and rolled up the budget and strategies from individual businesses. The aggregate outcome is then discussed at the Exco and board meeting.

Board of Directors

The Bidvest board meets on a scheduled quarterly basis. As a standard, the three executive directors provide detailed feedback to the board with regards to operational, strategic, financial, human capital, transformation and sustainability matters. Board committee chairpersons deliver feedback on pertinent matters and summarise the deliberations at the recent committee meeting. Committee packs are digitally available to all board members. Resolutions passed during the quarter is ratified and other administrative matters dealt with. Each board meeting closes with a session during which members reflect on the meeting.

Board members, attendance, mandate, focus

The board is fully committed to the highest standards of governance and accountability, as recommended in King IV™, and is cognisant of the role that corporate governance plays in running the Group and delivering governance outcomes such as an ethical culture, good performance, effective control and legitimacy. The board of directors provides effective leadership ensuring that clear strategic direction and appropriate management structures are in place. The practices underpinning the principles endorsed in King IV™ are entrenched in the Group's internal controls, policies and procedures governing corporate conduct. Governance within the Bidvest Group extends beyond legislative compliance. The board confirmed that the principals of King IV™ were satisfied with the updated full King IV™ application register available on the Group website: www.bidvest.com.

The board plays a pivotal role in strategy planning and establishing benchmarks to measure the Group's strategic objectives. The role of the board is regulated in a formal board charter, which defines its authority and power. While retaining overall accountability, the board has delegated authority to the Group chief executive to run the day-to-day affairs of the Group. The Group chief executive is supported by the Exco. The board has also established committees to enable it to discharge its duties and responsibilities properly and to fulfil its decision-making process effectively.

A summary of each committee's key focus areas for FY2021 and the year ahead can be found below.

The Group Audit committee fulfils the statutory responsibilities of an audit committee for the Group as a whole, except for the banking and insurance businesses, both of which have their own statutory audit committees. A similar principle applies in respect of the Group Social, ethics and transformation committee. Majority-owned subsidiary, Adcock Ingram, has its own board with additional oversight by the Group to provide assurance.

Key focus areas during FY2021 were:

• Effective risk and oversight - reviewed quarterly feedback from Risk and Audit committee chairpersons, including solvency, liquidity and going concern status reports as well as financial performance against budget and the prior year, information and technology governance and specific focus on operating during the pandemic. Interim and final results announcements and results were approved as was the annual report suite, including the financial statements;
• Uncompromised governance - reviewed quarterly feedback from the Social, ethics and transformation, Risk and Audit committee chairpersons with regards to governance of ethics, effectiveness of the functional governance framework, as well as compliance with applicable laws, the Listings Requirements, Memorandum of Incorporation ("MoI") and non-binding rules, codes and standards. It also included specific focus on the health and safety of employees and support to both employees and society at large as the effects of the pandemic continued to cause turmoil and charters are reviewed and performance reviews concluded on a rolling basis;
• Meaningful stakeholder engagement - the importance of broad and meaningful stakeholder engagement was emphasised by the pandemic and lived through the focus on service, relationships and the Group's reconfirmed commitment to building an inclusive society. Actions and decisions were considered through this lens. The feedback from a dissenting shareholder provided by the Remuneration committee chair was reviewed and the convening of the 2021 AGM and notice to shareholders were approved; and
• Enduring sustainability - the need for the Group to sharpen its focus on sustainability, inclusive of environmental, social and governance matters, resulted in a focused and targeted ESG Framework which was reviewed and approved. Conducting business in a responsible and accountable manner has been part of Bidvest's DNA since inception and management recognises this as a journey with more to do.

During the current year, changes were made to the composition of the Board. Sindi Mabaso-Koyana and Lulama Boyce were appointed as independent non-executive directors on 12 March 2021 and are to be elected by shareholders at the forthcoming AGM. Eric Diack and Alex Maditse retired effective 1 April 2021 and Myles Ruck resigned on 30 June 2021.

In terms of Bidvest's MoI, the non-executive directors who retire by rotation at the forthcoming AGM are Renosi Mokate and Norman Thomson, and being eligible, offer themselves for re-election.

The directors' academic and professional qualifications are presented below. There were four Group board meetings during the period under review.

The names of the directors who were in office during the period 12 September 2020 to 3 September 2021 and the details of board meetings attended, either in person, by video-conference or tele-conference, by each of the directors are as follows:

Board	27-Nov-2020	26-Feb-2021	28-May-2021	3-Sept-2021
Independent non-executive directors
BF Mohale (Chairman)	1	1	1	1
EK Diack1	1	1
MJD Ruck2	1	1	1
AK Maditse1	1	1
S Masinga	1	1	1	1
RD Mokate	1	1	1	1
N Siyotula	1	1	1	1
NW Thomson	1	1	1	1
L Boyce3			1	1
SN Mabaso-Koyana3			1	1
Executive directors
NT Madisa	1	1	1	1
GC McMahon	1	1	1	1
MJ Steyn	1	1	1	1

Notes:
1	Retired 1 April 2021.
2	Resigned 30 June 2021.
3	Appointed 12 March 2021.

For the complete directors' report, please refer to the AFS.

Directors' curricula vitae

Independent non-executive chairman

Bonang Francis Mohale

Age: 59

Qualification: Postgraduate Chartered Marketer (CMSA)

Appointed: 1 July 2019

Bonang has held several leadership positions in the private sector and has been lauded and recognised with several awards over the past 25 years. He was the Chief Executive Officer of Business Leadership South Africa, Chairman of Shell South Africa (Pty) Ltd, Chief Executive Officer of Drake & Scull FM SA (Pty) Ltd, Chief Executive of Sanlam Limited, Executive Vice President of SAA and on 30 August 2021, elected as president of Business Unity South Africa.

Lead Independent director

Renosi Denise Mokate

Age: 63

Qualification: PhD

Appointed: 1 May 2018

Renosi has held several leadership positions in the public sector and academia. She was the Deputy Governor of the South African Reserve Bank from August 2005 to July 2010 and Executive Director of the World Bank from 2010 to 2012. She has also served as the Executive Dean of the Graduate School of Business Leadership, UNISA, and as a senior policy analyst at the Development Bank of Southern Africa. She is currently the Executive Chairperson of Concentric Alliance. She holds non-executive directorships at Vukile Property Fund amongst others. Her committee membership includes remuneration, governance, audit, risk and social and ethics.

Chief executive

Nompumelelo (Mpumi) Thembekile Madisa

Age: 42

Qualification: Masters in Finance and Investment, BCom Honours in Economics and BSc in Economics and Mathematics

Appointed: 4 December 2013

Mpumi was previously chief director in the Gauteng provincial government. During her time at Bidvest, she has held various senior management and executive board director positions such as general manager business development, divisional director business development, corporate affairs director and sales and marketing director. She is a director of numerous Bidvest subsidiaries, board member of Business Leadership South Africa and the chairman of Adcock Ingram.

Executive directors

Mark John Steyn

Chief financial officer

Age: 51

Qualification: CA(SA)

Appointed: 1 March 2018

Mark joined Bidvest in May 1997 and has held various financial positions within Bidvest Freight. Since 2012, Mark held the position of chief financial officer of Bidvest Freight. Mark was appointed to the Bidvest board as chief financial officer, effective 1 March 2018. He serves on all South African divisional boards, divisional audit committees and served as a trustee on the various Group retirement funds.

Executive director

Gillian Claire McMahon

Age: 49

Qualification: BCom Honours Business Economics and Industrial Psychology, MCom Industrial Psychology

Appointed: 27 May 2015

Gillian previously held various operational roles in customer service, operations, training and human resources. During her time at Bidvest, Gillian has held various senior management roles including commercial director of Bidtravel and is the current Group transformation executive. Gillian is a director of numerous Bidvest subsidiaries.

Independent non-executive directors

Sibongile (Bongi) Masinga

Age: 54

Qualification: BCom, USA-SA Leadership and Entrepreneurship Programme (Wharton School of Business)

Appointed: 4 December 2013

Bongi is one of the founding members of Afropulse Group. Prior to this, she was the chief operating officer and head of Corporate Advisory at Quartile Capital. She has held various positions in financial services including at DBSA and Gensec. She also gained merchant banking experience with Hill Samuel in London. Ms. Masinga currently serves on the following boards: Delta Property Fund as interim CEO, Libstar, Petro SA and is a member of Council at the Durban University of Technology amongst others.

Norman William Thomson

Age: 70

Qualification: BCom CA(SA)

Appointed: 1 May 2018

Norman has gained broad business experience over many years and was the Finance Director of Woolworths Holdings Ltd from 2001 to 2013. Norman is currently a non-executive director of Real People Investment Holdings Ltd. Norman's committee membership on these include the remuneration, audit and risk.

Nonzukiso (Zukie) Siyotula

Age: 37

Qualification: CA(SA), ACMA UK, MBA and Executive Programmes from Harvard, instead and Oxford

Appointed: 25 October 2019

She was previously the Chief Executive Officer of Thebe Capital. Prior to that, she held various senior positions at the Barclays Africa Group, Old Mutual, Royal Bafokeng Holdings and South African Breweries. Zukie currently serves as a non-executive director at Wescoal Mining, Conduit Group, Denel SOC, Toyota Financial Services and Ogilvy South Africa.

Lulama Boyce

Age: 42

Qualification: CA(SA)

Appointed: 12 March 2021

Lulama is the Department Head of Commercial Accounting at the University of Johannesburg and is currently a non-executive director of Adcock Ingram. She serves on the Audit, Remuneration as well as the Social, ethics and transformation committees of the Company.

Sindisiwe Ntombenhle (Sindi) Mabaso-Koyana

Age: 52

Qualification: CA(SA)

Appointed: 12 March 2021

Sindi is the founder and chairman of the African Women Chartered Accountants Investment company. She currently serves on the following boards: MTN Limited, Phembani Group, Sun International Limited, Zenex Foundation Educational Trust, Advanced Group and Toyota SA. Sindi's committee membership on these include the remuneration, audit, investment and risk.

Company secretary

During the year under review, and in compliance with paragraph 3.84(h) of the JSE Listings Requirements, the board evaluated Ilze Roux, the Company Secretary, and was satisfied that she was competent, suitably qualified and experienced. Furthermore, since she was not a director, nor was she related to or connected to any of the directors, thereby negating a potential conflict of interest, it was agreed that she maintained an arm's-length relationship with the board.

Ilze Roux resigned subsequent to the year end on 10 August 2021, to exclusively focus on her role as Executive Corporate Affairs. Nonqaba Katamzi was appointed to the position on the same day.

IT governance and security

The IA function is an independent, value-adding, progressive and responsive service to Bidvest shareholders. Given the ever-increasing dependencies of the business on IT, specialised IT audit and consulting skills remain a necessity in the function. Intelligent automation and data analytics are well-entrenched into the mechanisms of the IA functions with further disruptive digital transformation initiatives fast becoming the reality of the IA function.

An example of such initiatives is ALICE, Bidvest's digital auditor. She combines intelligent automation and cognitive services to provide audit-as-a-service to the Group companies. Much effort has been afforded to the digital assurance roadmap for Bidvest using the ALICE platform. The appetite for ALICE to connect remotely into data sources across the Group coupled with the uptake to build remote monitoring and continuous testing capabilities on ALICE continues to significantly increase.

IT Governance – The board acknowledges technology as a mechanism to access, protect and manage information. In relation to the Group's IT Governance Framework, the board governs both technology and information so that these support the organisation in achieving its strategic objectives. The IT Forum is represented by CIOs from each division and is a platform within which to:

• Share knowledge, research and experience;
• Leverage digitalisation strategies and technology trends;
• Harness the economies of scale and Group purchasing power;
• Establish subject matter expert and centres of excellence surrounding topical technology issues; and
• Benchmark vendor services on delivery and price.

Each IT environment across Bidvest is subjected to an IT audit as part of the IA Plan. The IT audit assesses the design and effectiveness of the IT environments from a control perspective coupled with providing a view on the strategic enablement of the businesses by technology.

IT resources – Fit-for-purpose in-house operational IT skills, with the necessary strategic IT oversight, are in place. These are complemented by outsourced vendors with specialist networking, telecommunications, and cyber security skillsets.

Business resilience – Business resilience controls (including technical controls) are appropriately implemented by the individual companies, based on the needs of the Company.

Technology investment – The IT functions generally run lean with a common philosophy to sweat IT-related assets. However, significant investment continues to be made in the IT modernisation and innovation spaces across Bidvest.

Project assurance – Major IT projects are well-governed, with input from the necessary stakeholders. Major projects are timeously implemented.

IT dependency – Business and IT are continuously enhancing alignment, through IT representation on the various boards and executive committees, and in recognition of the key role IT plays in the various businesses.

Management of IT risk exposure - Significant attention is given to this across the IT environments, with an increasing focus on the management of IT risk exposure related to any new acquisitions.

Cyber security – Significant attention has been given to the identification and management of cyber security risks across Bidvest. Implementation and enhancement of the necessary controls are being performed on a case-by-case basis, dependent on the risks identified.

Vendor management – Vendor relationships are effectively managed by the Company IT departments. Economies of scale are leveraged where appropriate.

Data governance – Data governance, including the necessary supporting IT architecture, continues to receive attention by the various companies, especially those with the greatest exposure to data risks. Data privacy and protection has become a focus area for the Group. Understanding the impact of POPI and GDPR and the related implementation consequences continues to receive the necessary attention by the relevant businesses.

ALICE runs on a scheduled frequency (continuously, daily, weekly, monthly or quarterly) as deemed fit for purpose based on the maturity, complexity and posture of the IT environment of each company within the divisions. IT findings are available to IT management on a continuous, remote and near real-time basis. Remediated IT findings are re-audited by ALICE upon receipt of updated audit evidence. The IA function is required to follow-up on unresolved IT findings with IT management on a monthly basis.

Since the deployment of ALICE in November 2019, the IT risk landscape across the Group has improved as illustrated below. Through implementation and continuous monitoring of basic security control disciplines, the Group has managed to lower their risk score determined by ALICE from 90 to 43 in a two-year period. The Group is aiming to achieve a risk score of 25, the lowest score achievable on ALICE. The risk score of 25 represents the residual risk that remains despite the controls and/or disciplines being in place and operating as expected.

IT Risk Score

External assurance

PWC, the Group’s external auditor issued their opinion on the FY2021 AFS. In their opinion, the AFS fairly represents, in all material respects, the consolidated financial position of Bidvest and its subsidiaries as at 30 June 2021, and its consolidated financial performance and cash flows for the year then ended.

Key audit matter raised referred to the identification and valuation of intangible assets arising from the acquisition of PHS and the impairment assessment of indefinite useful life intangible assets and goodwill. Please refer to page 3 of the AFS for the full opinion.