The board maintains full and effective control over the company and is accountable and responsible for its performance and compliance. The board reviews the strategic priorities of the group, determines the investment policies and delegates to management the detailed planning and implementation of the objectives and policies in accordance with appropriate risk parameters. The board monitors compliance with policies and achievement against objectives by holding management accountable for its activities through quarterly performance reporting and budget updates.
The board charter codifies the board's composition, appointment, authorities, responsibilities and processes and sets out the fiduciary duties of the directors of the company. It provides the board with a mandate to exercise leadership, determine the group's vision and strategy and monitors operational performance.
The board governs through clearly mandated board committees. Each committee has specific written terms of reference approved by the board and adopted by the committee. All committee chairmen report orally on the proceedings of their committees at the board meetings. The board retains accountability and is satisfied that it has fulfilled its responsibilities in accordance with the board charter during the year.
During the year there were six board meetings and one independent board meeting relating to the Gameco transaction. The divisional chief operating officers and the group Human Resources Director attend board meetings, enabling the board to explore speciﬁc issues and developments in greater detail. Individual directors' attendance at the board and board committee meetings and at the Annual General Meeting ('AGM') is set out in the table below:
Audit and risk committee
Social and ethics committee
Marcel von Aulock(1)
(1)Marcel von Aulock was replaced as a director by Jacques Booysen on 1 June 2017
The composition of the board and of the audit and risk, remuneration and the social and ethics committees is determined by the majority shareholder. The board exercised its prerogative to appoint John Copelyn as the Chairman. As a compensating control, a lead independent director was appointed. The lead independent director is Busi Mabuza who serves on all of the committees of the board, and is therefore well placed to inﬂuence the governance of the company and meet her obligations. The only independent director who has served for more than nine years is Marcel Golding who has served for 14 years and the average length of service of independent directors is seven years. The board considers a director independent where they have had no other executive role within the group for a period of three years. One-third of the non-executive directors retire by rotation each year in line with the memorandum of incorporation ('MOI'). Self-evaluation of the board is entrenched in the board charter and terms of reference and is carried out annually. Refer to board effectiveness on page 77.
The remuneration committee reviews and assesses board composition on behalf of the board and recommends the appointment of new directors. All board appointments are made on merit, in the context of skills, experience, independence and knowledge, which the board as a whole requires to be effective. Factors that are taken into consideration are differences in skills, regional and industry experience, background, race and gender. The board considers that there is an appropriate balance of skills, experience, independence and knowledge among the independent directors. The board has approved a diversity policy incorporating race and gender. No specific targets have been set in relation to the board diversity policy but, while 67% of the board members are black, the board recognises that it does not have an adequate representation of female members at 11%.
The roles of the Chairman and the CEO are separate, with responsibilities divided between them to ensure a balance of power and authority. The Chairman is responsible for providing overall leadership of the board and ensuring that the board performs effectively. The CEO is responsible for the execution of the strategic direction, which is approved by the board, through the delegation of authority.
The CEO's employment contract includes a three-month notice period unless varied by agreement and there are no specific contractual conditions related to termination. The CEO has no other external professional commitments. Succession planning is not formalised but executive director appointments have historically been internal.
Jacques Booysen was a partner at PricewaterhouseCoopers
Inc. prior to working at the Gauteng Gambling Board for 12
years, where he held the position of Chief Executive Officer.
He joined Tsogo Sun in 2007 and served in the roles of
Director – New Business Development, Director – Gaming
Operations, Financial Director – Gaming and Managing
Director – Gaming prior to his appointment as the Chief
Executive Officer on 1 July 2017.
Rob Huddy served his articles at PwC and joined Tsogo
Sun in 1997. He held various management positions prior
to being appointed Financial Director – Hotels Offshore in
2006 and Financial Director – Hotels South Africa in 2009. On
30 September 2011 he assumed the role of Chief Financial
John Copelyn joined HCI as Chief Executive Officer in 1997.
He was previously General Secretary of the Southern African
Clothing and Textile Workers Union from 1974 before
becoming a member of parliament in 1994.
He currently holds various directorships in companies within
the HCI group.
Elias Mphande has served as the National Organising
Secretary of the Southern African Clothing and Textile
Workers Union, Marketing Director of Viamax Fleet Solutions,
Chief Executive Officer of AUTA and the Vukani Group and
Chairman of Golden Arrow Bus Services. He was appointed
to the HCI board in 2010 as a non-executive director and as
non-executive Chairman in 2015 and serves on the board
Y SHAIK (60)
BA (Law), BProc
Non-executive Director Date appointed: 15 June 2011
Yunis Shaik is an admitted attorney of the High Court of
South Africa. He is a former Deputy General Secretary of the
Southern African Clothing and Textile Workers Union and
a director of Workers’ College. He has served as a Senior
Commissioner to the KwaZulu-Natal CCMA. He is an executive
director of HCI.
Jabu Ngcobo held the positions of General Secretary of the
Southern African Clothing and Textile Workers Union from
1994 to 1999 and the Regional Secretary for Africa of the
International Textile Garment and Leather Workers Federation
from 1999 to 2006. He was appointed to the board of HCI in
2004 and serves as a director of HCI Coal and Niveus.
Busi Mabuza has held various positions in the financial services
and energy sectors and is currently a non-executive director
at Development Bank of Southern Africa, Nehawu Investment
Holdings and the non-executive chairperson of the Industrial
Mac Gani is a Chartered Accountant with over 30 years’
experience in the accounting and audit profession. He was
a founding partner of MSGM Masuku Jeena Inc., a partner
of Saboor Gani & Co and a partner of PwC until 2013. He is
a non-executive director on a number of boards including
HCI, HPF and Basil Read Holdings Limited and is on the
investigating committee of the Independent Regulatory
Board of Auditors.
Marcel Golding runs a family investment office. Prior to this he was Chairman of HCI and Chief Executive Officer of
e.tv. He was a member of parliament and Deputy General
Secretary of the National Union of Mineworkers.
(1)Date appointed to the holding company board pre-reverse listing into Gold Reef on 14 February 2011
Non-executive committee key
Audit and risk committee – Chairman: Mac Gani
Social and ethics committee – Chairman: Mac Gani
Remuneration committee – Chairman: Yunis Shaik
SUB-COMMITTEE STRUCTURE AND REPORT BACK
The board remains accountable for all matters where it has delegated
responsibility to its sub-committees. All committees and the board
are satisfied that the committees fulfilled their responsibilities in
accordance with their terms of reference during the year.
Audit and risk committee
The provision of effective governance over the appropriateness
of the group’s financial and integrated reporting including
the adequacy of related disclosures, the performance of both
the internal audit function and the external auditor, and the
management of the group’s systems of internal control, business
risks and related compliance activities.
The committee met three times during the year. The Chief Executive
Officer, the Chief Financial Officer, the group’s Director of Risk, the
Chief Information Officer and directors from the majority shareholder
attend the meetings as permanent invitees, along with external audit
and the outsourced internal audit. Other directors and members of
management attend as required.
The work of the audit and risk committee during the year focused on:
review of the risk landscapes to which the group is exposed in
relation to the group’s risk tolerance and risk appetite levels and
evaluation of the appropriateness of management’s responses to
review of insurance, treasury and taxation matters;
review of operational risk management including fraud and theft,
whistle-blowing systems and organisational resilience;
oversight of the implementation of the combined assurance
framework and plan;
review of IT risks in relation to core operational systems, systems
projects, information management and security initiatives and
governance and regulatory compliance;
review of material legal, legislation and regulatory developments;
review of prospective accounting standard changes;
review of the impact of the application of King IV™;
evaluation of the financial reporting procedures;
review of and recommendation to the board for approval of the
preliminary and annual results announcements and the annual
financial statements and integrated annual report;
approval of the external audit and internal audit plans;
evaluation of the independence and effectiveness as well as the
fees and terms of engagement of the external auditors, including
the suitability of the firm and designated partner;
evaluation of the effectiveness of the chief audit executive and the
outsourced internal audit function; and
assessment of the internal control environment, particularly in
relation to the group’s system on internal financial controls.
Refer to the report of the audit and risk committee on page 03 of the
consolidated financial statements for the year ended 31 March 2018.
The committee is empowered by the board to assess and
approve the broad remuneration strategy for the group, the
operation of the company’s short-term and long-term incentives
for executives and senior management across the group, and
sets short-term and long-term remuneration for the executive
directors and members of the executive committee.
The committee met twice during the year. The Chief Executive Officer
and the group’s Human Resources Director attend the meetings
as permanent invitees, except when issues relating to their own
compensation are discussed.
The scope of the remuneration committee’s work during the year included the following matters:
monitoring executive appointments, terminations and retirements;
determining the general policy on remuneration to ensure fair, competitive and responsible reward;
determining the specific remuneration packages for the executive directors and other senior executives and management;
evaluation of the performance of the Chief Executive Officer;
approving the rules, criteria, targets and allocations for performance-related pay schemes; and
proposing non-executive director remuneration.
Further details of the group’s remuneration policy and the work of the
remuneration committee can be found in the remuneration section on
pages 81 to 88.
Social and ethics committee
The purpose of the committee is to regularly monitor the
company’s activities, having regard to any relevant legislation,
other legal requirements or prevailing codes of best practice
and, in particular, to monitor the group’s compliance with
the applicable requirements of Regulation 43 of the South
African Companies Act in relation to matters pertaining to
social and economic development, good corporate citizenship,
environment, occupational health and public safety, labour
and employment and the group’s code of ethics and sustainable
The committee met twice during the year. The Chief Executive Officer,
the Chief Financial Officer, the group’s Director of Risk, the group’s
Human Resources Director and directors from the majority shareholders
attend the meetings as permanent invitees, along with other directors
and members of management who attend as required.
The work of the social and ethics committee during the year focused
progress in the alignment of the group’s practices to the requirements of the revised BBBEE codes;
disputes with government or regulators;
compliance with regulations;
bribery and corruption;
responsible tourism and responsible gaming;
preferential procurement, socio-economic development and enterprise and supplier development;
environmental management and certification;
customer satisfaction, loyalty, health and safety and consumer protection; and
job creation, employee health and safety, employee development, management diversity, employment equity and employee engagement.
The matters considered during the year are included in the deliver
to our beneficiaries section on pages 45 to 53, the product relevance
to customer experience section on pages 55 to 58, the regulatory
compliance section on page 59 and the human resources section on
pages 60 to 62.
The main area of focus during the year was on the group‘s achievement
of a level 1 BBBEE contributor status against the revised codes for 2018
and continued efforts to improve on this result in the future. The
committee is satisfied with the group’s progress in the different areas
and there were no significant matters of concern raised during the year.
A formal self-evaluation of the performance of the board has been
carried out during the 2017 financial year. No significant matters were
noted apart from the lack of female representation. A formal self-evaluation
of the performance of the board, its committees and the
directors retiring by rotation will be carried out during August 2018
with the assistance of the IoDSA, using its online assessment system.
The board is satisfied with the performance of the Chief Executive
Officer and with the competence of the Chief Financial Officer as set
out in the report of the audit and risk committee on page 03 of the
consolidated financial statements for the year ended 31 March 2018.
The Company Secretary ensures that board procedures and relevant
regulations are fully adhered to. The Company Secretary is not a
director of the company. The directors have unlimited access to the
advice and services of the Company Secretary. The board is satisfied
that the Company Secretary is competent and has the appropriate
qualifications and experience required by the group. The Company
Secretary also acts as secretary for the committees of the board.
GROUP EXECUTIVE COMMITTEE
The board delegates responsibility for determining and implementing
the group’s strategy and managing the group to the Chief Executive
Officer who is supported by the GEC. The committee meets monthly,
participates in the determination of the strategy, coordinates
operational execution of the strategy, ensures effective internal
controls are functioning and that there is an effective risk management
process in operation throughout the group. The members of the GEC
at 15 August 2018 were: