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AAA |
Highest Application |
AA |
High Application |
BB |
Notable Application |
B |
Moderate Application |
C |
Application to be improved |
L |
Low Application |
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Transnet SOC Ltd - 1990/000900/30 |
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Applied / Partially Applied / Not Applied |
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Principle 1.1: The Board provides effective leadership based on ethical foundation |
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Practice: |
Both these statements are correct: - The board sets the values that the entity adheres to; and - These values are documented in the entity's code of conduct. |
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A Board approved Code of Ethics has been implemented throughout the Company. |
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Practice: |
The board ensures that the board's and management's conduct align with the entity values. |
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The Board approved Code of Ethics and Culture Charter are applicable to both the Board and Management. Ethics is a standing agenda item for the Remuneration, Social and Ethics Committee, and Board meetings. Furthermore, one of the four scheduled Remuneration, Social and Ethics Committee meetings is solely dedicated to Ethics related matters. |
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Practice: |
The board promotes the stakeholder-inclusive approach of governance and takes account of the impact of the entity's operations on internal and external stakeholders. |
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The Board has approved the Company's Stakeholder Engagement Policy and Framework. Management reports to the Board on Stakeholder related matters at each Board meeting. |
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Practice: |
Deliberations, decisions and actions of the board are based on fairness, accountability, responsibility and transparency. |
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The Chairperson allows members' views to be considered prior to decision making. |
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Practice: |
Directors, in performing their stewardship role, live the following five moral duties: conscience; care; competence; commitment; courage. |
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The Chairperson allows members' views to be considered prior to decision making. |
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Principle 1.2: The Board ensures that the company is and is seen to be a responsible corporate citizen |
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Practice: |
The board gives adequate consideration to the impact of the entity's operations on society and the environment. |
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The Board annually reports on the Company's sustainability in the Integrated Report and monitors the impact on the environment through its relevant committees. The Company is also a signatory to the UN Global Compact and reports annually on adherence to the envisaged best practice principles. |
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Practice: |
The board pro-actively protects, enhances and invests in the wellbeing of the economy, society and the environment. |
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The Company is a signatory to the UN Global Compact and has extensive Corporate Social Investment Programmes in place. Socio-Economic initiatives form part of the Shareholder's Compact targets. Furthermore, the Company complies with the standards of the Organisation for Economic Co-operation and Development. |
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Practice: |
The board ensures that the entity's performance and its interaction with its stakeholders are guided by the Constitution ,the Bill of Rights and its legislative mandate. |
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The Board approved Stakeholder Engagement Policy and the Procurement Procedures Manual, which is specific to the Company's suppliers, are aligned to the Constitution. |
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Practice: |
Evaluating and managing the risks of doing business in weak governance zones form an important part of the entity's risk management. |
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Practice: |
The board ensures that there is sufficient collaboration with stakeholders to promote ethical conduct and good corporate citizenship. |
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The Code of Ethics, the Whistle Blowing mechanism (Tip-Offs Anonymous Hotline), Integrity pacts and the Culture Charter are some of the instruments used to promote ethical conduct and good citizenship. |
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Practice: |
The board ensures that measurable corporate citizenship programmes and policies are developed and implemented. |
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A Reputation Survey is conducted on an annual basis and reported to the Board |
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Principle 1.3: The Board ensures that the company ethics are managed effectively |
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Practice: |
The board ensures that ethical risks and opportunities are assessed (i.e. identified and evaluated in terms of probability and impact) and that an ethics risk and opportunity profile is compiled. |
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A Fraud Prevention Plan incorporates ethics risks and opportunity forms part of the Annual Internal Audit Plan, which is approved by the Audit Committee. A Fraud Risk Report is tabled across the Board governance structures for monitoring of implementation. |
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Practice: |
The board ensures that the entity's ethics performance is monitored, reported internally and disclosed. |
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The Company's ethics performance is reported to the Remuneration, Social and Ethics Committee, the Board and Shareholder on a quarterly basis, and disclosed in its Integrated Report. |
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Practice: |
The board has ensured that: - a code of conduct and ethics-related policies have been established and implemented; and - the code and policies clearly set out ethical standards. |
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The Board has approved a Code of Ethics which is applicable Company-wide and to the Company's suppliers and Customers. Regular awareness campaigns are conducted across the Company. |
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Practice: |
The board ensures that compliance with the code of conduct is effectively integrated into the strategy and operations of the entity; i.e. the ethical organisational culture is reflected in the entity's vision and mission, strategies and operations, decisions and conduct, and how it treats its internal and external stakeholders. |
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The Board has approved a Code of Ethics which is applicable Company-wide, and to the Company's suppliers and Customers. Regular awareness campaigns are conducted across the Company. Integrity pacts are entered into with suppliers to curb fraud and corruption. Further, the Company has established a Tip-Offs Anonymous hotline which employees and members of the public are encouraged to use . |
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Practice: |
The quality of the entity's ethics performance is disclosed in the integrated report. |
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Principle 2.1: The board acts as the focal point for and custodian of corporate governance |
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Practice: |
The board has a charter that clearly sets out its role and duties. |
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The Board and Committee Mandates are generally reviewed annually for adequacy or as and when required. |
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Practice: |
The board meets at least four times each year. |
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Meetings of the Board are pre-scheduled based on an approved Annual Corporate Calendar. The Board meets at least 6 times a year. |
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Principle 2.2: The Board appreciates that the strategy, risk, performance and sustainability are inseparable |
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Practice: |
The board both informs and approves strategy subject to ultimate approval by the Minister. |
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The Board approves the Company's strategy, which is informed by the Shareholder Minister's Statement of Strategic Intent. The Strategy is formulated into the Company's Corporate Plan that is submitted for noting by the Shareholder Minister on an annual basis. |
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Practice: |
The board satisfies itself that management has thoroughly examined and dealt with all risks affecting strategy and business plans. |
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The Top 10 Strategic Risks are dealt with at the Risk Committee on a quarterly basis and at Board twice a year. The Board approves the Risk Management Framework and the Risk Appetite Statement each year. |
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Practice: |
The board takes adequate steps to ensure that long-term planning results in sustainable outcomes that take into account people, planet and profit. |
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Practice: |
The board ensures that the strategy is aligned with all of the following: - the purpose of the entity: - the value drivers and legislative mandate of its business; and - the legitimate interests and expectations of its stakeholders. |
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The Shareholder Minister's Statement of Strategic Intent forms a major part of the Shareholders Compact. The Shareholder's Compact targets inform the Corporate Plan which is translated into the Balanced Score Card. |
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Practice: |
Strategy implementation meets both of the following conditions: - Strategy is translated into key performance and risk areas that include finance, ethics, compliance and sustainability; and - The associated performance and risk measures are adequately identified and clear. |
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All those elements are dealt with in the Corporate Plan and Shareholder Compact. |
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Practice: |
The board views sustainability as a business opportunity; i.e. long-term sustainability is considered when strategy is formulated and it guides strategy-setting. |
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Long term sustainability is one of the key elements of the Company's Strategy and is monitored through the Shareholder's Compact. Oversight is also provided through the Sustainability Report, which is presented and discussed at the Remuneration, Social and Ethics Committee meetings half-yearly. |
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Principle 2.14: The Board and its directors act in the best interests of the company |
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Practice: |
Both these statements are true: - Directors are permitted to take independent advice related to their duties; and - The entity will pay for such advice if the board approved procedure has been followed. |
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This is also included in the Board and Committee Mandates. |
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Practice: |
Real or perceived conflicts of interest are both: - disclosed to the board; and - when disclosed, managed appropriately. |
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The management of Conflicts of Interest is stipulated in the Memorandum of Incoporation, Board and Committee Mandates and the Declaration of Interests and Related Party Disclosures Policy for Directors. |
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Practice: |
The board has unrestricted access to all entity information, records, documents and property if it follows the board approved process. |
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The Protocol is stipulated in the Board and Committee Mandates. |
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Principle 2.16: The Board has elected a chairman of the board who is an independent non executive director. The CEO of the company does not also fulfil the role of chairman of the Board. |
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Practice: |
The chairman is an independent non-executive director or in the alternative, a lead independent director has been appointed. |
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Practice: |
The chairman has not been the CEO of the entity in the last three years. |
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Practice: |
The chairman is appointed by the board every year or if required by legislation, the Minister appoints. |
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In line with the Memorandum of Incorporation, the Chairperson is appointed by the Shareholder Minister and not the Board. The appointment is renewable annually at the AGM |
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Practice: |
The chairman's ability to add value, and his or her performance against what is expected of this role and function, is assessed every year. |
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Through the independent Board Evaluation process. |
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Practice: |
A clear, written role description exists for the chairman. |
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The Chairperson executes his/her role in accordance with the King III Code and Standards. The role of the Chairperson is contained in various governance instruments such as the Company's Memorandum of Incorporation and the Board of Directors' Mandate. |
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Practice: |
There is succession planning in place for the chairman. |
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This is conducted by the Shareholder Minister and not the Company. |
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Practice: |
The entity discloses whether the chairman is an independent non-executive director, and if not, the reason for this. |
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This is disclosed in the Integrated Report. |
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Practice: |
The chairman of the board is not the chairman of the remuneration committee. |
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Practice: |
The nominations committee oversees a formal succession plan for the board, CEO and certain senior executive appointments. |
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The Committee is responsible for the formal succession plan of the Board and executive directors. The Remuneration, Social and Ethics Committee oversees the formal succession plan for certain senior executive appointments. |
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Principle 2.17: The Board has appointed the Chief Executive Officer and has established a framework for the delegation of authority |
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Practice: |
The board appoints the CEO or if required by legislation the Minister appoints. |
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The Board of Directors recommends the appointment of the Group Chief Executive and the Shareholder Minister makes the final appoinment. |
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Practice: |
The board contributes to decisions about senior executive appointments. |
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The appointment of Senior Executives, other than Executive Directors, has been delegated to the Group Chief Executive, in consultation with the Chairpersons of the Corporate Governance and Nominations Committee and the Remuneration, Social and Ethics Committee. |
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Practice: |
The board defines its own level of materiality and approves a framework for the delegation of authority. |
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The Shareholder defines the level of materiality, whilst the Board approves the delegation of authority framework. |
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Practice: |
The role and function of the CEO are clearly formulated in writing. |
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Practice: |
The CEO is not a member of the remuneration committee. |
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Executive Directors are not members of the Board Committees. |
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Practice: |
The CEO is not a member of the audit committee. |
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The Executive Directors are not members of the Statutory Board Committees. |
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Practice: |
The CEO is not a member of the nomination committee. |
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The Executive Directors are not members of the Statutory Board Committees. |
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Practice: |
There is a formal succession plan in place for the CEO and other senior executives. |
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The Company conducts an annual talent management exercise in accordance with the Performance Management Policy. The outcome of the exercise is considered by the Remuneration, Social and Ethics Committee, Corporate Governance and Nominations Committee and the Board of Directors for noting purposes. |
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Practice: |
There is an appropriate benchmark; i.e. agreed performance measures, in place to evaluate the performance of the CEO. |
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The Group Chief Executive's balanced scorecard is tabled at Board on an annual basis for noting purposes. The Group Chief Executive is assessed by the Board Chairperson with assistance from the Chairperson of the Remuneration, Social and Ethics Committee. |
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Principle 2.18: The Board comprises a balance of power, with a majority of non executive directors. The majority of non executive directors are independent. |
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Practice: |
The classification of directors as independent or otherwise in the integrated report is disclosed on the basis of a yearly assessment of the independence of the non-executive directors. |
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Practice: |
The board comprises a majority of non-executive directors. |
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The Company's MoI provides that the Board will consist of a maximum of 14 Directors. The Company has 11 Directors at present, of which 9 are independent non-executive Directors, including the Chairperson of the Board. |
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Practice: |
A majority of the non-executive directors on the board is independent. |
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Practice: |
The board has a minimum of two executive directors, consisting of the CEO and the director responsible for finance or CFO. (Only applicable to major public entities) |
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Practice: |
When determining the number of directors to serve on the board, the entity (or the Minister as applicable) considers the knowledge, skills and resources that are necessitated by the size and nature of its business. |
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The Corporate Governance and Nominations Committee compiles a Board skills matrix for consideration by the Shareholder Minister as part of Non-Executive Directors' succession planning activities. |
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Practice: |
The board has considered whether its size, diversity and demographics make it effective. |
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As part of the annual Board Evaluation process, the Board considers the skills required to effectively execute their duties. Any gaps identified are communicated to the Shareholder Minister. |
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Practice: |
Independent non-executive directors serving for longer than nine years are subjected to a rigorous review of their independence and performance by the board. |
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Independent Non-Executive Directors at Transnet do not serve longer than 9 years. |
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Practice: |
The board, through the nomination committee, recommends whether retiring non-executive directors should be eligible for re-election based on past performance, contribution and the objectivity of business decisions. |
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Practice: |
Non-executive directors that are classified as 'independent' by the entity are subjected to an annual evaluation of their independence by the chairman and the board. |
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Conisderation is being made to include this aspect as part of the peer reviews. |
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Practice: |
The nominations committee makes recommendations for appointment as director based on all of the following: - knowledge and experience gap on the board; - integrity of the candidate; and - skills and capacity of the candidate.
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The Shareholder appoints the Board members. |
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Practice: |
There is reporting on the procedure and outcome of the assessment of the suitability of non-executive independent directors to continue serving on the board for longer than the period per applicable legislation. |
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Principle 2.19: Directors are appointed through a formal process |
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Practice: |
The integrated report classifies directors as executive, non-executive or independent and provides information about individual directors that shareholders may need to make their own assessments in regard to all of the following: - independence; - education, qualification and experience; - length of service and age; - significant other directorships; - political connections; and - other relevant information. |
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This is included in the governance section of the Integrated Report.with the exception of political connections. |
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Practice: |
Reasons for the removal, resignation or retirement of directors are provided in the integrated report. |
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Practice: |
Procedures for appointments to the board are all of the following: - formally set out in a policy; - transparent; and - a matter for the board as a whole(although the board may be assisted by the nomination committee) or the Minister as applicable. |
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The Board of Directors is appointed by the Shareholder Minister. |
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Practice: |
Before candidates are nominated for board appointments, there are procedures in place to investigate the candidates' backgrounds or legal exclusions from membership inspected and applied. |
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The fit and proper test is conducted by the Shareholder Minister. |
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Practice: |
Non-executive directors* agree all of the following in their letters of appointment: - the directors' code of conduct; - the duties that are expected from each director; - the remuneration for holding office as director; and - the terms of directors' and officers' liability insurance.
* It should be noted that the terms "director", "directors", "member of the board" and "members of the board" are used interchangeably and convey the same meaning as those persons represented on the board. |
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Practice: |
The integrated report gives details of both directors' appointment procedures, and the composition of the board. |
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This is included in the governance section of the Integrated Report. |
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Practice: |
The entity discloses: - the number of meetings held each year by the board and each board committee; and - which meetings each director attended (as applicable). |
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Practice: |
The nominations committee identifies and participates in selecting board members. |
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The Shareholder Minister appoints the Board members. |
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Practice: |
The nominations committee establishes procedures for appointments to the board and ensures that these are properly carried out. |
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The Shareholder appoints the Board members. |
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Practice: |
The nominations committee ensures that new directors have not been declared delinquent or are not serving probation in terms of section 162 of the Companies Act, 2008. |
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The fit and proper test of Directors is conducted by the Shareholder Minister. |
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Principle 2.20: The induction of and ongoing training, as well as the development of directors are conducted through a formal process |
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Practice: |
The board ensures that inexperienced directors are developed through mentorship programmes. |
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The Company has an approved continuous training plan for the Board of Directors that includes various training initiatives. Directors are encouraged to register with the IoDSA. |
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Practice: |
The board ensures that continuing professional development programmes are implemented. |
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Various training programmes, including those provided by external service providers are incorporated in the Board of Directors' continuous training plan. |
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Practice: |
The board ensures that directors receive regular and adequate briefings on changes in risks, laws and the business environment. |
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This is done through management reports that are sent to the Board in preparation for Board meetings. Further, the Board and Committee agendas have standing items on risk, legal and regulatory matters. Developments in these areas are circulated to the Board and Group Executive Committee by the Group Company Secretary through the Compliance Handbook. Furthermore, internal training is provided on recent promulgated legislation.
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Practice: |
The content of the induction programme for new directors addresses both of the following: - It familiarises new directors with the entity's operations, business environment, and relevant sustainability issues; and - It introduces new directors to members of senior management and their individual duties and responsibilities. |
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In addition to this, Group Company Secretariat has introduced a Directors' Toolkit as an induction tool for Board members. The Toolkit comprises, amongst others:
The Company's Memorandum of Incorporation;
The Delegation of Authority Framework;
The Board and Committees' Mandates; and
The current Shareholder's Compact.
The Directors' Toolkit is updated on an annual basis. Furthermore, site visits are conducted to familiairse Directors with Operations and stakeholders. |
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Practice: |
The development of an induction programme for new directors meets both the following requirements: - It is tailored to the needs of both the entity and the new director; and - It enables new directors to contribute effectively as quickly as possible. |
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The Company has a Directors' Toolkit which is updated on an annual basis.Furthermore, site visits are conducted to familiarise Directors with Operations and stakeholders. |
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Principle 2.21: The Board is assisted by a competent, suitably qualified and experienced company secretary. |
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Practice: |
The entity secretary is empowered by the board to effectively perform his or her duties. |
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Practice: |
The board is entitled to both appoint and remove the entity secretary. |
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The appointment and removal of the Company Secretary is provided for in the Memorandum of Incorporation and Board Mandate. |
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Practice: |
The entity complies with the provisions of the Companies Act, 2008 in relation to the appointment and removal, and the duties allocated to the entity secretary or if the entity is not a entity complies with the best practice as stipulated in the Companies Act, 2008. |
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The appointment and removal of the Company Secretary is provided for in the Memorandum of Incorporation and Board Mandate, and the duties are aligned with the Companies Act. |
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Practice: |
The role and function of the entity secretary are clearly formulated in writing. |
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The Company Secretary has a written Role Description. |
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Principle 2.22: The evaluation of the Board, its committees and individual directors is performed every year. |
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Practice: |
To determine the remuneration of the CEO and other executive directors, the remuneration committee considers the results of the evaluation of their performance, both as a directors and as executives. |
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The Chairpersons of the Board and Remuneration, Social and Ethics Committee jointly conduct the performance assessment of the Group Chief Executive. |
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Practice: |
The nominations committee oversees the process and reviews the results of the evaluation of the performance and independence of individual directors, the board and board committees. |
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An independent assessment is conducted annually. |
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Practice: |
The nominations committee comprises the board chairman and non-executive directors. |
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Practice: |
In so far as the role, function and duties of the board, the board committees and individual directors are concerned, there are performance criteria in place that serve as a benchmark for performance appraisals. |
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The Shareholder's Compact, sets out the Company's Key Performance Indicators and targets with timelines; the Board and Committees assessments; and the individual peer reviews serve as a benchmark for performance. |
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Practice: |
Yearly evaluations of the board's, board committees' and individual directors' performance are performed. |
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The annual board evaluations are conducted by an independent service provider. |
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Practice: |
The results of performance evaluations are constructively used to identify training and development needs for directors. |
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The continuous training plan incorporates training and development needs identified during the annual board evaluations. |
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Practice: |
The nomination for re-appointment of a director only occurs after an evaluation of the performance of the director. |
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Generally, the results of the evaluation are reported to the Shareholder Minister. The appointment of the Board of Directors is at the discretion of the Shareholder Minister. |
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Practice: |
Assessment of the performance of the CEO and other executive directors as employees takes place every year and the results of this assessment affect remuneration. |
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The performance of the Group Chief Executive is assessed by the Chairperson of the Board with assistance from the Chairperson of the Remuneration, Social and Ethics Committee, whilst the performance of the other executive director is assessed by the Group Chief Executive. |
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Practice: |
The integrated report discloses all of the following: - an overview of the appraisal process of the board, board committees, individual directors; - the results of this appraisal process; and - action plans emanating from results of the appraisal. |
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This is included in the Governance Section of the Integrated Report. |
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Principle 2.23: The Board delegates certain functions to well-structured committees without abdicating from its own responsibilities. |
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Practice: |
The risk committee's terms of reference have been approved by the board and are reviewed every year. |
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The Risk Committee Mandate is reviewed annually or as and when required. |
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Practice: |
The risk committee's terms of reference deal adequately with all of the following: - composition; - objectives, purpose and activities; - delegated authorities - including the extent of power to make decisions; - tenure; and - reporting mechanism to the board. |
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Practice: |
The risk committee is entitled to obtain independent professional advice on any issue within its scope and the entity will pay for such advice if the board approved procedure has been followed. |
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This is provided in the Mandate and is done through the Office of the Group Company Secretary. |
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Practice: |
There is a board remuneration committee. |
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In Transnet, the Committee is referred to as the Remuneration, Social and Ethics Committee. |
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Practice: |
The remuneration committee terms of reference deal adequately with all of the following: - composition; - objectives, purpose and activities; - delegated authorities - including the extent of power to make decisions; - tenure; and - reporting mechanism to the board. |
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Practice: |
The remuneration committee is entitled to obtain independent professional advice on any issue within its scope and the entity will pay for such advice if the board approved procedure has been followed. |
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This is provided for in the Mandate and is done through the Office of the Group Company Secretary. |
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Practice: |
All members of the remuneration committee are non-executive directors and a majority of the members is independent. |
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All the Committee members are independent, non-executive directors. |
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Practice: |
The remuneration committee is chaired by an independent director. |
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Practice: |
There is a board nomination committee. |
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In Transnet, the Committee is referred to as the Corporate Governance and Nominations Committee. |
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Practice: |
The nominations committee's terms of reference have been approved by the board and are reviewed every year. |
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This Mandate is reviewed on an annual basis or as and when required |
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Practice: |
The nominations committee terms of reference deal adequately with all of the following: - composition; - objectives, purpose and activities; - delegated authorities - including the extent of power to make decisions; - tenure; and - reporting mechanism to the board. |
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Practice: |
Both of the following are disclosed in the integrated report regarding each board committee: - composition; and - role and mandate. |
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Practice: |
The names and details of all external advisers who regularly attend or are invited to attend committee meetings are disclosed. |
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External advisors are generally not invited to Committee meetings. |
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Practice: |
The risk committee is chaired by a non-executive director. |
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Practice: |
The audit committee terms of reference deal adequately with all of the following: - composition; - objectives, purpose and activities; - delegated authorities - including the extent of power to make decisions; - tenure; and - reporting mechanism to the board. |
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Practice: |
The audit committee is entitled to obtain independent professional advice on any issue within its scope and the entity will pay for such advice if the board approved procedure has been followed. |
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This is provided in the Audit Committee's Mandate and is done through the Office of the Company Secretary. |
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Practice: |
The majority of members of the nominations committee consists of non-executive directors and a majority of the non-executive directors is independent. |
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All the Committee members are independent, non-executive directors. |
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Practice: |
The nomination committee is entitled to obtain independent professional advice on any issue within its scope and the entity will pay for such advice if the board approved procedure has been followed. |
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This is provided for in the Mandate and is done through the Office of the Group Company Secretary. |
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Principle 2.24: A governance framework has been agreed upon between the group and its subsidiary Boards |
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Practice: |
There is a governance framework between the holding entity and its subsidiary or divisional boards. (Only applicable to entities within a group.) |
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The Company does not have any active subsidiaries or divisional boards and therefore there is no governance framework in place. |
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Practice: |
There are formal policies and practices in place to ensure equal treatment of subsidiaries or divisions within the group. (Only applicable if holding entity in group.) |
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Practice: |
Implementation and adoption of the holding entity's governance policies, processes or procedures are considered and approved. (Only applicable if a subsidiary entity or division in group.) |
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Practice: |
The holding entity that appoints a director to represent its interests on the board of a subsidiary entity or division respects the fiduciary duty of that director to the subsidiary entity or division. (Only applicable to entities within a group.) |
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Practice: |
The integrated report provides details of the implementation and adoption of the holding entity's governance policies, processes or procedures. (Only applicable if a subsidiary entity.) |
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Practice: |
The holding entity board consults with the chairman of the board of the subsidiary entity or division and its nomination committee prior to nominating a representative director. (Only applicable to entities within a group.) |
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Principle 2.25: The company remunerates its directors and executives fairly. |
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Practice: |
Remuneration policies and practices are both: - aligned with entity strategy; and - linked to individual performance. |
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Practice: |
Incentives are based on targets that are both: - related to both finances and sustainability; and - stretching, verifiable and relevant. |
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Practice: |
Remuneration policies and practices are in place that adequately address all of the following: - base pay and bonuses; - termination of employee contracts; and - severance and retirement benefits; and - long-term incentive schemes. |
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Practice: |
More than one performance measure is used for the award of incentives to avoid manipulation of results or poor business decisions. |
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Practice: |
Remuneration levels reflect the contribution to entity performance by senior executives. |
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Practice: |
Incentives for long-term and short-term goals meet both of the following conditions: - Incentives are different for long-term and short-term goals; and - There is a balance between rewarding short-term and long-term goals. |
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Practice: |
Employment contracts do not commit the entity to pay on termination if the termination arises from an executive's failure. |
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Practice: |
There is no automatic entitlement to bonus payments on early termination of employment. |
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This is in line with the Ground Rules for Short and Long Term Incentive Schemes respectively. |
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Practice: |
Participation in the entity's long-term incentive schemes is subject to both of these conditions: - It is limited to employees and executive directors; and - It provides appropriate limits for individual participation. (Only applicable if the entity has established long-term incentive schemes.) |
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Practice: |
The value of incentives is not significant compared to base pay. |
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The value of incentives is governed by the Ground Rules for Short Term and Long Term Incentive Schemes. |
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Practice: |
There is not automatic vesting of long-term incentives (although pro rating the benefit based on time and performance may be considered) in the event of the following: - early termination of employment; and - dismissal for good cause. (Only applicable if the entity has established long-term incentive schemes.) |
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Practice: |
Non-executive directors' fees comprise both a base fee and an attendance fee per meeting. |
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The Company pays a retainer for the Board and its Committees on a quarterly basis. |
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Practice: |
Shareholders approve non-executive directors' fees in advance by special resolution or if not a company it is approved by the Minister. |
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Practice: |
Incentive schemes to encourage retention are established separately, or are clearly distinguished, from those to reward performance and details thereof are disclosed in the remuneration report. (Only applicable if the entity uses incentive schemes for retention purposes.) |
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The Company has a Board approved Long-Term Incentive Scheme. |
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Practice: |
The remuneration committee's terms of reference have been approved by the board and are reviewed every year. |
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The Remuneration, Social and Ethics Committee Mandate is reviewed annually or as and when required. |
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Practice: |
The remuneration committee assists the board in setting and administering remuneration policies for all levels in the entity but focuses on the remuneration of executive directors and other senior executives, and non-executive directors. |
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Practice: |
The remuneration committee ensures that the mix of fixed and variable pay (in cash and other elements) meets the entity's needs and strategic objectives. |
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This is according to the approved Remuneration Policy. |
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Practice: |
The remuneration committee satisfies itself on the accuracy of recorded performance measures that govern vesting of incentives. |
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The Committee reviews the Transnet Ground Rules for Incentives. |
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Practice: |
The remuneration committee ensures that all benefits, including retirement benefits and other financial arrangements, are both justified and correctly valued. |
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Assurance over the calculation of the incentives and retirement benefits is provided by Transnet Internal Audit. |
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Practice: |
The remuneration committee selects an appropriate comparative group when determining remuneration levels. |
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A benchmark exercise on remuneration levels is conducted by an independent service provider. |
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Practice: |
The remuneration committee ensures that remuneration levels reflect the contribution of senior executives and executive directors to entity performance. |
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This is done in terms of the Performance Management Policy. |
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Practice: |
The remuneration committee regularly reviews incentive schemes to ensure their continued contribution to shareholder value. |
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The incentives are based on achievement of the Shareholder's Compact targets. |
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Practice: |
The remuneration committee advises on the remuneration of non-executive directors. |
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The Committee recommends the Directors Remuneration to the Shareholder for approval at the AGM. |
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Practice: |
The remuneration report includes details of limits for participation in incentive schemes. |
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The criteria is set out in the ground rules of the LTI scheme. |
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Practice: |
The remuneration report includes details of the main performance parameters or targets for threshold, expected and beyond expectation performance of executive directors and other senior executives. |
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This is included in the Integrated Report. |
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Principle 2.26: The company has disclosed the remuneration of each individual director and prescribed officer. |
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Practice: |
A remuneration report is included in the integrated report. |
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Practice: |
The remuneration report includes details of all benefits paid and awarded to individual directors. |
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Directors do not receive benefits from the Company. They only receive directors' fees. |
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Practice: |
The remuneration report includes the remuneration and benefits of the three most highly-paid employees who are not directors. |
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The Remuneration Report details the remuneration packages of the Prescribed Officers. |
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Practice: |
The remuneration report includes an overview of the policy on base pay. |
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Practice: |
The remuneration report includes details about the use of comparative benchmarks for setting remuneration levels. |
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Practice: |
The remuneration report includes justification of a policy to pay salaries on average above the median of the benchmark used for setting the remuneration levels. (Only applicable if the entity does pay salaries above the median.) |
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Practice: |
The remuneration report includes details of material payments that are ex gratia in nature. (Only applicable if the entity made material payments that are ex gratia in nature.) |
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Practice: |
The remuneration report includes the term of executive service contracts as well as the notice period for termination. |
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Practice: |
The remuneration report discloses both the nature and period of restraint provided for in executive service contracts. |
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Practice: |
The remuneration report discloses the non-executive directors' fees, including fees for serving on a board committee. |
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This is included in the governance section of the Integrated Report. |
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Principle 3.1: The Board has ensured that the company has an effective and independent audit committee |
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Practice: |
The entity has an audit committee. |
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Practice: |
The audit committee's terms of reference have been approved by the board and are reviewed every year. |
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The Audit Committee's Mandate is reviewed annually or as and when necessary. |
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Practice: |
The audit committee meets at least twice a year. |
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The Audit Committee meets quarterly. |
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Practice: |
At least once a year, the audit committee meets with the external and internal auditors without management being present. |
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Practice: |
The nominations committee presents the shareholder or the board with suitable candidates for election as audit committee members. |
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Principle 3.2: Audit committee members are suitably skilled and experienced independent non-executive directors |
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Practice: |
Audit committee members collectively have a thorough understanding of the complexities of International Financial Reporting Standards, South African Statements of Generally Accepted Accounting Practice, Global Reporting Initiative Standards, or any other financial reporting framework and set of standards applicable. |
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The Audit Committee has the mix of skills, qualifications and expertise to understand the applicable reporting financial standards and principles. However financial skills require enhancement. |
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Practice: |
If vacancies on the audit committee arise, the board will elect a replacement as and when the need arises. |
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Vacancies on the Audit Committee are filled by the Shareholder. The election is considered at the next Annual General Meeting or as and when necessary. |
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Practice: |
The integrated report summarises the role and duties of the audit committee. |
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Practice: |
It is disclosed in the integrated report whether the audit committee has adopted a formal terms of reference. |
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The Committee has a formal Board approved Mandate. |
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Practice: |
The integrated report discloses whether the audit committee has satisfied its responsibilities for the year in accordance with the formal terms of reference. |
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This is disclosed in the Audit Committee Report in the Integrated Report. |
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Practice: |
The integrated report discloses the names and qualifications of all members of the audit committee during the period under review, and the period that each member has served on the committee. |
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These are disclosed in the Governance Section of the Integrated Report. |
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Practice: |
The integrated report includes information about duties that the board has assigned to the audit committee. |
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This is included in the Summary of the Audit Committee's Mandate included in the Govenance Section of the Integrated Report. |
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Practice: |
The audit committee includes in the integrated report both the following: - a statement on whether or not it considered and recommended the internal audit charter for approval by the board; and - a description of its working relationship with the Chief Audit Executive. |
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This is included in the Audit Committee Report in the Integrated Report. |
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Practice: |
The board or if the entity is a company, the shareholder elects the audit committee members . |
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Practice: |
The nominations committee evaluates whether audit committee members collectively have the required level of qualifications and experience. |
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The Corporate Governance and Nominations Committee reviews the skills matrix and recommends the Audit Committee members to the Shareholder for election. |
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Practice: |
The audit committee consists of at least three members. |
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This is detailed in the Audit Committee Mandate. |
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Practice: |
All members of the audit committee are independent non-executive directors. |
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Practice: |
Audit committee members collectively have knowledge and experience of financial risks, financial and sustainability reporting, and internal controls. |
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Financial Skills require enhancement. |
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Practice: |
Audit committee members collectively have knowledge and experience of corporate law. |
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Principle 3.4: The audit committee oversees integrated reporting |
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Practice: |
The audit committee recommends the integrated report to the board for approval. |
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The Audit Committee recommends the Audited Financial Statements together with the Integrated Report for Board approval. |
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Practice: |
The audit committee is informed where there is disagreement on auditing or accounting matters between the management and the external auditors. |
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This is included in the Statement of Summary of Audit Differences. Further, the Audit Committee convenes closed sessions with External Auditors as and when necessary. |
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Practice: |
The audit committee has regard to all factors and risks that may affect the integrity (i.e. accuracy and reliability of information) of the integrated report, including the following: - judgements; - changes in accounting policies; - significant or unusual transactions; - factors that may predispose management to present misleading information; and - any evidence that brings into question any previously published financial information, etc. |
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The External Audit Reports, Internal Audit Reports and any other reports presented to the Audit Committee provide the information as and when it occurs. |
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Practice: |
The audit committee reviews a written assessment (documented by management) of the going concern premise of the entity. |
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The Going Concern Assertion is considered by the Audit Committee on a quarterly basis, and on a half-yearly basis by the Board. |
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Practice: |
The audit committee recommends to the board whether the external auditor should perform assurance procedures on interim results and review the results of such engagement. |
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This is done as part of the External Auditors' Scope. |
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Practice: |
The audit committee reviews the content of summarised information for whether it provides a balanced view of the entity's information. |
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The Audit Committee evaluates the appropriateness of the reports provided by the various assurers and management. |
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Practice: |
The audit committee engages the external auditors to provide assurance on the summarised financial information. |
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Rigorous engagements occur regularly. |
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Practice: |
The audit committee recommends to the board to engage an external assurance provider over material elements of the sustainability reporting within the integrated report. |
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Practice: |
The audit committee evaluates both the independence and quality of the external providers of assurance on sustainability. |
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This is conducted on a 5 yearly basis through the Auditor-General's Office. |
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Practice: |
The audit committee reviews the disclosure of sustainability issues in the integrated report to ensure that it is both reliable and not in conflict with the financial information. |
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Principle 3.6: The audit committee is satisfied with the expertise, resources and experience of the company’s finance function. |
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Practice: |
The integrated report discloses the results of the audit committee's evaluation of both the finance director and the finance function. |
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This is included in the Integrated Report. |
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Practice: |
The audit committee does both of the following: - considers and satisfies itself of the suitability of the expertise and experience of the financial director every year; and - reviews the finance function every year. |
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The Audit Committee assesses the Chief Financial Officer's and Finance Function's performance on an annual basis. |
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Principle 3.7: The audit committee oversees the internal audit function |
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Practice: |
The audit committee is responsible for the appointment, performance assessment and dismissal of the Chief Audit Executive or outsourced internal audit service provider. |
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The Chief Audit Executive reports functionally to the Audit Committee. |
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Practice: |
The internal audit plan is approved by the audit committee. |
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It is tabled and approved annually. |
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Practice: |
The audit committee ensures that the company's internal audit function both: - is independent; and - has the necessary resources, standing and authority within the entity to enable it to discharge its functions. |
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The Chief Audit Executive accounts to the Audit Committee and tables a report to various Board Committees. |
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Practice: |
The audit committee oversees cooperation between external and internal audit to avoid overlap of audit scope. |
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This is conducted through the review of the respective scopes. |
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Practice: |
The audit committee ensures that the internal audit function goes through an independent quality review in line with Institute of Internal Auditors' standards or whenever it considers it appropriate. |
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Independent quality assurance review is conducted on a 5 yearly basis or as when required. |
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Principle 3.8: The audit committee is an integral component of the risk management process. |
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Practice: |
Both these statements are correct: - In the integrated report, the audit committee makes a statement on the effectiveness of the system of internal financial controls; and - This statement is based on a formal documented review performed by internal audit as well as reports from other assurance providers, management and the external auditors. |
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Practice: |
The audit committee discloses in the integrated report the nature and extent of material weaknesses in the design, implementation or execution of financial controls that resulted in material financial loss, fraud or material errors. (Only applicable in the event that there has been material financial loss, fraud or material errors resultant from weakness in financial controls.) |
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This is disclosed in the Audit Committee Report. |
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Practice: |
There is a board committee (either a risk committee or the audit committee) that assists the board in carrying out its risk responsibilities. (Further questions will refer to a risk committee, even if the audit committee carries out this function.) |
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A Risk Committee is constituted. |
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Practice: |
The risk committee oversees the entity's risk management function. |
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Various Business Risk Reports are tabled at the Risk Committee meetings quarterly. |
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Practice: |
The terms of reference of the audit committee set out its responsibilities for risk management. |
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The Mandate of the Audit Committee is aligned to the Risk Committee Mandate to avoid duplication. |
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Practice: |
The audit committee oversees all of the following: - financial reporting risks; - internal financial controls; - fraud risks related to financial reporting; and - IT risks related to financial reporting. |
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These activities are carried out as per the Audit Committee Mandate. |
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Principle 3.9: The audit committee is responsible for the recommending the appointment of the external auditor and overseeing the external audit process. |
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Practice: |
The audit committee recommends to Board the appointment, reappointment and removal of the external auditor. (Only applicable where the Auditor General is not performing the audit.) |
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This is carried out as per the Audit Committee Mandate. |
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Practice: |
The audit committee approves both the external auditor's terms of engagement and remuneration. |
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This is carried out as per the Audit Committee Mandate. |
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Practice: |
The audit committee monitors and reports on the external auditor's independence. |
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Practice: |
The audit committee has defined a policy for non-audit services provided by the external auditor. |
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Non-Audit Service are approved as part of the Annual Internal Audit Plan. |
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Practice: |
The audit committee reviews any accounting and auditing concerns identified as a result of the internal or external audit. |
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The concerns are presented in the Audit Committee meetings through reports and actions emanating from the discussions are dealt with accordingly. |
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Practice: |
The audit committee is informed of Reportable Irregularities identified and reported by the external auditor in terms of the Auditing Profession Act. |
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This is submitted through the External Auditor's Report. |
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Practice: |
The audit committee reviews the quality and effectiveness of the external audit process. |
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This is carried out as per the Audit Committee Mandate. |
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Principle 3.10: The audit committee has reported to the board and the shareholders as to how it has discharged its duties. |
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Practice: |
The integrated report describes how the audit committee carried out its functions during the period under review. |
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It is disclosed in the Audit Committee Report in the Integrated Report. |
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Practice: |
The integrated report includes a statement on whether the audit committee is satisfied that the auditor is independent of the entity. |
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The statement is included in the Audit Committee Report in the Integrated Report. |
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Practice: |
The integrated report includes commentary by the audit committee on all of the following: - the financial statements; - the accounting practices; and - the internal financial controls of the entity. |
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The commentary is included in the Intergrated Report. |
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Practice: |
The audit committee reports internally to the board both on its statutory duties and on those duties that the board assigns to it. |
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The Audit Committee Chairperson reports to the Board on a quarterly basis, on both its statutory duties and other activities. |
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Practice: |
The audit committee reports to the shareholder on all of its statutory duties. (Only applicable to if the entity is a company.) |
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The Audit Committee reports to the Shareholder at the Company's Annual General Meeting. Representatives of the Auditor General's Office attend Audit Committee Meetings and have access to the information presented at meetings. |
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Principle 4.1: The Board is responsible for the governance of risk. |
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Practice: |
A policy and a plan that provide for an effective system and process of risk management have been developed and approved by the board. |
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The Risk Management Framework is reviewed annually together with the Risk Appetite Statement. Further, the Board reviews and approves the Financial Risk Management Framework and the Fraud Prevention Plan on an annual basis. |
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Practice: |
The board's responsibility for risk governance is set out in both the board charter and risk policy and plan. |
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The responsibility for risk governance is set out in both the Board and Risk Committee Mandates. |
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Practice: |
The risk policy includes all of the following: - the entity's definitions of risk terms and risk management; - risk management objectives; - the risk approach and philosophy; and - the various responsibilities and ownership for risk management within the entity. |
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The overarching Risk Management Strategy and Framework that incorporates the entity's definitions, and related policies and objectives is approved by the Board. |
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Practice: |
The risk plan includes all of the following: - the entity's risk management structure; - the risk management framework; i.e. the approach followed (for example, COSO, ISO, IRMSA ERM Code of Practice, IRM (UK), etc); - the standards and methodology adopted; i.e. the measureable milestones (for example, tolerances, intervals, frequencies, frequency rates, etc); - risk management guidelines; - reference to integration of risk (for example, communication, training and awareness programmes); and - details of the assurance and review of the risk management process. |
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The overarching Risk Management Strategy and Framework that incorporates the entity's definitions, and related policies and objectives is approved by the Board. |
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Practice: |
The integrated report discloses details of how the board has satisfied itself that risk assessments, responses and interventions are effective. |
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This is included in the Directors' Report in the Integrated Report. |
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Principle 4.2: The Board has determined the levels of risk tolerance |
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Practice: |
The board sets the levels of risk tolerance every year. |
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A Risk Appetite Statement aligned to the Shareholder's Compact target is approved by the Board annually. |
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Practice: |
The board monitors that risks are taken within the entity's tolerance and appetite levels. |
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Risk Assessments (including programme/project related risk assessments) are reported to the Board and its Committees on a regular basis for information and monitoring purposes. |
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Practice: |
The entity discloses in the integrated report details of where the limits of risk appetite (willingness to tolerate risk) exceed, or deviate materially from, the limits of the company's risk tolerance (ability to tolerate risks). (Only applicable in the event that the company's risk appetite exceeded its risk tolerance levels.) |
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The Company has not exceeded its risk tolerance levels. |
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Principle 4.3: The risk committee and/or audit committee has assisted the Board in carrying out its risk responsibilities. |
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Practice: |
The risk committee considers the risk policy and plan. |
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The Risk Management Strategy and Framework and Plan are reviewed. |
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Practice: |
The risk committee monitors the whole risk management process. |
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The Regulatory and Risk Report is tabled at the Risk Committee meetings quarterly. |
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Practice: |
The risk committee adequately reviews all of the following: - the risk management progress and maturity of the entity; - the effectiveness of risk management activities; - the key risks facing the company; and - the responses to address these key risks. |
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The Risk Committee adequately reviews the said areas with the assistance of Transnet Internal Audit. |
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Practice: |
Both the following statements are true: - Membership of the risk committee includes executive and non-executive directors; and - Members of senior management and independent risk management experts are invited to attend, if necessary. |
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Practice: |
The risk committee has at least three members. |
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Practice: |
The risk committee members collectively have adequate and appropriate knowledge, skills and experience in risk. |
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Principle 4.4: The Board has delegated to management the responsibility to design, implement and monitor the risk management plan. |
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Practice: |
The board's risk policy and plan is effectively implemented by management through risk management systems and processes. |
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A risk management system that is aligned to the Risk Management Strategy and Framework within the Company has been implemented. |
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Practice: |
A Chief Risk Officer (CRO) or other senior employee responsible for risk management has been appointed and meets both the following requirements: - The CRO or senior employee is a suitably experienced person; and - The CRO or senior employee has access to and regular interaction on strategic matters with the board or appropriate board committee, and executive management. |
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The role of the Chief Risk Officer is fulfilled by the Chief Corporate and Regulatory Officer, who is a member of the Group Leadership Team and an attendee at the Risk Committee meetings. |
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Principle 4.5: The Board has ensured that risk assessments are performed on a continual basis. |
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Practice: |
The board ensures that effective and ongoing risk assessments (i.e. identification and evaluation of risks in terms of probability and impact) are performed. |
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Risk identification is conducted accross the Company half-yearly. The Board reviews the Top 10 Strategic Risks half yearly. The Risk Committee considers the Top 10 Strategic Risks quarterly. |
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Practice: |
A systematic, documented, formal risk assessment is conducted at least once a year. |
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A risk assessment is conducted by management half-yearly. |
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Practice: |
Risks are prioritised and ranked in order to focus responses and interventions to those risks outside the board's tolerance limits. |
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The Top 10 Strategic Risk assessment is conducted by management half-yearly. |
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Practice: |
A top-down approach is adopted in risk assessments without limiting focus to strategic or high-end risks only. |
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A hybrid (top-down and bottom-up) approach is adopted for all risks. |
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Practice: |
The board regularly receives and reviews a register of the entity's key risks. |
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The Company's Top 10 Strategic Risks as well as the mitigation strategies are considered by the Risk Committee on a quarterly basis, and noted by the Board on a half-yearly basis. |
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Practice: |
The risk assessment process (i.e. identification and evaluation of risks in terms of probability and impact) involves all of the following: - the risks affecting the various income streams of the entity; - the critical dependencies of the business; and - the sustainability and the legitimate interests and expectations of stakeholders. |
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Practice: |
The board ensures that key risks are quantified where practicable. |
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This is done through the risk rating process. |
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Principle 4.10: The Board has ensured that there are processes in place which enable complete, timely, relevant, accurate and accessible risk disclosure to stakeholders. |
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Practice: |
There is disclosure of undue, unexpected or unusual risks taken, and if there are any resulting material losses that the entity suffered for the period under review, also disclosure of all of the following: - the causes of these losses; - the effect that these losses have had on the entity; and - the steps taken by the board and the management to prevent a recurrence. (Only applicable if undue, unexpected or unusual risks have been taken by the entity.) |
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The Company has not experienced undue, unexpected or unusual risks. |
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Practice: |
There is disclosure of any current, imminent or envisaged risk that is considered to threaten the long-term sustainability of the entity. (Only applicable in the event of any current imminent or envisaged risk existing.) |
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Current and emerging risks are disclosed as part of the Risk Management Report in the Sustainability Report. |
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Practice: |
The board discloses in the integrated report its views on the effectiveness of the entity's risk management processes. |
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Principle 5.1: The Board is responsible of information technology (IT) governance. |
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Practice: |
The board assumes responsibility for the governance of IT and places it on the board agenda. |
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IT Governance is a standing agenda item at Risk Committee and Board. |
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Practice: |
The entity has an IT governance framework that supports effective and efficient management of its IT resources. |
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ICT Governance Framework that includes the management of IT resources is approved by the Corporate Governance and Nominations Committee. |
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Practice: |
The IT governance framework includes the structures, processes and mechanisms that will enable the delivery of value to the business and reduce IT risk. |
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The Company's IT Governance Framework is aligned to COBIT 5, King III and Department of Public Service and Administration Corporate Governance Standards. |
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Practice: |
The board ensures that an effective IT charter and policies are established and implemented. |
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Practice: |
The board receives independent assurance on the effectiveness of the IT internal controls, including on outsourced IT services. |
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This is provided by Internal and External Assurance providers. |
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Principle 5.2: IT has been aligned with the performance and sustainability objectives of the company. |
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Practice: |
The board ensures that IT strategy is effectively integrated with the entity's strategic and business processes. |
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Management reports on the alignment of the IT Strategy with business processes at each Risk Committee and Board meeting. |
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Practice: |
The board ensures that there is an effective process in place to identify and exploit opportunities to improve the performance and sustainability of the entity through the use of IT. |
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Principle 5.3: The Board has delegated to management the responsibility for the implementation of an IT governance framework. |
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Practice: |
Management is responsible for the implementation of all the structures, processes and mechanisms of the IT governance framework. |
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Practice: |
A Chief Information Officer (CIO) or other senior employee responsible for IT has been appointed and meets both the following requirements: - The CIO or senior employee is a suitably experienced person; and - The CIO or senior employee has access to and regular interaction on strategic matters with the board or appropriate board committee, and executive management. |
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The Chief Information Officer is a member of the Group Leadership Team, and presents the IT Report at each Risk Committee and Board Meeting.
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Principle 5.4: The Board monitors and evaluates significant IT investments and expenditure. |
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Practice: |
The board both oversees the value delivery of IT, and monitors the return on investment from significant IT projects. |
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IT Reports are presented at Board meetings for consideration. |
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Practice: |
The role of IT in achieving business strategies and objectives is clear. |
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The IT Balanced Scorecard is aligned to the business' strategy. |
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Practice: |
Good governance principles apply to all parties in the supply chain or channel for the acquisition and disposal of IT goods or services. |
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The Company's Procurement Policy and Preferential Procurement Manual provide guidance on the transparent, fair and equitable procurement and disposal process. |
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Principle 5.5: IT is an integral part of the company’s risk management plan. |
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Practice: |
IT risks form an integral part of the entity's risk management process. |
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The Risk Management Strategy and Framework, which includes IT Risks, is reviewed on a quarterly basis. |
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Practice: |
Management regularly demonstrates to the board that the entity has adequate business resilience arrangements in place for IT disaster recovery. |
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Management implemented a Business Continuity Management Programme, which is tested for adequacy and appropriateness. |
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Practice: |
The board ensures that the entity complies with IT laws and that IT-related rules, codes and standards are considered. |
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The activities are cosidered within various governance structures of the Board. |
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Principle 5.6: The Board ensured that information assets are managed effectively. |
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Practice: |
The board ensures that the entity identifies all personal information and treats it as an important business asset. |
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The Company has an Information Security Policy. |
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Practice: |
The following two statements are correct: - The board ensures that an Information Security Management System is developed, recorded and implemented; and - The Information Security Management System ensures security, confidentiality, integrity and availability of information. |
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Information Security Management updates are reported on as part of the ICT Report to the Audit Committee.
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Principle 6.1: The Board ensures that the company complies with applicable laws and considers adherence to non binding rules, codes and standards. |
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Practice: |
The board assumes responsibility for the entity's compliance with applicable laws and those non-binding rules, codes and standards that the entity has voluntarily elected to comply with. |
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This is monitored through tabling of relevant reports at Board meetings on an ongoing basis. |
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Practice: |
The board appreciates that the duty to act in the best interest of the entity involves having regard to, not only the obligations that laws create, but also the rights and protection that they afford to the entity. |
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Ongoing training on Ethics and good governance is provided to the Board. |
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Practice: |
The board oversees that the compliance policy and process take account of the context of law, and how applicable laws relate to one other. |
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Legislative reviews are presented to the Audit Committee in the form of a Compliance Report. |
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Practice: |
The board continually monitors the entity's voluntary compliance with applicable laws, rules, codes and standards. |
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Legislative reviews are presented to the Audit Committee in the form of a Compliance Report. |
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Practice: |
The integrated report discloses the extent of voluntary adherence to applicable non-binding rules, codes and standards. |
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Practice: |
The integrated report discloses details of how the board discharges its responsibility to establish an effective compliance framework and processes. |
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Principle 6.2: The Board and each individual director have a working understanding of the effect of applicable laws, rules, codes and standards on the company and its business. |
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Practice: |
Both the induction and ongoing training programmes of directors include an overview of, and changes to, applicable laws, rules, codes and standards. |
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Over and above the induction and ongoing training programmes, the Directors' toolkit includes meeting procedures, governance instruments and the regulatory universe. |
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Practice: |
Directors know the general content of applicable laws, rules, codes and standards sufficiently well to discharge their legal duties. |
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Ongoing additional training is provided to the Directors. |
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Principle 6.4: The Board should delegate to management the implementation of an effective compliance framework and processes. |
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Practice: |
Management has established the appropriate structures to educate, train, communicate about, and measure compliance. |
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A Compliance Department is in place and provides Compliance training. A Compliance Forum has also been established to monitor compliance company-wide. |
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Practice: |
A Chief Compliance Officer or other senior employee responsible for compliance has been appointed and meets both the following requirements: - The Chief Compliance Officer or senior employee is a suitably experienced person; and - The Chief Compliance Officer or senior employee has access to and regular interaction on strategic matters with the board or appropriate board committee, and executive management. |
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The Chief Corporate and Regulatory Officer is a member of the Group Leadership Team and attends the Risk Committee meetings and other Board Committees on invitation. |
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Practice: |
The compliance function has adequate resources to fulfil its duties. |
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The Compliance Department is adequately resourced. |
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Practice: |
The board ensures that management has implemented a legal compliance policy, approved by the board. |
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The Compliance Policy is in place. |
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Practice: |
The board receives assurance on the effectiveness of the internal controls intended to ensure compliance with laws, rules, codes and standards. |
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Internal Audit reports are presented to various governance structures. |
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Practice: |
Compliance with laws, rules, codes and standards is dealt with in the code of conduct of the entity. |
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The Code of Ethics outlines ethical standards for business practice, individual business conduct and assists the Company's stakeholders with ethical deliberations, choices, decisions and conduct. |
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Practice: |
There is disclosure of material or repeated regulatory penalties, sanctions or fines for contraventions of, or non-compliance with, statutory obligations - whether imposed on the entity or its directors or officers. (Only applicable where there were such material or repeated regulatory penalties, sanctions or fines for contraventions of, or non-compliance with, statutory obligations during the reporting period.) |
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Principle 7.1: The Board should ensure that there is an effective risk based internal audit. |
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Practice: |
The entity has established an internal audit function. |
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Practice: |
The internal audit function evaluates the entity's governance processes. |
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Internal Audit has developed an Audit Plan which is approved on an annual basis. The Audit Plan evaluates the Company's internal controls and governance processes regularly. |
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Practice: |
The internal audit function performs an objective assessment of the effectiveness of risk management and the internal control framework. |
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As per the approved Internal Audit Plan. |
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Practice: |
The internal audit function systematically analyses and evaluates business processes and associated controls. |
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In accordance with the Institute of Internal Auditors' Standards for the Professional Practice of Internal Auditing and Code of Ethics. |
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Practice: |
The internal audit function adheres to the Institute of Internal Auditors' Standards for the Professional Practice of Internal Auditing and Code of Ethics. |
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Practice: |
The internal audit function appropriately provides information on instances of fraud, corruption, unethical behaviour and irregularities. |
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This is reported as part of the Internal Audit Report (Fraud Prevention Plan). A fraud awareness communique is distributed company-wide. |
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Practice: |
Where there is no formal internal audit function, the integrated report discloses: - the reasons for this; and - how adequate assurance of an effective governance, risk management and internal control environment has been maintained. (Only applicable if the entity does not have a formal internal audit function.) |
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Principle 7.3: Internal Audit should provide a written assessment of the effectiveness of the company’s system of internal controls and risk management. |
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Practice: |
Internal controls are established over all of the following areas: - financial; - operational; - compliance; and - sustainability. |
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The internal controls were established and the effectiveness thereof is tested by Internal Audit regularly. |
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Practice: |
Internal audit provides the board with a written assessment of the system of internal controls and risk management. |
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This is done through the Internal Audit Reports tabled at various Board governance structures. |
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Practice: |
Internal audit provides a documented review of internal financial controls to the audit committee. |
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As part of the Internal Audit Report which is a standing agenda item at Audit Committee meetings. |
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Principle 7.5: Internal audit should be strategically positioned to achieve its objectives. |
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Practice: |
The internal audit function is independent and objective. |
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The Chief Audit Executive reports to the Audit Committee. |
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Practice: |
The internal audit function reports functionally to the board through the audit committee. |
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The Chief Audit Executive reports to the Audit Committee. |
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Practice: |
The Chief Audit Executive has a standing invitation to attend executive committee meetings. |
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The Chief Audit Executive is a permanent attendee at Group Leadership Team meetings. |
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Practice: |
The internal audit function has the appropriate skills and resources to meet the complexity and volume of risk, and the assurance needs of the entity. |
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The Internal Audit Function is outsourced to a consortium of external professional services firms. |
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Practice: |
The Chief Audit Executive develops and maintains a quality assurance and improvement programme that covers all aspects of the internal audit function. |
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This is provided for in the Internal Audit Plan. |
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Principle 8.1: The Board should appreciate that stakeholders’ perceptions affect a company’s reputation. |
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Practice: |
The gap between stakeholders' perceptions and the performance of the company is measured and managed to enhance or protect the entity's reputation. |
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The Company conducts various surveys to measure the gap between stakeholder perception and performance. Various initiatives to address any identified gaps are implemented. |
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Practice: |
The entity's reputation, and how its relationships with stakeholders affect it, is a regular board agenda item. |
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Stakeholder Management is a standing agenda item for Board meetings. |
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Practice: |
All of the following statements are correct in relation to stakeholders that could materially affect the operations of the entity: - Stakeholders are identified; and - Stakeholders' legitimate interests and expectations are evaluated; and - The above takes place as part of the risk management process. |
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The Corporate and Regulatory Office has established a Central Stakeholder Feedback Repository to monitor how the stakeholder concerns are addressed. |
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Practice: |
The process for identification and evaluation of the legitimate interests and expectations of stakeholders is reviewed at least once a year. |
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Principle 8.2: The Board should delegate to management to proactively deal with stakeholder relationships. |
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Practice: |
Management develops a strategy and formulates policies for the management of the relationship with each stakeholder grouping. |
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A Board approved Stakeholder Management Strategy and Policy were implemented. |
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Practice: |
The board oversees the establishment of mechanisms and processes that support constructive engagement by the entity with its stakeholders. |
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The Stakeholder Management Report is a standing agenda item at Board meetings. |
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Principle 8.5: Transparent and effective communication with stakeholders is essential for building and maintaining their trust and confidence. |
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Practice: |
The board has adopted stakeholder communication guidelines that support a responsible communication programme. |
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The Remuneration, Social and Ethics Committee annually considers the Stakeholder Communication Plan. |
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Practice: |
The entity provides information to its stakeholders that is both: - complete, timely, relevant, accurate, honest and accessible; and - in accordance with legal constraints and strategy. |
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Information to stakeholders is provided through the Integrated Report, media releases and on request. The Board interacts with its stakeholders during site visits. |
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Practice: |
The integrated report includes reasons for refusals of requests for information that were lodged with the entity in terms of the Promotion of Access to Information Act, 2000. (Only applicable in the event of any such refusals during the reporting period.) |
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Principle 9.2: Sustainability reporting and disclosure should be integrated with the company’s financial reporting. |
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Practice: |
The board includes commentary on the entity's financial results in the integrated report. |
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This is reported under the Directors Report in the Integrated Report. |
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Practice: |
The board discloses in the integrated report the following: - whether the entity is a going concern and if it will continue to be a going concern in the year ahead; and - if there is concern about the entity's going concern status, the reasons therefor and the steps the entity are taking to remedy the situation. |
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Practice: |
The board ensures that the integrated report sets out: - the positive and negative effects of the entity's operations on the environment and society; and - the plans to improve the positive effects and remove or reduce the negative effects in the financial year ahead. |
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The report includes strengths and weaknesses identified in the operational environment and action plans for improvement. |
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Practice: |
The integrated report discloses the nature of the entity's dealings with stakeholders and the outcomes of these dealings. |
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Corporate Social Investment activities, Supplier Development and Localisation, Labour and regulatory related matters are disclosed in the Integrated Report. |
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Principle 9.3: Sustainability reporting and disclosure should be independently assured. |
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Practice: |
Sustainability reporting is independently assured in accordance with a formal assurance process established. |
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Independent assurance on the sustainability report is provided by External Auditors. |
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Practice: |
The integrated report discloses the scope and methodology of independent assurance of the sustainability report, as well as the name of the assurer. |
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This is disclosed in the Sustainability Report. |
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Overall Score |
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Disclaimer
The assessment criteria of the web-based tool, the governance assessment instrument (GAI) have been based on the practice recommendations of the King III report. These criteria are intended to assess quantitative aspects of corporate governance only and not qualitative governance. As such, the results are proposed to serve as an indication of the structures, systems and processes in place and are not intended to include an indication of the governance culture of an entity.
The responsibility for the input of data in order to attain a result through the use of this is that of the user and the entity in respect of which the user licence has been granted (licensee). The results based on the use of the GAI may be based on the subjective opinion of the licensee or the representative user(s) and may not be true reflection of the actual state of the governance structures, systems and processes at the entity.
The The Global Platform for Intellectual Property (Pty) Ltd ("TGPIP") makes no warranty or representation as to the accuracy or completeness of either the assessment criteria or the results. Neither TGPIP nor any of its affiliates nor the software developer shall be held responsible for any direct, indirect, special, consequential or other damage of any kind suffered or incurred, as a result of reliance on the results produced through the use of the GAI.
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