|King IVTM Detailed Report at 29 Mar 2018|
Registration Number: 2004/025229/06
Run Date: 9/26/2021 3:53:08 PM
|Principle 1: The governing body should lead ethically and effectively.|
|King IV™ Outcome||King IV™ Reference|
|The Group under the steward ship of the Unitary Board endorses and accepts the full responsibility for the application of best corporate practice to ensure that business is managed ethically and within acceptable risk parameters. In discharging this responsibility, the Group is guided by its charters and policies and further ensure that the effective corporate governance is practiced consistently throughout the Group by applying the principles of King IV, complying with the JSE Listings Requirements and the Companies Act, in both latter and spirit.||Ethical Culture||K IV™ P1 Prac 1.a.i|
|The Board, subsidiary directors and prescribed officers are required to disclose their personal financial interest and interests in contracts in terms of section 75(4) of the Companies Act. The Group ensures that directors and prescribed officers are free of any conflicts between the obligations they have to the company and their private interests. Directors are required to disclose any potential conflict at quarterly meetings and as and when necessary to the Company Secretary. Directors do not vote on any matter in which they have an interest and they are recused from any meeting when such matters are discussed.||Ethical Culture||K IV™ P1 Prac 1.a.ii|
|Our ultimate business objectives can only be achieved when we pursue them ethically. To deliver exceptional value to our stakeholders requires us to cultivate the habits of being resolute, trustworthy and responsible. This is not merely a matter of knowing the "rules", but of repeatedly exercising moral thinking and applying the guidelines outlined in the Company's Code of Ethics.||Ethical Culture||K IV™ P1 Prac 1.a.iii|
The Board has set values which the Group adheres and these are incorporated into the Group's Code of Ethics. Within the Code of Ethics, we have articulated our ethical values and behavioural standards. This foundation remains the Board's platform to lead Mpact sincerely and honestly. The Group’s standards of integrity and ethics in dealing with suppliers, customers, business partners, stakeholders, government and society at large is outlined in the Code of Ethics and every employee is expected to subscribe to the Code of Ethics. The Code translate Mpact driven values into practical action.
|Ethical Culture||K IV™ P1 Prac 1.a.iv|
|Members of the Board have the necessary experience and qualifications necessary to lead the Group, coupled with the annual directors development programme. In addition, annual strategy updates enable directors opportunity and understanding of the industry in which the Company operates. It further gives an update on market intelligence, industry developments and growth strategies.|
The Company has subscribed for Sentinel Legal Update to monitor and respond to applicable laws, adopted industry rules, codes and standard. Additionally, the Board is provided with a report on significant legal and corporate governance developments affecting Mpact and action plans.
|Good Performance||K IV™ P1 Prac 1.b.i|
|The Board agendas and supporting documents are appropriate, relevant and contain key issues to able to facilitate robust dialogue, and draw out diverse views to obtain alignment on key issues. Quarterly updates on strategic initiatives ensures that the Board respond to both the challenges and opportunities.
The Board recognises the necessity for directors to occasionally seek independent professional advice at the Group’s expense, in this regard the Board has adopted a Board Policy on procedure for taking professional advice.
|Good Performance||K IV™ P1 Prac 1.b.ii|
|The board’s paramount responsibility is the positive performance of a company in creating value for all stakeholders. Once board members have been appointed through a formal process, an orientation process is undertaken followed by continual development. |
Continual development of the Board is necessary to enhance the governance practices within the Board and is in the best interest of the company to ensure that board members remain up-to-date and informed. It ensures that board members are well equipped to deal with their governance responsibilities. The duty lies with the Company Secretary to ensure that this continuous development takes place.
|Good Performance||K IV™ P1 Prac 1.b.iii|
|The board is responsible for setting the strategic direction of the Group with the assistance of the executive committee. Mpact has a robust strategy which is formulated by the executive committee and approved by the Board for implementation. The Board is responsible for monitoring the implementation of the strategy, policies and procedures, internal controls, governance, risk management, ethics and authority levels. ||Effective Control||K IV™ P1 Prac 1.c.i|
The Board is aware of their fiduciary duties when making decision and ensure that they exercise their duty of care and skill in the best interest of the company. Risk management forms an integral part of decision making at Mpact. The Board further consider the material business risk when approving strategy and budgets.
|Legitimacy||K IV™ P1 Prac 1.c.ii|
The board ensure that the Group is a responsible citizen by having regard to not only to the financial aspects of the business, but also the impact the business operations may have socially and environmentally. The Group has policies and procedures in place to manage its governance, operations and information systems which regard to
- reliability, security and integrity of financial and operational information;
- effectiveness and efficiencies of operations
- reducing its environmental footprints; and
- compliance with laws, regulations and contracts.
|Effective Control||K IV™ P1 Prac 1.c.iii|
|The Board members attendance of meetings is satisfactory and the annual attendance register of directors meetings is included in the Integrated Report. A minimum of four board meetings are scheduled per financial year and additional meetings may be convened when necessary. Well-structured board agendas and comprehensive papers are circulated to board members of a timely basis, ensuring that they are well informed and that debate and decisions are constructive and sound.||Good Performance||K IV™ P1 Prac 1.c.iv|
|The Board is responsible for controlling the Group's business. In accordance with the Terms of Reference, the Board act as the focal point for, and custodian of corporate governance and has out-most responsibility to the broader stakeholders, which include present and potential beneficiaries of the Group's products and services, clients and employees.|
The Board has defined levels of material transactions in relation to business of the company, reserving special powers for itself and delegating others to management or the committees of the Board. The delegation of authority is distinguished from an abdicating duty of the board to monitor and oversee exercises of delegated authority to ensure it is used within the relevant limits and for the proper purpose.
|Effective Control||K IV™ P1 Prac 1.d|
|The Board has approved a stakeholder policy which guides and ensures that the Board collectively provide effective governance and leadership that involves managing its relationships with management, employees and all other relevant stakeholders||Effective Control||K IV™ P1 Prac 1.e.i|
|The Board has through its adoption of the Code of Ethics, actively activated an ethical culture within the Group. Similarly, internal policies and procedures have been aligned to ensure that the company adheres in all aspects of its operations to ensures that it acts as a responsible citizen and that its action do not undermine the sustainability of its social and natural environmental.||Ethical Culture||K IV™ P1 Prac 1.e.ii|
|The board ensure that disclosure is directed towards giving stakeholders a balanced view of the true economic value of the company, social issues and environment.The information is made available through a variety of channels and it is prepared in a manner that will be easily understandable and accessible.||Legitimacy||K IV™ P1 Prac 1.f|
The Board ensures that the degree of transparency and communication is considered with reference to the company's stakeholder policies and other relevant legal requirements. Consequently, a decision concerning the level of disclosure of information and timing is a strategic one which is taken after due consideration by the Board of directors.
|Legitimacy||K IV™ P1 Prac 2|
|The Board is governed by its Terms of Reference which encompasses the duties of the Board in terms of all relevant laws, codes of good practice and standards. The Terms of Reference further outline process and timing for Board evaluations.||Effective Control||K IV™ P1 Prac 3|
|Principle 2: The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture.|
|King IV™ Outcome||King IV™ Reference|
The Board has adopted a Code of Ethics for the Group which set the values and appropriate behaviours when doing business. Ethical standard are clearly articulated and have been established and implemented.
|Ethical Culture||K IV™ P2 Prac 4|
K IV™ P2 Prac 5
|The board ensures compliance with the code of conduct is integrated into the strategy and operations of the company; i.e. the ethical organisational culture is reflected in the company's vision and mission; strategies and operations; its decisions and conduct; and the manner in which it treats its internal and external stakeholders.||Ethical Culture||K IV™ P2 Prac 6.a|
|The Board has build a culture of integrity which drives the ethics from top down. The Group policies prohibit corruption, and place a duty on everyone to report fraud, theft or misconduct. Reporting may be done through an independent Tip-Off Ethics line. |
The group detailed risk register is reviewed quarterly by the Audit and Risk Committee and the Board. Where a reputational risk is identified it is included in the register, it is then assessed in terms of probability and impact until it is fully mitigated.
|Ethical Culture||K IV™ P2 Prac 6.b|
|The Mpact Code of Conduct is published on the website and hard copies have been printed for employees.||Ethical Culture||K IV™ P2 Prac 7.a|
|The Mpact Code of Ethics covers numerous topics which put ethical behaviour on check. Each section of the code sets out Mpact's commitments, and explanation of the issues (where necessary), guidelines for what to do and what not to do, and references to other Mpact policies.||Ethical Culture||K IV™ P2 Prac 7.b|
|Ethical behaviour forms part of an annual employees communications such as Imbizos to ensure ethical behaviour is embedded within Group. The Code of Ethics forms part of the induction of new employees and directors.||Ethical Culture||K IV™ P2 Prac 7.c|
|The board ensures that the board's and management's conduct sets an example in that it aligns to the company values. The Board accepts the responsibility for ensuring that management nurtures a culture of ethical conducts by developing policies and procedures , internal controls, governance, risk managements and ethics.||Ethical Culture||K IV™ P2 Prac 8|
|The Board is committed to respecting and promoting human rights through the employment practices and recruitment policies. Mpact commits to a work environment that is free from unfair discrimination and harassment and provides the opportunity for all employees to have equal opportunities.||Ethical Culture||K IV™ P2 Prac 9.a|
|The Board oversees the Mpact Tip-Offs reporting and everyone at Mpact has a responsibility to report any kind of misconduct. The reports are investigated and where appropriate sanctions are applied to the offenders in line with Mpact disciplinary code and procedure.||Ethical Culture||K IV™ P2 Prac 9.b|
|Mpact has a Tips-Off line which is independently administered by Deloitte to detect breaches of ethical standards and dealing with such disclosures appropriately. The reports on Tips-Offs make part of the Audit and Risk Committee agenda on a quarterly basis.||Ethical Culture||K IV™ P2 Prac 9.c|
|A culture survey was undertaken to access the level of organisation's ethics standards during 2016. The results were tabled at the Social and Ethics Committee and the Board meeting for review. Management's plans on how will the company address areas that required further attention were noted and continue to be monitored until all addressed. ||Ethical Culture||K IV™ P2 Prac 9.d|
|The Code of Ethics is enforced consistently and uniformly across all levels within the Group and directors are bound equally to abide by its values. Ethical guidelines are integrated into decision-making.||Ethical Culture||K IV™ P2 Prac 10.a|
|The Board has agreed that employees should be trained on an on-going basis to develop awareness and sensitivity for ethical values.||Ethical Culture||K IV™ P2 Prac 10.b|
|Subsequent to the Culture survey undertaken during 2016, results were tabled at the Social and Ethics Committee in March and May 2017. The report on interventions undertaken by management to address areas that required further improvement were reviewed and would be further monitored during 2018.||Ethical Culture||K IV™ P2 Prac 10.c|
|- Review the Code of Ethics|
- Address all employees concerns raised during the Employee Culture survey
- Improve Ethics Training
|Ethical Culture||K IV™ P2 Prac 10.d|
|Principle 3: The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen.|
|King IV™ Outcome||King IV™ Reference|
|Mpact takes into consideration both the impact the Group has on the environment and its involvement in the communities in which it operates. Greater focus and time is given to Safety, Health and Environment during the Social and Ethics Committee meetings.||Legitimacy||K IV™ P3 Prac 11|
|In pursuit of excellence, Mpact subscribes to various local and international standards, and where applicable, its operations are certificated. Among others, these standards deal with quality, environment, food safety, worker safety and health. Mpact subscribes to environmental and safety legal registers that keep it abreast of changes in legislation.||Legitimacy||K IV™ P3 Prac 12|
Mpact's behavioural standards rest on the moral foundation of being a leading business with the highest ethical standards, delivering exceptional value for our customers, employees, communities and shareholders. The Board ensures that the company's vision and strategy are aligned to the Group Community Social Investment strategy.
|Legitimacy||K IV™ P3 Prac 13|
|The Board oversee and monitor progress and output against set targets on employment equity, fair remuneration, safety, health, environment, health dignity and development of employees. These issues remain standing agenda items on the Social and Ethics Committee, and Remuneration Committee meetings on a quarterly basis. The Social and Ethics approves the Employment Equity Plan on an annual basis and monitor progress against set targets during the Committee meetings.||Legitimacy||K IV™ P3 Prac 14.a|
|The Board oversee and monitor progress made against set targets on diversity and transformation via merit-based employment equity plan with special regard for race, gender and disability. The company has measures in place to prevent, detect and respond to fraud and corruption. As a responsible corporate citizen, Mpact does not condone or tolerate bribery or corruptions. The Code of Ethics emphasises the Company stance on these issues and further gives guidelines and controls in place to avoid them.||Effective Control||K IV™ P3 Prac 14.b|
The Board oversee and monitor the company's impact on public health and safety, consumer protection, community development and protection of human rights. These issues are on the Social and Ethics committee annual plan and are reported on at quarterly meetings. The company commitment towards sustainable community and economic development is outlined in the CSI strategy.
The Company is committed to respecting and promoting human rights through the employment practices which commits to work environments that is free from harassment and unfair discrimination and provides growth and opportunities for all employees.
|K IV™ P3 Prac 14.c|
|The Board overseas performance and measures set with management on determining and reducing environmental impact. The Company is committed to managing natural resources with care, sensitivity and expertise and to continually reduce environmental impact. The Company operate and maintain Environmental System that complies with environmental standards and continue to engage with relevant stakeholders to identify any environmental concerns.|
Mpact is South Africa’s largest recycler of recovered paper and plastic collections. In 2017,
we collected over 661,797 tonnes (2016: 607,840 tonnes) of paper and plastic recyclables
from pre- and post-consumer sources, reducing the corresponding need for a recovered
material to landfill.
|K IV™ P3 Prac 14.d|
|The Board has identified the key areas for the period under review :-|
- ensure that the set targets on Employment Equity are achieved.
- review all internal policies to ensure that they continue to service the purpose and ensure that the Company improves on its commitment of being a good corporate citizenship.
|K IV™ P3 Prac 15.b|
|The Board continue to measure the achievement of the Social and Ethics mandate on a quarterly basis to ensure that the Company remain focused on issues and targets set to maintain and sustain the company commitment toward being a good corporate citizen. The Group initiatives undertaken to reduce the impact of the environment that is energy, water, effluent and others are elaborated in detail in the Sustainability Report available in the Company's website. ||Ethical Culture|
|K IV™ P3 Prac 15.c|
|Taking into account the recent corporate governance scandals, the Board will review its internal processes, policies and procedures particularly on fraud, bribery and corruption. Ensure that the risk registers are updated with newly identified fraud risks. Additionally, improve awareness on the use of Mpact Tip-Offs line to ensure that all suspected matters are reported and investigated||Ethical Culture|
|K IV™ P3 Prac 15.d|
Strategy and performance
|Principle 4: The governing body should appreciate that the organisation's core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process.|
|King IV™ Outcome||King IV™ Reference|
The Board informs and approves strategy developed by management.
|Effective Control||K IV™ P4 Prac 1|
|Strategy formulation is the responsibility of the executive management while the Board bring objectivity and a diversity of experience to the task of evaluating and approving it.||Effective Control||K IV™ P4 Prac 2|
|The board ensures that the strategy is aligned with the purpose of the company, the value drivers of its business and the legitimate interests and expectations of its stakeholders. This assessment covers setting timelines for achievement of the set objectives in terms of short, medium and long term projects. ||Effective Control||K IV™ P4 Prac 3.a|
|Board takes steps to ensure that long-term planning will result in sustainable outcomes taking account of people, planet, profit. In achieving that, the Board further assess the timelines parameters which determine the meaning of short, medium and long term by challenging the assumptions on which the strategy is based as well as the risk and opportunities flowing from the assumption||Effective Control||K IV™ P4 Prac 3.b|
|In the review of the strategy, the Board consider the industry developments, customer needs, the acquisition or development of the technical know how to supply those needs. ||Effective Control||K IV™ P4 Prac 3.c|
|The Board challenges the strategy implementation process to ensure that it takes into account and is align to the planning cycle that will produce positive outcomes. Similarly, the Board further review the plans in place to address all challenges that will emerge during the execution process.||Effective Control||K IV™ P4 Prac 3.e|
|The Board further reviews the inter-connectivity and inter-dependence of the opportunities and challenges that will derive from the implementation process and assess the plans in place to address these. These process include assessment of the changing business environment and needs of the targeted market||Effective Control||K IV™ P4 Prac 3.f|
|Strategy is translated into key performance and risk areas (including finance, ethics, compliance and sustainability); and the associated performance and risk measures are identified and clear.|
The Board reviews performance on strategy initiatives on an annual basis and achievement of these results are also used by the Remuneration Committee when reviewing performance of the executive management.
|Good Performance||K IV™ P4 Prac 4|
The Board set priorities for the strategy and agreed with management the performance measures and targets. During the year under review, the Board reviewed the Group strategy and agreed way-forward with management.
|K IV™ P4 Prac 6|
|The Board oversee that the organisation continually assesses, and responsibly responds to, the negative consequences of its activities and outputs on the triple context in which it operates, and the capitals which it uses and affects. The details of the Group Capital and its Outputs and Outcomes is included in the Integrated Report.||Good Performance|
|K IV™ P4 Prac 7|
|As part of its oversight of performance, the Board reviews the going concern assessment at interim period and year end and further monitors any signs of financial distress during each meeting.||Effective Control||K IV™ P4 Prac 8|
|Principle 5: The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation's performance, and its short, medium and long term prospects.|
|King IV™ Outcome||King IV™ Reference|
|The Board approved the Group Reporting Framework, and together with the Governance Framework and the delegation of authority, to set the direction for approach and conduct of the Group.||Effective Control||K IV™ P5 Prac 9|
|The Board adopted a stakeholder-inclusive corporate governance approach and reporting and appreciates the impact of stakeholders engagement in achieving strategy and long-term sustained growth. The Company takes into account legal requirements and the intended audience and purpose of each report.||Effective Control|
|K IV™ P5 Prac 10|
The Board oversee the preparation and approval of the Annual Integrated Report and all other online or printed information to ensure that they comply with legal requirements to meet legitimate and reasonable information needs of material stakeholders. To this end, the Integrated Report FY2017, Sustainability Report, Social and Ethics Report, Notice of AGM, Annual Financial Statements have been reviewed and approved by the Board.
|K IV™ P5 Prac 11|
|The Mpact Integrated Report is issued annually. The 2017 Integrated Report was released and published on 29 March 2018.||Effective Control||K IV™ P5 Prac 12|
|The Board approve management’s bases for determining materiality for the purpose of deciding which information should be included in reports, this process is also reviewed by the Audit and Risk Committee and recommended to the Board for approval. ||Effective Control||K IV™ P5 Prac 13|
|The Group's external auditor provides assurance on the Annual Financial Statements (AFS)and their independent Auditor's Report is contained in our Website and the Summarised AFS are included in our Integrated Report. The other information contained in the Sustainability Review has been scrutinised by the Group's own internal control function, as well as by external assurance providers where this has been deemed relevant and necessary.|
The Board approved the external assurance providers for material sustainability issues as recommended by the Audit and Risk Committee and has ensured that the integrity of external reports provided has been verified.
|K IV™ P5 Prac 14|
|The Company's King VI application and disclosure is published on the website. The Governance Report has been updated to take into account King IV recommendations.||Good Performance|
|K IV™ P5 Prac 15.a|
|The 2017 Integrated Report is available on the Company's website. The Notice of AGM is available on the website but it will be posted separately to all shareholders who have indicated that they required a printed copy. For those stakeholders who require a printed copy, they may request this from the Company as per the details available on the website.||Good Performance|
|K IV™ P5 Prac 15.b|
|The Group Annual Financial Statements are published on the website. The latest AFS for the year ended 31 December 2017 was published on 7 March 2018. ||Good Performance|
|K IV™ P5 Prac 15.c|
Primary role and
|Principle 6: The governing body should serve as the focal point and custodian of corporate governance in the organisation.|
|King IV™ Outcome||King IV™ Reference|
The mission of the Board is to provide effective and responsible leadership to the company within the industries and markets in which it operates.
|Effective Control||K IV™ P6 Prac 1.a|
|The Board act as the focal point for, and custodian of, corporate governance and as such the Board manages its relationship with management, and other stakeholders of the company along sound corporate governance principles. ||Legitimacy||K IV™ P6 Prac 1.b|
The Board is ultimately accountable and responsible for ascertaining that the company is managed effectively in pursuing its mission, providing oversight of its strategies, policies, decisions, and the execution of strategies.
|Good Performance||K IV™ P6 Prac 1.c|
|The Board appreciate that stakeholder's perception affect the company's reputation. In this regard, the Board ensure that a communication strategy is in place for effective internal and external communication. Disclosure of information is governed by the principles of reliability, relevant, clarity, comparability, timeliness and verifiability.||Legitimacy||K IV™ P6 Prac 1.d|
|The Board is governed by a Charter which set out its mission, duties and responsibilities, as well as the requirements for its composition and meeting procedures. The Board Charter is reviewed and approved on annual basis and as when is necessary to guide its effective functioning of the Board.||Legitimacy||K IV™ P6 Prac 2|
|The policy for directors to take independent advice is in place. The policy outline procedure to be followed in the event that it or any of its members or committees need to obtain independent external professional advice at the cost of the Company on matters within the scope of their duties.||Legitimacy||K IV™ P6 Prac 3|
|The board has unrestricted access to all company information and records and has access to management should they need clarification on certain matters.||Legitimacy||K IV™ P6 Prac 4|
|The Board holds a minimum of four meetings per-annum. Additional meetings are held as when is necessary.||Effective Control|
|K IV™ P6 Prac 5.a|
|The Board confirms that it has fulfilled its responsibilities in accordance with its Charter for the period under review.||Good Performance|
|K IV™ P6 Prac 5.b|
|Principle 7: The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively.|
|King IV™ Outcome||King IV™ Reference|
|The Company has a unitary Board which comprised on executive directors and non-executive directors. Majority of the directors are independent non-executive directors. Directors are appointed through a formal and transparent process which takes into account skills, experience, diversity, other commitments and level of availability in order for a director to effectively discharge his or her duties on behalf of the company.||Good Performance|
|K IV™ P7 Prac 6|
|The Nomination committee review the Board and Committees composition annually and when it is necessary. The review process consider the number of directors, the collective knowledge, skills and experience required to make business judgement calls on behalf of the Company.
In endorsing the recommendations of the Nomination Committee, the Board consider the evolving circumstances and the needs of the company going forward and the nature of its business. The Board further ensures that the skills and resources of the Board as whole are adequate and complements the company strategy. The Board confirmed that it was satisfied with the composition of the Board and the Committees’ for the current period.
|K IV™ P7 Prac 7.a|
|The Board has an appropriate mix of executive and non-executive directors, all of which are independent. The Board comprise of two executive directors and 6 independent non-executive directors.||Legitimacy||K IV™ P7 Prac 7.b|
|In determining its composition, the Board ensures that there is sufficient number of members that qualify to serve on the committees of the Board. The Board has appointed several committees in which non-executive directors plays a pivotal role.||Legitimacy||K IV™ P7 Prac 7.c|
|The quorum for Board meetings is the majority of directors and the participation of the directors by video conferencing or by other audio visual means shall also be counted for the purposes of quorum. ||Legitimacy||K IV™ P7 Prac 7.d|
The appointment of the Board members are line with relevant regulatory requirements. The Board ensure that the directors appointed to the Board have not been declared delinquent nor are serving probation in terms of section 162 of the act.
|Legitimacy||K IV™ P7 Prac 7.e|
|The Board recognises the benefits arising from diversifying including a broader pool of high-quality directors and accessing different perspectives and ideas from all available talent. In accordance with the JSE Listings Requirements, the Board approved a diversity policy which gives guidelines to diversity targets having regard for the demographics of the Country.||Legitimacy||K IV™ P7 Prac 7.f|
|The board comprises a majority of non-executive directors. Six of the Eight directors are non-executives directors.||Legitimacy||K IV™ P7 Prac 8|
|The chief executive officer and the chief financial officers are executive directors of the Board||Legitimacy||K IV™ P7 Prac 9|
|The Board promote diversity in its membership across a variety of attributes relevant for promoting better decision-making and effective governance. The Board is made up of 5 males, 3 females. 2 fo the directors are Black, 1 Indian and 5 are White.||Legitimacy||K IV™ P7 Prac 10|
|The Board is pleased to announce that it has achieved its set objective of 35% women on Board by 2020 ahead of schedule and have agreed to improve race representation of black people on the Board to 45% by 2020. ||Legitimacy||K IV™ P7 Prac 11|
The Board agreed to a rotation of members of the Committees of the Board as part of directors development programme and succession planning in order to expose all directors to the various functions and mandate of all Committees of the Board.
|Effective Control||K IV™ P7 Prac 12|
|The Board succession planning is reviewed annually by the Nomination Committee. During the year under review, the Board agreed that to a plan to prepare for the future and that the on-going identification of suitable candidates should make part of the Nomination Committee Key Performance Areas. ||Good Performance|
|K IV™ P7 Prac 13|
|The appointment of new directors is approved by the Board as a whole on the recommendation of the Nomination Committee.||Legitimacy||K IV™ P7 Prac 14|
|Directors are appointed through a formal and transparent process in accordance with the JSE Listings Requirements : Paragraph 3.84 (a). Procedures for appointments to the board are formal and transparent and are a matter for the board as a whole as outlined in the Board policy for appointment of new members. ||Legitimacy||K IV™ P7 Prac 15|
|Prior to their appointment, procedures are in place to investigate the candidates' backgrounds along the lines of the approach required for listed companies by the JSE . Directors are nominated based on their calibre, knowledge, experience and the impact they are expected to have as well as time and attention they can devote to their roles||Legitimacy||K IV™ P7 Prac 16.a|
|The Board consider the set targets of diversity and race representation when nominating candidates for elections.||Legitimacy||K IV™ P7 Prac 16.b|
|The nomination process includes the identification of suitable candidates, performance and background checks prior to appointment.||Legitimacy||K IV™ P7 Prac 16.c|
|In accordance with Article 25.6.4 of the Company's MOI, a retiring director shall not be automatically eligible for re-election at any Annual General Meeting or any other General Meeting, unless the reappointment has been recommended by the Board having regard to the his/her performance and contribution.|
The board, through the Nomination Committee, reviews performance including attendance of meetings of directors up for re-elections prior to recommending a director for re-election. Additionally, a retiring director is assessed in terms of his/her contribution contribution and the objectivity of business judgement calls.
|Legitimacy||K IV™ P7 Prac 17|
|Directors due for re-election have to confirm the availability for re-election and that they will have sufficient time available to fulfil the responsibilities as directors.||Legitimacy||K IV™ P7 Prac 18|
Candidates’ backgrounds is independently investigated, and their qualifications is independently verified.
|Legitimacy||K IV™ P7 Prac 19|
|Directors profiles standing for election at the next annual general meeting (AGM), including details of existing professional commitments and the Board confirmation for the support of the directors standing for re-election are are included the notice of the AGM.||Legitimacy||K IV™ P7 Prac 20|
|The directors appointments are formalised through an agreed contract of service between the Company and the director. The agreement concluded with non-executive directors includes the directors' code of conduct, the contribution that is expected from the specific individual, the remuneration for holding office as director and the terms of directors' and officers' liability insurance to be provided.||Legitimacy||K IV™ P7 Prac 21|
|New directors are taken through a formal induction programme which provides them with all the necessary background information to maximize the level and degree of contribution ensure that directors make informed decisions on matters concerning the company.||Legitimacy||K IV™ P7 Prac 22|
The Board continual improvement programme is provided to all directors on annual basis to enhance governance practices within the Board and ensure that decision taken are at the best interest of the company. This programme covers training and mentor-ship to ensure that members are well equipped to deal with their fiduciary duties.
|Good Performance||K IV™ P7 Prac 23|
|The Board ensures that directors receive regular briefings on changes in risks, laws and the business environment. Reports on updates on risk changes, laws and the business environment are reported to the Board on a quarterly basis and as and when it is applicable in between meeting dates.||Effective Control||K IV™ P7 Prac 24|
In accordance with section 75(4) of the Companies Act, directors submit declarations of all financial, economic and other interests and related parties at least quarterly, or whenever there are significant changes. A register of the signed directors declaration is managed by the Company Secretary.
|Effective Control||K IV™ P7 Prac 25|
|In managing conflict of interest, a declaration of interest must be made at a meeting of the Board of directors before the proposed contract can be discussed and approved by the Board. Any such conflicts is proactively managed as determined by the Board subject to legal provisions.||Effective Control||K IV™ P7 Prac 26|
|The Board reviews the independence of non-executive directors on an annual basis to ensure that the non-executive directors continue to perform their duties impartially and with the highest integrity.||Effective Control||K IV™ P7 Prac 27|
|The Board consider King Code, the JSE Listings and the companies Act guidelines when assessing independence of non-executive directors. Other indicators are considered holistically to assists with cases of doubt which are not covered in the above mentioned regulations.||Legitimacy||K IV™ P7 Prac 28.a|
Non-executive directors are not allowed to participate in a share-based incentive scheme offered by the company.
|Effective Control||K IV™ P7 Prac 28.b|
|Non-executive directors are discouraged from owning securities in the company. In a case a non-executive director owns securities in the company, the Board review the value and materiality of the securities to ensure that the director still exercises objective judgement that when judged from the perspective of a reasonable informed third party, is likely to influence unduly or cause bias decision-making.|
The company has a policy regarding dealing in securities by directors, officers and selected employees.
|Legitimacy||K IV™ P7 Prac 28.c|
All non-executive directors of the company have not been in the employ for the company in the past three financial years.
|Legitimacy||K IV™ P7 Prac 28.d|
|All non-executive directors have not been appointed as auditors of the company nor any other position in the auditing firm of the company during the preceding three financial years||Legitimacy||K IV™ P7 Prac 28.e|
|Non-executive directors do not provide significant or on-going professional advise to the company.||Legitimacy||K IV™ P7 Prac 28.f|
|Non-executive directors are not customers or suppliers of the company.||Legitimacy||K IV™ P7 Prac 28.g|
|Non-Executive directors are not members of the executive management of another organisation which is a related party to the company.||Legitimacy||K IV™ P7 Prac 28.h|
|Non-executive directors are not entitled to remuneration contingent on the performance of the company other than their fees as approved by the shareholders.||Effective Control||K IV™ P7 Prac 28.i|
|A non-executive may continue to serve, in an independent capacity, for longer than nine years if, upon an assessment by the Board conducted every year after nine years, it is concluded that the member exercises objective judgement and there is no interest, position, association or relationship which, when judged from the perspective of a reasonable and informed third party, is likely to influence unduly or cause bias in decision-making.|
Andrew Thompson has been a Board Member for more than 9 years. He has however been subject to a rigorous review with regard to his independence and performance on annual basis. The Board has concluded that he contributes valuable insight and experience to Board deliberations and continues to provide independent and constructive challenge to the Executive Directors.
|Effective Control||K IV™ P7 Prac 29|
The Board confirmed that it was satisfied with its composition and this is disclosed in the Integrated Report.
|Effective Control||K IV™ P7 Prac 30.a|
|The targets set for gender and race representation in the membership of the Board, and progress made against these targets is disclosed in the Integrated Report.||Effective Control||K IV™ P7 Prac 30.b|
|The categorisation of members of the Board is disclosed in the Integrated Report||Effective Control||K IV™ P7 Prac 30.c|
|There is a disclosure on the procedure and outcome of the assessment of Andrew Thompson the suitability of non-executive independent directors to continue on the board for a period longer than nine year||Effective Control||K IV™ P7 Prac 30.d|
|The directors profiles which includes the qualifications and experience of members is included in the Integrated Report.||Legitimacy||K IV™ P7 Prac 30.e|
|Each Board member's period of service is disclosed in the Integrated Report||Legitimacy||K IV™ P7 Prac 30.f|
|The age of each member of the Board is disclosed in the Integrated Report.||Legitimacy||K IV™ P7 Prac 30.g|
|The directors CV's include directorship in other companies and professional positions held by each member.||Legitimacy||K IV™ P7 Prac 30.h|
Although there have been no resignations, removals or retired directors during the period under review, reasons for the removal, resignation or retirement of directors will provided at the time of occurrence.
|Effective Control||K IV™ P7 Prac 30.i|
|Tony Phillips is an independent non-executive director.||Effective Control||K IV™ P7 Prac 31|
|The Board has reviewed its structure and it confirmed that it was satisfied with the composition of the Board and that there was no need for a Lead Independent Member at this stage.||Effective Control||K IV™ P7 Prac 32.a|
|The Audit and Risk Committee chair act as an intermediary between the chair and the other members of the Board||Effective Control||K IV™ P7 Prac 32.c|
|The Board has appointed non-executive directors who are all independent. We have a pool of independent non-executive directors who are capable to deal with shareholders' concern where contract through the normal channels has failed to resolve concerns. ||Effective Control||K IV™ P7 Prac 32.d|
|All non-executive directors of Mpact are independent.||Effective Control||K IV™ P7 Prac 32.e|
|The Nomination Committee, reviews the performance of the Chair. The Chair of the Remuneration Committee leads performance appraisal of Chair.||Effective Control||K IV™ P7 Prac 32.g|
|The Chair's responsibilities and term are in charter. The written role description of the chairman is makes part of the chairman's succession and guidelines policy of the Board.||Effective Control||K IV™ P7 Prac 33|
The Chairman is not a former CEO and has not worked for Mpact or its subsidiaries and/or associated companies.
|Effective Control||K IV™ P7 Prac 34|
|The board reviews and determine the number of outside professional position that the chair is allowed to hold, taking into account the relative size and complexity of the organisations involved to ensure that he is able to perform the duties of this office effectively.||Effective Control||K IV™ P7 Prac 35|
|The chair is not a member of the audit and risk committee.||Effective Control||K IV™ P7 Prac 36.a|
|The Chairman of the Board is not the chairman of the Committee but is a member of the Remuneration Committee.||Effective Control||K IV™ P7 Prac 36.b|
|The Chairman of the Board is also the Chairman of the Nomination Committee.||Effective Control||K IV™ P7 Prac 36.c|
|Mpact Audit and Risk Committee is a joint Committee. The Chair is invited to the Audit and Risk Committee but is not a member of the Committee.||Effective Control||K IV™ P7 Prac 36.d|
|The Chair is invited to the Social and Ethics Committee but is not a member.||Effective Control||K IV™ P7 Prac 36.e|
|There is a succession planning in place for the chairman as outlined in the chairman succession policy and guideline document.||Effective Control||K IV™ P7 Prac 37|
It is disclosed that the chair is an independent non-executive director in the Integrated Report and the Governance Report.
|Effective Control||K IV™ P7 Prac 38.a|
|Principle 8: The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties.|
|King IV™ Outcome||King IV™ Reference|
|The Board delegate some of the responsibilities to Committees of the Board or adhoc- committees. The exercise of judgement by the Board in this regard, is subject to legal requirements and is guided by what is appropriate for the organisation and achieving the objectives of the delegation.||Effective Control||K IV™ P8 Prac 39|
|The power and authority to lead, control, manage and conduct business, including the power and authority to delegate is vested with the Board. In discharging this responsibility, the Board is supported by Committees and senior management. The delegated authority is distinguished from abdication by the residual duty of the Board to monitor and oversee exercises of delegated authority.||Effective Control||K IV™ P8 Prac 40|
|Powers assigned to committees or to senior management is delegated in the formal written document which specifies the nature of the authority delegated, maximum value up to which the authority may be exercised, any limitations on the authority delegated and the name or position of the individual to whom authority is being delegated.||Effective Control||K IV™ P8 Prac 41|
|Duties and power delegated to Board Committees.executive committee and subsidiary Boards are recorded by means of a formal terms of reference which are reviewed and approved annually by the Board.||Effective Control||K IV™ P8 Prac 42|
The terms of reference of the various Committees of the Board take into account the composition of each of the committees.
|Effective Control||K IV™ P8 Prac 43.a|
|The committee's terms of reference deal with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board.||Effective Control||K IV™ P8 Prac 43.b|
The Committees terms of reference take into account the delegated authority with respect to decision-making.
|Effective Control||K IV™ P8 Prac 43.c|
|The terms of reference in particular the Audit and Risk Committee outline the tenure of the committee members in accordance with the Companies Act. The Audit and Risk Committee members are elected annually by the Shareholders at the Annual General Meeting.||Effective Control||K IV™ P8 Prac 43.d|
The Board Committees reports are a standing agenda item at Board meetings. This is rendered in a form of recommendations and reports ensuring transparency and full disclosure of committees' activities.
|Effective Control||K IV™ P8 Prac 43.e|
The Committees terms of reference states that the committees shall have access to sufficient resources in order to carry out its duties, including access to the Company Secretary of Mpact for assistance as required.
|Effective Control||K IV™ P8 Prac 43.f|
|The terms of reference gives guidelines to procedures to be followed including a minimum number of meetings to be held per annum.||Effective Control||K IV™ P8 Prac 43.g|
The performance evaluation of the Board, including chairman and the CEO and the Committees of the Board are performed annually.
|Effective Control||K IV™ P8 Prac 43.h|
The annual review of Board Committees terms of reference review of the duties of each committee to avoid of duplication of functions between committees, where two or more committees have to jointly resolved a matter, coordinated timing of meetings is arranged.
|K IV™ P8 Prac 44.a|
|The Board ensure allocation of roles and responsibilities and the composition of membership across committees holistically. Specific roles and positioning for each committee are defined to ensure complementary rather than competing approach.||Good Performance||K IV™ P8 Prac 44.b|
|In determining the composition of Committees, the Board ensure that there is a balanced distribution of power and skills required for the Committee to fulfill its mandate. Membership is chosen based on experience and speciality so that no individual has the ability to dominate decision-making, and no undue reliance is placed on any individual.||Good Performance||K IV™ P8 Prac 44.c|
|The Board ensure that each committee has the necessary knowledge, skills, experience and capacity to execute its duties effectively. The Audit and Risk Committee and the Executive Risk Management Committee collectively comprise of independent Directors and of management who collectively have adequate and appropriate knowledge, skills and experience in audit, finance, accounting, sustainability and risk.||Good Performance||K IV™ P8 Prac 45|
|All Committees of the Board of Mpact have a minimum of three members subject to legal provisions where applicable. The Remuneration and Nomination Committee is a joint committee and has four members in order to balance the separate chairmanship for this Committee. ||Good Performance||K IV™ P8 Prac 46|
|Members of the executive and senior management are invited to attend committee meetings by standing invitation or on an adhoc-basis to provide pertinent information and insights in their areas of responsibility.||Good Performance||K IV™ P8 Prac 47|
Every director is entitled to attend any committee meeting as an observer. Such director will not be entitled to participate without the consent of the chair, does not vote and is not entitled to the fees for such an attendance. Meeting Papers of Committees are distributed to all directors.
|K IV™ P8 Prac 48|
|The Board do not use their authority to delegate certain of their powers as means to abdicate responsibility, they apply collective mind to the information, opinions, recommendations, reports and statements presented by the committees.||Good Performance||K IV™ P8 Prac 49|
|The role and duties of Board Committees are disclosed in the Integrated Report.||Legitimacy||K IV™ P8 Prac 50.a|
|The external advisors' invited into committee meetings during the year under review are disclosed under the report of the relevant committee in the integrated report.||Legitimacy||K IV™ P8 Prac 50.c|
|There is a description in the integrated report of how the audit committee carried out its functions in the period under review.||Legitimacy||K IV™ P8 Prac 50.d|
The number of meetings held each year by the board and each board committee and the details of attendance of each director(as applicable) at such meetings are disclosed.
|Legitimacy||K IV™ P8 Prac 50.e |
|The Board committees disclosed whether their are satisfied that it has fulfilled its responsibilities in accordance with its terms of reference for the reporting period.||Legitimacy||K IV™ P8 Prac 50.f|
|he Board has appointed an audit and risk committee which provides an independent oversight of the effectiveness of the assurance functions and services, with particular focus on combined assurance arrangement . The committee engages the external auditors to provide assurance on the summarised financial information and recommends to the board the whether to engage an external assurance provider on material sustainability issues. The audit committee evaluates the independence and quality of the external assurance providers on sustainability.|
The audit committee ensures that combined assurance received is appropriate to address all significant risks facing the company. During the year under review, a Combined Assurance process was developed by management and agreed upon with Internal Audit and External Audit. The mapping was compiled to help understand the level of coverage achieved by each assurance provider in terms of the third level of defence in the Combined Assurance Model. The committee further approved the Integrated Assurance Framework, which covered the innovative and strategic approach to governance while integrating the company value drivers with the risk and opportunity register.
|Good Performance||K IV™ P8 Prac 51.a|
|The audit and risk committee ensures that the Group has the appropriate financial reporting procedures in place. The committee monitors the integrity of the financial statements of the Group, including its annual and half-yearly financial statements, preliminary results announcements and any other formal announcement relating to its financial performance, reviewing significant financial reporting issues and judgements which they contain.||Good Performance||K IV™ P8 Prac 51.b|
|The audit and risk committee is responsible for the review of the annual financial statements which in turn recommend them for approval to the Board.||Good Performance||K IV™ P8 Prac 52|
|The audit and risk committee has a dual role. In order to allocate sufficient time to its responsibilities, two of the meetings per annum are dedicated to a detail review of risk management on all matters.||Good Performance||K IV™ P8 Prac 53|
|The audit and risk committee keep under review the adequacy and effectiveness of the Group's internal controls and risk management systems, including all key financial, operational, compliance and information technology controls as they relate to financial reporting. |
The audit committee has regard to all factors and risks that may impact on integrity of the integrated report; e.g.. judgements, changes in accounting policies, significant or unusual transactions, factors that may predispose management to present misleading information, any evidence that brings into question any previously published financial information, etc.
|Good Performance||K IV™ P8 Prac 54|
|The audit and risk committee members collectively have knowledge and experience on financial risks, financial and sustainability reporting, and internal controls. ||Legitimacy||K IV™ P8 Prac 55|
|All members of the audit and risk committee are independent non-executive directors.||Effective Control||K IV™ P8 Prac 56|
|The chairman of the audit and risk committee is an independent non-executive directors and he is not the chairman of the Board.||Legitimacy||K IV™ P8 Prac 57|
|The audit and risk committee meet annually during the first quarter meetings with the internal and external auditors respectively, without management being present, to facilitate an exchange views and concerns that may not be appropriate for discussion in an open forum. In addition, the Audit and Risk Committee Chairman meets with external and internal auditors before the quarterly meetings.||Effective Control||K IV™ P8 Prac 58|
|The audit and risk committee reviews and approve the non-audit services policy annually. The policy controls and address the provision of non-audit services by the external auditor, and the nature and extent of such services rendered during the financial year. The committee reviews and approve the contracts for non-audit services to be rendered by the external audit and consider whether the auditor's provision of non-audit services is compatible with the auditor's independence.||Effective Control||K IV™ P8 Prac 59.a.i|
|he Committee reviewed and discussed plans and timing to implement IRBA requirement that all public interest entities should implement the mandatory audit firm rotation ("MAFR") commencing by April 2023. The Committee's plans and timing were recommended to the Board. In terms of the timing for Mpact, this meant that the Group would have to change the auditors for year ending 31 December 2022.||Legitimacy||K IV™ P8 Prac 59.a.ii|
The committee assessed the independence of the external auditors and took into account the tenure and rotation of the designated external audit partner. Mark Holme's five year tenure as the as the designated external audit partner ended as at 31 December 2017. Shelly Nelson was appointed as the designated external audit partner with effect from 2018.
|K IV™ P8 Prac 59.a.iii|
|In order to mitigate the attendant risk of familiarity between external auditor and management, Mark Holme has reached his 5 year tenure as the Independent Lead Auditor and the Audit and Risk Committee appointed Shelly Nelson as the Lead Independent Auditor with effect from January 2018. ||Effective Control||K IV™ P8 Prac 59.a.iv|
|The report of the audit and risk committee discloses the significant matters that the audit committee has considered in relation to the annual financial statements, and how these were addressed by the committee.||Effective Control||K IV™ P8 Prac 59.b|
|The audit and risk committee considered the performance and quality of the external audit at the meeting held on 1 March 2018. The process included a reporting obligation letter from Deloitte and a review of the IRBA Inspections on the lead Auditor Ms Nelson, which confirmed that the inspection was satisfactory. Deloitte Annual Transparency Reporting and Summary of Concluded Legal or Disciplinary Actions.|
The Committee confirmed that it was satisfied that it has performed its duties as required in term os the JSE Listings Requirements, Paragraph 3.84 9h)(iii) and Paragraph 22.15(h) and have further recommended the reappointment of Deloitte as external auditors to the Board and subject to the shareholders approval.
|Good Performance||K IV™ P8 Prac 59.c|
The Committee reviewed the performance and effectiveness of the chief audit executive and satisfied itself of the credibility, independence and objectivity of the internal audit function.
|Good Performance||K IV™ P8 Prac 59.d|
|The committee keep under review the adequacy and effectiveness of the Group's internal controls and risk management systems, including all key financial, operational, compliance and IT controls. Key financial controls are identified through a detailed risk management process and the audits performed on the internal audit plan. This follows the decision to ensure best coverage of the Group's internal controls through a rotational and risk-based approach. ||Effective Control||K IV™ P8 Prac 59.e|
|The committee consider on an annual basis and satisfy itself on the appropriateness of the expertise of the chief financial officers and finance function.||Good Performance||K IV™ P8 Prac 59.f|
|The Committee reviewed the combined assurance model applied to provide a coordinated approach to all assurance activities. A combined assurance model was developed by management in collaboration with internal and external audit. The mapping was compiled to help understand the level of coverage achieved by each assurance provider in terms of the third level of defence in the Combined Assurance Model. |
Although the Committee approved the Integrated Risk Assurance Framework and is satisfied with the progress made on combined assurance, it is noted further improvements are being implemented in the coming year.
|Effective Control||K IV™ P8 Prac 59.g|
The Board has appointed a Nomination Committee.
|Effective Control||K IV™ P8 Prac 60.a|
|The nominations committee oversees a formal succession plan for the board, CEO and certain senior executive appointments.||Good Performance||K IV™ P8 Prac 60.b|
The nominations committee oversees the process and results of evaluations of performance and independence of individual directors, board and board committees.
|Good Performance||K IV™ P8 Prac 60.c|
All members of the nominations committee are independent non-executive directors.
|Legitimacy||K IV™ P8 Prac 61|
|The Audit and Risk Committee is a dual role committee of the Board.||Legitimacy||K IV™ P8 Prac 62|
The Mpact Risk Management Committee is a management committee which consists of managing directors of divisions, Head of ICT and Group Risk and Sustainability Manager. The Committee report directly to the Executive Committee and the Audit and Risk Committee. Senior management and independent risk management experts are invited when necessary.
|Effective Control||K IV™ P8 Prac 64|
|The Board has a Remuneration Committee||Effective Control||K IV™ P8 Prac 65|
|All members of the Remuneration Committee are independent non-executive directors.||Legitimacy||K IV™ P8 Prac 66|
|The Chairman of the remuneration committee is an independent non-executive.||Legitimacy||K IV™ P8 Prac 67|
|The Board has appointed the social and ethics committee.||Legitimacy||K IV™ P8 Prac 68|
|The duties of the social and ethics committee are outlined in its charter and include its statutory duties and any other responsibilities delegated to it by the Board. Among others duties of the Social and Ethics Committee include responsible for ethics and corporate citizenship, corporate citizenship, sustainable development and stakeholder relationships.||Effective Control||K IV™ P8 Prac 69|
The Social and Ethics Committee comprises four independent non-executive directors.
|Legitimacy||K IV™ P8 Prac 70|
Evaluations of the
|Principle 9: The governing body should ensure that the evaluation of its own performance and that of its committees, its chair and its individual members, support continued improvement in its performance and effectiveness.|
|King IV™ Outcome||King IV™ Reference|
|The Board undertakes an annual evaluation. The evaluation includes an evaluation of the Board as whole, each director, committees of the Board.This is done through a self-assessment and peer review processes. The evaluation of the Board is periodically performed by an independent service provider, for 2017 year, the Board performed its evaluation process internally with the assistance of the company secretary.||Good Performance||K IV™ P9 Prac 71|
|The chairman of the Remuneration Committee, in her capacity as an independent non-executive director, lead the evaluation of the chair's performance during the year under review.||Good Performance||K IV™ P9 Prac 72|
|The Board and its Committees undertook a formal review of its performance during 2017 to identify strength and weaknesses. Directors were required to complete an online questionnaire compiled by the Company Secretary and the Chairman. ||Good Performance||K IV™ P9 Prac 73|
|The report of the Board performance is reviewed at the first quarter meeting for discussion and plan of areas that required attention. Additionally, the result of the Board performance are used to inform the performance of directors who are up for re-election at the next Annual General Meeting.||Good Performance||K IV™ P9 Prac 74|
|The Board evaluation process during 2017 was facilitated internally. The process covered the evaluation of the of the Board as whole and each of the Board sub-committees , as well as each director review to assess their ability to add value. This was done through a self-assessment and peer review processes. The evaluation process is completed by a one-on-one with the Chair to identify training needs for directors.||Good Performance||K IV™ P9 Prac 75.a|
|In general, the result of the effectiveness evaluation confirmed that Mpact Board remains a high performing Board. Areas of improvement highlighted by the directors include a need to focus more on directors' continuous training taking into consideration regulatory, compliance and best-practice requirement which are changing rapidly. Similarly particular focus in training directors in the changing field of audit, risk and remuneration.||Good Performance||K IV™ P9 Prac 75.b|
The Board confirmed it was satisfied with its performance during 2017.
|Good Performance||K IV™ P9 Prac 75.c|
Appointment and delegation to
|Principle 10: The governing body should ensure that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities.|
|King IV™ Outcome||King IV™ Reference|
|The Board appointed Bruce Strong as the CEO of Mpact.||Effective Control||K IV™ P10 Prac 76|
|The CEO is responsible for leading the implementation and execution of approved strategy, policy and operational planning, and he serve as the chief link between management and the Board.||Effective Control||K IV™ P10 Prac 77|
|The CEO reports to the Board on a quarterly basis and as when is necessary between meeting periods.||Effective Control||K IV™ P10 Prac 78|
The CEO is not a member of the remuneration and nomination committee and the audit and risk committee but he attend these meetings by invitation to contribute pertinent insights and information required to make an informed decision.
|Effective Control||K IV™ P10 Prac 79|
|The Board has a policy on external directorships which governs and outline procedures and guidelines of assuming additional responsibilities outside of Mpact.||Effective Control||K IV™ P10 Prac 80|
|The Nomination Committee reviews the executive committee and senior managers succession planning periodically and recommends to the Board. This is performed to ensure continuity of executive leadership. Succession planning provide for both emergency situations and succession of over a shorter, medium and longer terms.||Effective Control||K IV™ P10 Prac 81|
|The Board evaluate the performance of the CEO and executive committee against agreed performance measures and targets annually.||Good Performance||K IV™ P10 Prac 82|
|The notice period for the CEO and the executive committee is outlined in the Integrated Report - Remuneration Report.||Legitimacy||K IV™ P10 Prac 83.a|
|The CEO's curriculum vitae is disclosed in the Integrated Report and gives details of his experience, qualification and membership outside Mpact.||Legitimacy||K IV™ P10 Prac 83.b|
|A succession plan is in place for the CEO position. The plan is designed to address immediate need, short, medium and long terms potential candidates.||Effective Control||K IV™ P10 Prac 83.c|
|There is an optimal balance between power and accountability between the Board and the CEO and it is documented in the delegation of authority.||Ethical Culture||K IV™ P10 Prac 84|
|The delegation of authority is a formal written document which is reviewed and approved by the Board on an annual basis. The document specified the nature of the authority delegated to the CEO and management and defined levels of material transactions in relation to the business of the company.||Ethical Culture|
|K IV™ P10 Prac 85|
|The Board is responsible for the appointment of executive members.||Legitimacy||K IV™ P10 Prac 86|
|The Board reviews the senior management appointments to ensure that appropriate skills and expertise necessary for competency and authority is in line with the company's strategy.||Good Performance||K IV™ P10 Prac 87.a|
|The Board ensures ensures that key management functions are adequately resourced. The Nomination Committee reviews the performance of the key management functions and report its recommendations to the Board.||Good Performance||K IV™ P10 Prac 87.b|
The Group succession plan which include all senior executive positions is tabled for review on an annual basis by the Nomination Committee.
|Effective Control||K IV™ P10 Prac 88|
The Group delegation of authority which gives an outline of authority levels for the Board and the executives is tabled for review on annual basis. The Group Governance Framework is included in the Integrated Report.
|K IV™ P10 Prac 89|
|The Board and Committees have access to professional and independent guidance on corporate governance and its legal duties. ||Good Performance||K IV™ P10 Prac 90|
The Board has appointed the Company Secretary who provides corporate governance services to the Board.
|Good Performance||K IV™ P10 Prac 91|
The Company Secretary office is adequately empowered with the necessary authority to carry out its duties.
|Good Performance||K IV™ P10 Prac 93|
The Company Secretary appointment, employment contract and remuneration is approved by the Board. The Board review the performance and competency of the Company Secretary on annual basis and further assess objectivity to provide independent guidance and support at the highest level of decision-making in the company.
|Good Performance||K IV™ P10 Prac 94|
|The Company Secretary is appointed by the Board and the removal of the Company Secretary lies with the Board as a whole. The appointment and removal including duties allocated to the Company Secretary are in line with the provisions of the Companies Act 2008.||Legitimacy||K IV™ P10 Prac 95|
The company secretary has unfettered access to the Board but maintains an arms-length relationship with the directors. The Company Secretary is not a member of the Board.
|Effective Control||K IV™ P10 Prac 96|
The company secretary report to the Board via the chair on all statutory duties and functions performed in connection with the Board. Regarding other duties and administrative matters, the company secretary report to the Chief Executive Officer.
|Effective Control||K IV™ P10 Prac 97|
The Board evaluate the performance and independence of the Company Secretary on an annual basis. The results of the Company Secretary evaluation are disclosed in the Integrated Report.
|Good Performance||K IV™ P10 Prac 98|
|Principle 11: The governing body should govern risk in a way that supports the organisation in setting and achieving strategic objectives.|
|King IV™ Outcome||King IV™ Reference|
The governance of risk is the responsibility of the Board. It is set out in the Board Charter and the Risk Management Framework which sets out the responsibilities and ownership for risk management within the company.
|Effective Control||K IV™ P11 Prac 1.a|
|The Audit and Risk Committee of the board review the risk register quarterly and give input on the development of the register, assurance, and the risk appetite and tolerance levels. Consideration is given to positive and negative implications of risks and to the management interventions.The material risks are further discussed at the board meetings when contemplating Mpact’s business strategy.||Good Performance|
|K IV™ P11 Prac 1.b|
|The Board has developed the policies and procedures around risk that are consistent with the Mpact's strategy and risk appetite. Risk management is an integral part of Mpact's culture, strategy, and day-to-day business operation||Effective Control||K IV™ P11 Prac 2|
|The Mpact Enterprise Risk Management Plan and Framework, which articulates and set direction on risk is approved by the board.||Effective Control||K IV™ P11 Prac 3|
|The Audit and Risk Committee review the risk appetite and tolerance levels annually. They also review the risk ratings for top risks against these levels quarterly. The results are recommended to the Board for review.||Effective Control||K IV™ P11 Prac 4.a|
The Board use various methods to determine and access the limit of potential loss that Mpact has the capacity to tolerate. Methods used include taking a qualitative approach to risk appetite with categories such as high, moderate or low or a quantitative approach, such as value at risk (with metrics like economic value at risk and/or financial strength at risk) and earnings at risk. This process undertaken is dependent of the severity of the each particular risk assessed.
|K IV™ P11 Prac 4.b|
|The Board has assigned oversight of the company‘s risk management function to the Audit and Risk Committee which is supported by a Risk Committee.||Effective Control||K IV™ P11 Prac 5|
|Ongoing input on the risk management process by the board is expressed by reviewing risk in context of the threats and opportunities posed to the capitals employed by Mpact.||Effective Control||K IV™ P11 Prac 6.a|
Management demonstrates to the board that the risk responses provide for the identification and exploitation of opportunities to improve the performance of the company. The Group continuously identifies and pursues growth and expansion opportunities to unlock and create value for its stakeholders. Mpact remains open to investment opportunities in South Africa and further afield in Africa, provided they meet the Group’s risk assessment requirements. A report on opportunities presented by previously identified risks are reported in the Integrated Report.
|Good Performance||K IV™ P11 Prac 6.b|
|When reviewing the Risk register consideration is given to the six capitals and Mpact’s resource dependence in meeting its objectives. ||Legitimacy||K IV™ P11 Prac 6.c|
|Mpact's rigours process of risk management provides responses and interventions that strive to create an appropriate balance between risk and reward within the business. Risk responses from management for both corrective an preventative actions are reviewed and recommendations are made to the Risk Management Committee.||Good Performance||K IV™ P11 Prac 6.d|
|The Group has established Business Continuity Plans for each Operation including Central Services Departments, that is Finance, Shared Services, Central Office, IT Department, Legal and Secretarial. These plans are are tested on annual basis to ensure that the process engaged are sustainable and that business will operation under conditions of volatility, withstand and recover from acute shocks.||Effective Control||K IV™ P11 Prac 6.e|
|The risk management plan is integrated in the daily activities of operational management. The identification and evaluation of risks and the effectiveness of the risk plan are reviewed by the Executive Risk Management Committee on a quarterly basis and are in turn reported by Management to the Board. ||Effective Control||K IV™ P11 Prac 6.f|
A report on external assurance on the top risks has been presented and accepted by the Board during the directors meeting held in November 2017. External assurance is debated quarterly at the Social and Ethics Committee and the Audit and Risk Committee for various matters relevant to each of these Committees. The areas where independent assurance was received during the year under review in included in the Integrated Report.
|K IV™ P11 Prac 7|
Top risk categories are reported with approval from the Board in Annual Integrated Reports each year. The risk ratings in context of the risk appetite and tolerance are noted in this report.
|Legitimacy||K IV™ P11 Prac 8|
|The integrated report discloses risk management process and how the board has satisfied itself that risk assessments, responses and interventions to ensure they are effective.||Effective Control||K IV™ P11 Prac 9.a|
|The Board improved on the independent assurance of certain material matters during the year under review. There is disclosure of any material losses and their causes that the company has suffered for the period under review, the effect that these losses have had on the company and the steps taken by the board and the management to prevent a recurrence.||Good Performance||K IV™ P11 Prac 9.b|
|The mitigating actions taken to limit impacts for each of the material underlying risks were monitored during the period and any progress was reported to the Audit and Risk Committee and the Board. The process undertaken is disclosed in Risk Management Report in the Integrated Report.||Effective Control||K IV™ P11 Prac 9.c|
|The Board will continue to monitor risk management process and ensure alignment to the overall strategy. In doing this the Board will ensure that risk oversight does not become a set-it-and-forget-it proposition. Risks in the economic, competitive,regulatory, legal, and technological environments are dynamic, and Mpact risk governance must evolve in response.||Legitimacy||K IV™ P11 Prac 9.d|
Technology and information
|Principle 12: The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives.|
|King IV™ Outcome||King IV™ Reference|
|Information Technology is a standing agenda item at all Board, Exco and Audit and Risk meetings. The Head of the ICT Department attend these meetings and reports on all matters of ICT.||Legitimacy||K IV™ P12 Prac 10|
The Board approves the information and technology policies at the recommendation of the executive committee and the Audit and Risk Committee. An ICT Strategy and Charter have been established and approved by the Audit and Risk Committee and further reported to the Board.
|Effective Control||K IV™ P12 Prac 11|
|A subcommittee of the Executive Committee exists, namely the ICT Steering Committee, and is responsible for controlling Information Technology within the organisation. The ICT Steering Committee is comprised of the Head of each business division, the CEO, CFO, Head of ICT, and the heads of each IT functional department. The direction of IT is therefore set jointly by Business as well as IT.||Good Performance|
|K IV™ P12 Prac 12|
|The ICT Steering Committee convenes quarterly to discuss progress on strategic and operational objectives across the IT areas of Technology, Application Development, IT Support, IT Project Management, and IT Security, Risk and Governance.||Good Performance||K IV™ P12 Prac 13.a|
|Responsibility has been assigned for the monitoring and management of IT risks within the organisation. IT is represented at the quarterly Risk Management Committee and quarterly Audit and Risk Committee meetings. IT risk management is integrated into the organisation-wide risk management framework.||Effective Control||K IV™ P12 Prac 13.b|
|IT Disaster Recovery and Business Continuity management initiatives have been undertaken and are reported at the quarterly ICT Steering Committee meetings. An information security capability has been established which focuses on putting in place effective security measures to prevent severe security breaches. Similarly, an information Security Strategy and Policy and Business Continuity Management Strategy and Policy are in place to ensure that the company has adequate business resilience.||Effective Control||K IV™ P12 Prac 13.c|
|Identified technology solutions have been implemented to enhance to resiliency of the business to cyber-attacks. Feedback around the implementation and effectiveness of these controls are provided to the ICT Steering Committee on a quarterly basis and the Board.||Effective Control||K IV™ P12 Prac 13.d|
|The board exercise ongoing oversight of technology and information management and, in particular, oversee that it results of the performance of, and the risks pertaining to, third-party and outsourced service providers. During the year under review, an independent review into the management of IT third-party providers has been undertaken which resulted in the IT Third Party Contract Management Policy been approved and implemented to govern the management of IT third-party engagements.||Good Performance||K IV™ P12 Prac 13.e|
|The Board overseas significant investments in IT, including the evaluation of projects throughout their life cycles, significant operational expenditure and value creation to business. These are assessed quarterly to identify gaps where improvements are needed. ||Effective Control||K IV™ P12 Prac 13.f|
An ICT Hardware Procurement, Replacement and Disposal Policy exists, which governs the responsible disposal of IT information assets. This policy is tabled for review and approval annually at the ICT Steering Committee.
|Legitimacy||K IV™ P12 Prac 13.g|
|An Information Technology and Acceptable Use Policy exists, which governs the ethical and responsible use of the business technology and information assets. This policy is tabled for review and approval on an annual basis at the ICT Steering Committee.||Legitimacy||K IV™ P12 Prac 13.h|
|The approved Information Security and Acceptable Use Policy provides guidance around applicable laws and legislation governing Information Technology within the business. The Board ensure that the Company complies with IT laws and IT related rules, codes and standards.||Effective Control||K IV™ P12 Prac 13.i|
|Strategic IT projects are aligned to the business strategy. In reviewing and approving these IT projects, the Board assess their ability to support and enhance the operational and decision-making capability of the business.||Good Performance||K IV™ P12 Prac 14.a|
|The board ensures that an Information Security Management System is developed, implemented and recorded that ensures security (confidentiality, integrity and availability of information).The Mpact Information Technology and Acceptable Use Policy emphasises the principles of confidentiality, integrity and availability of information across all areas of Information Technology throughout the organisation.||Legitimacy||K IV™ P12 Prac 14.b|
The board ensures all personal information is treated by the company as an important business asset and is identified. An approved ICT Data Classification and Handling Policy exists, which provides guidance on the identification, classification, and management of confidential, private and public information residing on information assets throughout the company.
|K IV™ P12 Prac 14.c|
|Responsibility for the management of Information Technology Security has been assigned, and is a standing agenda item at the quarterly ICT Steering Committee meetings.||Legitimacy||K IV™ P12 Prac 14.d|
|A clearly defined IT strategy, informed and aligned with business strategy, is in place and was approved by the Board. The IT Strategy is informed by current and future positioning of the business. This strategy is reviewed on an annual basis and as and when the need arises.||Good Performance||K IV™ P12 Prac 15.a|
|An Information and Communications Technology Bid Specification, Evaluation and Adjudication Committee exists for the purpose of evaluation and approving bids for IT technology and services, and ensuring the correct awarding of bids to third parties on the basis of improving productivity, business performance, risk management, compliance, quality, and unleashing new business value.||Effective Control||K IV™ P12 Prac 15.b|
The board exercise ongoing oversight of the management of technology and monitoring and appropriate responses to developments in technology, including the capture of potential opportunities and the management of disruptive effects on the organisation and its business model. The approved IT Strategy contains a detailed SWOT analysis conducted to assess potential disruptions to, and opportunities for, the organisations IT function.
|Effective Control||K IV™ P12 Prac 15.c|
|The board receives independent assurance on the effectiveness of the IT internal controls. An external independent person is appointed to provide the Board with an independent assurance on the effectiveness of IT internal controls, including outsourced IT services. Similarly, the independent member is required from time to time to join the ICT Steering Committee to give guidance and advice to Executive Committee on the alignment of the ICT strategy with that of the business. This includes, but is not limited to, assisting the business in asking ICT the relevant questions and expressing independent opinion on emerging technology trends and their rate of adoption and implementation by various business sectors.||Good Performance||K IV™ P12 Prac 16|
|An overview of the Board monitoring process and how is technology and information managed by business is disclosed in the Integrated Report.||Effective Control||K IV™ P12 Prac 17.a|
|The focus areas of ICT during the period under review were concentrated on enhanced analytics and data warehousing, mobility and increased security across the entire infrastructure real estate. The constant threat of ransomware, identity impersonation and malware infiltration were the key focus areas during this period. The advancement of digital technology and access from a multitude of devices has required significant focus on information security and data management||Effective Control||K IV™ P12 Prac 17.b|
Proactive measures were put in place to test perimeter and internal security, whereby policies and protocols were amended to mitigate these risks. The “big data” strategy has provided a great platform for data ingestion and the output will enable business to predict outcomes on prior trends and externalized factors.
|Effective Control||K IV™ P12 Prac 17.c|
Planned future focus is to reduce the application footprint, upgrade and modernize the ERP system offerings and to simplify digital processes. Agility, mobility and access to real time information are key drivers for the business, and these are at the core of the ICT strategy during this period.
|Good Performance||K IV™ P12 Prac 17.d|
|Principle 13: The governing body should govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that supports the organisation being ethical and a good corporate citizen.|
|King IV™ Outcome||King IV™ Reference|
|The Board is responsible for the governance of compliance with applicable laws and adopted, non-binding rules, codes and standards by setting the direction for how compliance should be approached and addressed in the company.||Legitimacy||K IV™ P13 Prac 18|
|The board ensures that a legal compliance policy, approved by the board, has been implemented by management. Board approved the Mpact Regulatory Universe Policy which ensures legal compliance across the Group.||Legitimacy||K IV™ P13 Prac 19|
|The Board has delegated the management responsibility for implementation and execution of effective compliance management to the Executive Committee and the Audit and Risk committee.||Effective Control||K IV™ P13 Prac 20|
|The Board monitors of annual training statistics of all employees to ensure that compliance with applicable laws is understood not only in terms of the obligations that they create, but also for the rights and protection that they afford.||Effective Control||K IV™ P13 Prac 21.a|
|The board oversees that the compliance policy and system provide for examination of the context of law, and how other applicable laws interact with it. Mpact compliance management takes a holistic view of how applicable laws and non-binding rules, codes and standards relate to one another.||Effective Control||K IV™ P13 Prac 21.b|
|The board continually monitors the company's compliance with applicable laws, rules, codes and standards. The monitoring process is undertaken through the quarterly reporting on the developments in corporate governance and applicable laws presented to the board, and an on-going director training programmes to changes to applicable laws, rules, codes and standards.||Good Performance|
|K IV™ P13 Prac 21.c|
|The board receives assurance on the effectiveness of the controls around compliance with laws, rules, codes and standards. The assurance on the effectiveness of the internal controls on compliance with laws that the Board receives is in line with internal and external audit plans and the update report on compliance matters report to the Boar||Effective Control||K IV™ P13 Prac 22|
|The Board overview of the governing and managing compliance is included in the Integrated Report.||Legitimacy||K IV™ P13 Prac 23.a|
During the year under review, the Board approved the subscription to Sentinel Legal updates to monitor and respond to applicable laws, adopted industry rules, codes and standards.
|Good Performance||K IV™ P13 Prac 23.b|
|The Board is provided with a report on significant legal and corporate governance development affecting the business and action plans taken to mitigate any risks of non-compliance. This report is further reviewed by the Audit and Risk Committee to assess any material risks.||Good Performance||K IV™ P13 Prac 23.c|
|The Board acknowledges and support awareness of the importance of good corporate governance, effective risk management and the demand for high-quality regulatory and compliance. The Group continues to aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, policies, and regulations. This is done through review and assessment of gaps periodically.||Legitimacy||K IV™ P13 Prac 23.d|
|There were no material (or immaterial, but often repeated) regulatory penalties, sanctions or fines for contraventions or non compliance with statutory obligations that were imposed on the company or any of its directors or officers.||Legitimacy||K IV™ P13 Prac 24|
|There were no inspections by environmental regulators, findings of non-compliance with environmental laws, or criminal sanctions and prosecutions for such non-compliance during the year under review.||Legitimacy||K IV™ P13 Prac 25|
|Principle 14: The governing body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term.|
|King IV™ Outcome||King IV™ Reference|
|The Remuneration Committee assists the board in setting and administering remuneration||Effective Control||K IV™ P14 Prac 26|
|The Remuneration Committee review and assess the Remuneration policies to ensure that they remain aligned with good governance standards and market trends on an annual basis. The results are recommended to the Board for review and approval.||Good Performance||K IV™ P14 Prac 27|
Objectives of the policy
The objectives of the Mpact Remuneration policy are to enable the business to:
|Good Performance||K IV™ P14 Prac 28.a|
|Mpact rewards its employees in a way that reflects the dynamics of the market and the context in which it operates. All components of the Remuneration Policy, including the fixed pay and variable pay for performance, are aligned to the strategic direction of the business and business-specific value drivers.||Good Performance||K IV™ P14 Prac 28.b|
|The Remuneration Policy has been set with the objective of attracting, motivating and retaining experienced directors, managers and employees in a manner that is consistent with best practice and aligned with the interests of Mpact’s shareholders.||Good Performance||K IV™ P14 Prac 28.c|
|In setting and administering remuneration policies, the Board ensures that individuals are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to Mpact’s success.||Ethical Culture||K IV™ P14 Prac 28.d|
|The Remuneration policy provides that arrangements towards ensuring that the remuneration of executive management is fair and responsible in the context of overall employee remuneration. This is done by awarding lower annual increases for executives and ensuring that a significant portion of the remuneration of executives is performance based.||Ethical Culture||K IV™ P14 Prac 29.a|
|The Mpact incentives provides for the inclusion of a number of performance conditions, designed to align the interests of the participants with those of shareholders, and to reward organisational and individual performance, more so than merely performance of the economy or the sector in which the Group operates. These Incentives are based on targets, both financial and sustainability related, that are stretching, verifiable and relevant.||Effective Control||K IV™ P14 Prac 29.b|
|The Mpact Remuneration Policy as well as the implementation of the policy will be tabled for voting by the shareholders at the next Annual General Meeting to be held on 5 June 2018.||Effective Control||K IV™ P14 Prac 29.c|
|Mpact operates a model of total remuneration being offered to employees, where the components of total remuneration is structured between financial and non-financial. The remuneration components includes short-term incentives which are made of financial and non-financial targets. ||Good Performance||K IV™ P14 Prac 30.a|
|Mpact incentives are given for both long-term and short-term goals, the performance drivers are not duplicated and a balance is struck with the need to reward success over the longer term. Total remuneration includes a balance fixed and variable remuneration which is structured as follows :
|K IV™ P14 Prac 30.b|
Service contracts for senior executives contain pay in lieu of notice provisions which may be invoked at the discretion of the Remuneration Committee if the Company terminates the service contract. Payments upon termination include any of the following:
|Effective Control||K IV™ P14 Prac 30.c|
The general treatment of the different elements of pay upon termination of employment will depend on the circumstances of termination, and whether such termination is considered to be a “fault and/or bad leaver” or “no-fault and/or good leaver” termination.
The following criteria relates to terminations:
TGCOE: in terms of fault and/or bad leaver, the committee has the discretion to negotiate separate payments with executives, but none of the senior executives have special termination benefits or balloon payment provisions in their employment contract.
STI: in terms of fault and /or bad leaver, no incentive will be paid if employment is terminated prior to the date of payment which is normally in March each year.LTI: in terms of fault and/or bad leaver, the unvested shares are deemed to be cancelled, otherwise awards are adjusted for time served and are settled at date of termination
|Legitimacy||K IV™ P14 Prac 30.e|
|Guaranteed pay includes basic salary, retirement fund, medical aid and travel allowance.||Effective Control||K IV™ P14 Prac 30.f|
|Non-executive directors’ fees are bench-marked against similar-sized companies listed on the Johannesburg Stock Exchange (JSE). The fees are set exclusive of any VAT which may be applicable. ||Effective Control||K IV™ P14 Prac 30.g|
|The Board oversee that the implementation and execution of the remuneration and implementation policy achieves its objectives. The policy and its implementation process is reviewed and approved annually to ensure that it is in line with its objectives.||Legitimacy||K IV™ P14 Prac 31|
|The Remuneration Report which composed three sections, that is, background, policy and implementation is included in the integrated report.||Legitimacy||K IV™ P14 Prac 32.a|
|The remuneration report includes an overview of the policy on base pay and includes details re the use of comparative benchmarks.||Legitimacy||K IV™ P14 Prac 32.b|
|The remuneration report includes details of all benefits paid and awarded to directors and executives and further include retention benefits paid and details of limits for participation in incentive schemes.||Legitimacy||K IV™ P14 Prac 32.c|
|Mpact’s remuneration policy has a direct impact on operational expenditure, company culture, employee behavior and ultimately, with correct strategic alignment, on the company’s sustainability. As such it is clearly defined, monitored and managed to ensure sustained validity and effectiveness. Remuneration is a business issue, not only a human resources issue.||Ethical Culture|
|K IV™ P14 Prac 33.a|
The Mpact Remuneration Policy received support from the shareholders who voted in favour of the policy at the most recent and prior AGMs and the results are indicated in the table below:
Percentage of “Yes” votes 1 June 2017 2 June 2016
Non-binding advisory vote on remuneration policy 94.85% 91.59%
|Legitimacy||K IV™ P14 Prac 33.b|
|The Mpact Remuneration Policy included in the Integrated Report disclosed the activities undertaken by the Remuneration Committee under during the year under review.||Legitimacy||K IV™ P14 Prac 33.c|
|The Remuneration Committee engaged the services of Vasdex Associates consultancy which specializes in reward and performance solutions to on advise executive pay and the alignment of the Remuneration Policy to the principle of King IV.||Effective Control||K IV™ P14 Prac 33.d|
The Remuneration Committee confirmed that they were diligent in exercising their duties of care and skill and they have taken reasonable steps to ensure that they performed their duties in accordance with the committee’s mandate achieved the stated objectives.
|Good Performance||K IV™ P14 Prac 33.e|
The committee has identified the following areas as a key focus for the coming year:
These focus areas will be addressed by the following action items:
|Effective Control||K IV™ P14 Prac 33.f|
|The Remuneration Policy provides for the inclusion of a number of performance conditions in the form of Short term incentives and long term incentives designed to reward individual performance, attract, retain and motivate executives and managers who are able to influence the performance of the Group.||Effective Control||K IV™ P14 Prac 34.a|
|The general treatment of the different elements of pay upon termination of employment will depend on the circumstances of termination, and whether such termination is considered to be a “fault and/or bad leaver” or “no-fault and/or good leaver” termination. In terms of fault and/or bad leaver, the committee has the discretion to negotiate separate payments with executives, but none of the executives have special termination benefits or balloon payment provisions in their employment contract.||Effective Control||K IV™ P14 Prac 34.b|
|All components of this remuneration policy, including the fixed pay and variable pay for performance, are aligned to the strategic direction of the business and business-specific value drivers. The maximum potential % of Guaranteed Pay and weightings of each key performance areas (KPAs) are included in the Remuneration Report.||Good Performance||K IV™ P14 Prac 34.c|
|The Remuneration Report includes an illustration of the potential consequences on the total earnings for executive management, on a single, total figure basis, of applying the remuneration policy under minimum and maximum performance outcomes.||Effective Control||K IV™ P14 Prac 34.d|
|The Remuneration Report gives an explanation of how the Remuneration policy addresses fair and responsible remuneration for executive management, in the context of overall employee remuneration.||Legitimacy||K IV™ P14 Prac 34.e|
|Non-executive directors fees are bench-marked against similar-sized companies listed on the Johannesburg Stock Exchange.||Good Performance||K IV™ P14 Prac 34.g|
|The full Integrated Report including the Remuneration Policy are published on the company's website.||Legitimacy||K IV™ P14 Prac 34.h|
The remuneration of each member of executive management is disclosed in the Remuneration report in terms single, total figure of remuneration, received and receivable for the reporting period, and all the remuneration elements that it comprises, each disclosed at fair value.
|Good Performance||K IV™ P14 Prac 35.a.i|
|The remuneration of each member of executive management is disclosed to indicate in separate tables, details of all awards made under variable remuneration incentive schemes in the current and prior years that have not yet vested, including: the number of awards, the values at date of grant, their award, vesting and expiry dates (where applicable) and their fair value at the end of the reporting period.||Good Performance||K IV™ P14 Prac 35.a.ii|
|The remuneration of each member of executive management reported indicated the cash value of all awards made under variable remuneration incentive schemes that were settled during the year.||Effective Control|
|K IV™ P14 Prac 35.a.iii|
An account of the performance measures used and the relative weighting of each, as a result of which awards under variable remuneration incentive schemes have been made, including: the targets set for the performance measures and the corresponding value of the award opportunity and for each performance measure, how the organisation and an average of all executive managers, performed against the set targets.
|Effective Control||K IV™ P14 Prac 35.b|
|There were no termination of employment during the year under review.||Legitimacy||K IV™ P14 Prac 35.c|
|The Committee confirmed that there were no deviations from the remuneration policy other than King IV alignment process undertaken.||Legitimacy||K IV™ P14 Prac 35.d|
A special resolution for the approval of the non-executive directors fees is part of the Notice of AGM send to shareholders for approval at the next Annual General Meeting .
|K IV™ P14 Prac 36|
|The remuneration policy and the implementation will be tabled at the next AGM for separate non-binding advisory votes by shareholders.||Legitimacy||K IV™ P14 Prac 37|
|Principle 15: The governing body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation's external reports.|
|King IV™ Outcome||King IV™ Reference|
The Audit and Risk Committee is responsible for the ensuring that effective internal control environment is effective.
|Effective Control||K IV™ P15 Prac 40.a|
|In assessing the integrity of information used for internal decision-making, the Audit and Risk Committee reviews key controls and reporting risk areas as assessed by financial management, the internal auditors, and the external auditors . Emphasis on oversight of corporate taxes is taken into consideration including levels of authority and responsibility in key areas. Similarly significant judgements and estimates used by management and their impact on the financial statements is taken into account. ||Effective Control||K IV™ P15 Prac 40.b|
|The Audit and Risk Committee ensure that assurance processes in place are adequate in supporting the integrity of external reports. This is done by ensuring that sufficient, appropriate resources, including experts involved on the audit and risks adequately addressed. The|
Committee has defined criteria for measuring the quality of the audit and evaluate the audit quality on annual basis during year end periods.
|Effective Control||K IV™ P15 Prac 40.c|
|The Audit and Risk Committee ensure that a combined assurance model is applied to provide a coordinated approach to all assurance activities, and that the combined assurance model is appropriate to adequately address all significant risks faced by Mpact and suitable controls exist to mitigate these risks to an acceptable level.||Effective Control||K IV™ P15 Prac 41|
|All three levels of assurance are rated in the Risk Register reported to the Audit and Risk Committee to assist the board in identifying where further assurance is desirable when considering the inherent and residual risk ratings of each risk.||Legitimacy||K IV™ P15 Prac 42.a|
The Audit and Risk Committee reviews the risk register quarterly. The risk register includes statements on assurance at management (Level 1), corporate services (Level 2) and external (level 3) for risks. A narrative on external risk assurance of the top ten risks is also presented to the Audit and Risk Committee by management. Through this letter the Board is also informed of where external assurance is not practicable.
|Effective Control||K IV™ P15 Prac 42.b|
|The Mpact Assurance Model include independent assurance provided by the external auditors, internal auditors, management, fraud examiners, safety and process assessors.||Legitimacy||K IV™ P15 Prac 42.c|
|During the year under review, Deloitte provided assurance on Annual Financial Statements. ||Legitimacy||K IV™ P15 Prac 42.d|
|The Board was also informed of the bodies that provide the external assurance including internal and external audit functions, certification bodies and entities conducting non-financial and regulatory audits (e.g. environmental, safety, and fire defence).||Effective Control||K IV™ P15 Prac 42.e|
|It is important to note that the level of assurance is not the result of the assurance activity at Mpact. It is the level of assurance activity being performed by the various “lines of defences” that is considered by the Audit and Risk Committee for detailed assessment in order to form their opinion of the integrity of information, reports and the degree to which an effective environment has been achieved. ||Good Performance||K IV™ P15 Prac 43|
|The Board is responsible for the governance of risk through formal processes, which include the total system and process of risk management. The board guides the efforts aimed at meeting risk management expectations and requirements by continually obtaining reasonable assurance on all material risks where external assurance may be obtained. ||Effective Control||K IV™ P15 Prac 44|
|Mpact's Risk Management Plan set out the process for risk identification. Included in the process to be undertaken when assurance is required is level of materiality level to be assessed and assured. ||Effective Control||K IV™ P15 Prac 45.a|
|Assurance is considered for various material risks, including financial, environmental, internal controls, compliance (regulatory), governance process and others.||Effective Control||K IV™ P15 Prac 45.b|
|The Audit and Risk Committee has an overall understanding of the business and are familiar with the assurance concepts and have a strong vested interest in making sure the approach is effective. The Committee undertakes a quality survey on external assurance providers before reliance is placed on their work done. The Committee reviews the quality of the assurance providers by ensuring that they meet the requirements of independence and or objectivity, conflict of interest, skills and experience, qualification, assurance methodology and accreditation body.||Good Performance||K IV™ P15 Prac 46|
|A brief description of the nature, scope and extent of the assurance functions, services and processes underlying the preparation and presentation of Mpact Integrated Report is included in the report.||Legitimacy||K IV™ P15 Prac 47.a|
|The Board has further given a statement on the integrity of the Integrated Report and the basis for this statement, with reference to the assurance applied in the Report. ||Legitimacy||K IV™ P15 Prac 47.b|
|The Internal Audit's written assessment on the system of internal control and risk management (negative assurance), for the financial year ended 31 December 2017, was presented to the Audit and Risk Committee. The written statement confirmed that based on the scope of the internal audit plan, the approach followed and results of the reviews and subject to limitations of coverage and sampling, nothing come to their attention that would suggest that systems of internal controls are not operating at Satisfactory level.||Effective Control||K IV™ P15 Prac 48|
The Audit and Risk Committee reviewed and approved the Internal Audit Charter.
|Legitimacy||K IV™ P15 Prac 49|
|The internal audit function is a skilled and resourced as is appropriate for the complexity and volume of risk and assurance needs. Similarly, the Chief Audit Executive ensures that appropriate skills are allocated to all various audits undertaken during the year. This is further reviewed by the Audit and Risk Committee during internal audit function performance reviews on an annual basis. The Committee performance review cover assurance on the relevance of the skills to the auditing process to ensure satisfactory delivery on the Audit Plan approved.||Good Performance||K IV™ P15 Prac 50|
The internal audit function has internal processes to ensure independence. The Audit and Risk Committee also review the independence of the internal audit function on an annual basis.
|Good Performance||K IV™ P15 Prac 51|
|KPMG provides internal audit services to Mpact. The appointment and determination of their fees is reviewed and approved by the Audit and Risk Committee which in turn report to the Board.||Legitimacy||K IV™ P15 Prac 52|
|The Chief Audit Executive (KPMG) meet with the Chair of the Audit and Risk as often as required to discuss any audit matters. The Chair of the Audit and Risk also meets with the Internal Auditors at least quarterly.||Effective Control||K IV™ P15 Prac 53|
The Chief Audit Executive is not a member of the executive committee. The Internal Audit function is outsourced to KPMG but the Chief Audit Executive has full access to management and any information required. In addition the Chief Audit Executive meets regularly with the CFO to discuss progress and any other relevant issues on strategy, policy decision and their implementation.
|K IV™ P15 Prac 54|
|The internal audit services are outsourced to KPMG and Carmen Botha fulfills the role of the Chief Audit Executive.||Legitimacy||K IV™ P15 Prac 55|
|The CAE report to the chair of the Audit and Risk Committee on the performance of duties and functions that relate to internal audit. On other duties and administrative matters, the CAE report to Brett Clark - Mpact's Chief Financial Officer.||Effective Control||K IV™ P15 Prac 56|
|The Board has the primary responsibility for the removal of the Chief Audit Executive.||Effective Control||K IV™ P15 Prac 57|
|The approved Internal Audit Plan for 2018 comprises of risk based element and cyclical based element taking into account Mpact's strategic risk profile, core and support business processes and locations due to rotation.||Effective Control||K IV™ P15 Prac 58.a|
|Internal Audit provide an innovative, responsive and effective value-added in checking and recommending improvements in the effectiveness and efficiency of the internal control systems, and compliance with policies and procedures. The Internal audit plan is intended to be flexible in order to accommodate changing circumstances within Mpact and the requirements of Management and the Audit and Risk Committee. Should there be any significant changes in the operations or risk profile for Mpact, the Internal Audit plan may be revised accordingly in consultation with Management and the Audit and Risk Committee.||Good Performance|
|K IV™ P15 Prac 58.b|
|Internal audit provided a written assessment of the system of internal controls and risk management to the board. This assessment has been disclosed in the Integrated Report.||Good Performance|
|K IV™ P15 Prac 59|
|The Audit and Risk Committee reviews the performance and independent quality review of the Internal Audit function on annual basis. The Committee ensure that the Internal Audit comply with the IIA’s International Standards but also drive continuous improvement. ||Good Performance||K IV™ P15 Prac 60|
The Internal Audit function confirmed that it conforms to the IIA Code of Ethics.
|Legitimacy||K IV™ P15 Prac 61|
|Principle 16: In the execution of its governance role and responsibilities, the governing body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time.|
|King IV™ Outcome||King IV™ Reference|
|The Social and Ethics Committee reviews the Company’s interaction with stakeholder at each committee meeting, of which there were six between March 2017 and March 2018. Reports on the Committee's activities are presented to the Board for further reviews and discussions. ||Effective Control||K IV™ P16 Prac 1|
|The Group’s Stakeholder Engagement Policy is reviewed periodically. The Social and Ethics Committee does monitor stakeholder activities and the policy is updated where required. ||Effective Control||K IV™ P16 Prac 2|
|Senior managers of Mpact consistently engage with stakeholders on an ongoing basis. Key engagements include, although not limited to:CEO and MD imbizo’s, Customer events, Investor and analysts roadshows and media relations. ||Ethical Culture||K IV™ P16 Prac 3|
|Mpact’s list of primary stakeholders is reviewed annually by the Social and Ethics Committee to ensure it reflects the key groupings with which Mpact interacts.||Ethical Culture||K IV™ P16 Prac 4.a|
|The review of the stakeholder engagement reports seek to understand key concerns and identify ways to address the various social, economic and environmental challenges the Group faces.||Effective Control||K IV™ P16 Prac 4.b|
|The determination of material stakeholders is based on the extent to which they affect, or are affected by, the activities, outputs and outcomes of the Mpact's business operations which is followed by assessment of material risks. These risks are included in the Group Risk Register and are an integral part of the organisation-wide risk management.||Effective Control||K IV™ P16 Prac 4.c|
Mpact undertakes stakeholder engagement in compliance with King IV and the Companies Act. We regard transparent and open communication with stakeholders as critical to the Company’s long-term success.
|Legitimacy||K IV™ P16 Prac 4.d|
|The Company does on time to time commission external and independent professional services to measure its efforts on stakeholder engagements. These include: customer surveys, employee surveys, as well as investor and analyst perception audits.||Good Performance||K IV™ P16 Prac 4.e|
An overview report of the arrangements for governing and managing stakeholders relationships is included as part of the Social and Ethics Report in the Integrated Report.
|Effective Control||K IV™ P16 Prac 5.a|
Key Focus areas during the reporting period included a detailed employee imbizos by the CEO and MD imbizo’s (employee engagements)
Customer events - Including opening of the Liquid Packaging Plant in Springs
Investor and analysts road-shows which followed results presentations for interim and year end Financial Results. Media Relations in the form of SENS Announcements, Integrated Report, Corporate Actions, Press Releases and others and Government relations
|Legitimacy||K IV™ P16 Prac 5.b|
|The detailed table on how the effectiveness of stakeholder management and how the outcomes were addressed is included in the Social and Ethics Report in the Integrated Report.||Legitimacy||K IV™ P16 Prac 5.c|
|Planned future focus include environmental targets for 2020.||Effective Control||K IV™ P16 Prac 5.d|
The Board encourages shareholders to attend and engage with the Company each Annual General Meeting.
|K IV™ P16 Prac 6|
|The Chairman of Board, all Committee chairperson and members of committees are present at the Annual General Meeting to respond to shareholders' queries on how the Board executed its governance duties.||Legitimacy||K IV™ P16 Prac 7|
Mark Holme, the designated audit part attended the Annual General Meeting during the period under review. Shelly Nelson, the new designated audit partner will attend the next Annual General Meeting scheduled for 5 June 2018.
|Legitimacy||K IV™ P16 Prac 8|
|The board ensures that shareholders are equitably treated, and that the interests of minority shareholders are adequately protected without benefitting any particular group of interests. |
- Information that is accurate, complete, timely and transparent is disseminated equally to all shareholders to decide on.
- Notice of Annual General Meeting is distributed to all shareholders and no new agenda items are allowed to be added at the meeting unless the shareholders are informed in advance.
- Shareholders who are unable to attend the meeting may vote by proxy.
|Ethical Culture||K IV™ P16 Prac 9|
The minutes of the AGMs are available to the public when needed.
|Ethical Culture||K IV™ P16 Prac 10|
The Group Governance Framework is adopted by subsidiary companies. This is further governed by the delegation of authority to ensure that subsidiary companies investments, strategies, and risks are directors in line with the good practice and Group governance standards.
|Effective Control||K IV™ P16 Prac 11|
|The Board has a governance framework that articulates and gives effect to its direction on relationships and the exercise of authority across the group.||Effective Control||K IV™ P16 Prac 12|
The Board ensures that the Boards of subsidiaries are included in the development of the group governance framework. This includes implementation and adoption of policies, processes or procedures adopted by the holding company.
|Effective Control||K IV™ P16 Prac 13|
The group governance framework is aligned the legislative requirements, standards, codes and policies and does not conflict with the memorandum of incorporation, delegations of authority, shareholder agreements, board charters, board committee terms of reference, and related policies and agreements within the group.
|Legitimacy||K IV™ P16 Prac 14|
|The holding company respects the fiduciary duties of the directors who represents the holding company on the board of the subsidiary companies. The Board recognises that each subsidiary within the group as an independent juristic person in accordance with the Companies Act.||Ethical Culture||K IV™ P16 Prac 15|
|The governance framework addresses the rights and role of the holding company.||Effective Control||K IV™ P16 Prac 16.a|
|The Mpact Board Committees .i.e the Audit and Risk Committee, Social and Risk Committee and the Remuneration and Nomination Committee perform duties for the Group and its subsidiaries. In this regard the subsidiary companies do not have separate committees. This is achieved through agreed reporting and information sharing to ensure that subsidiary boards do not abdicate their accountability.||Good Performance||K IV™ P16 Prac 16.b|
When adopting the holding company operational policies, subsidiary companies with outside shareholders first consider the existing shareholders agreement and the Memorandum of Incorporation to avoid any possible conflict.
|Effective Control||K IV™ P16 Prac 16.c|
|Consultation takes place by the holding company board with the chairperson of the subsidiary board and nomination committee prior to nominating a shareholder representative director. ||Ethical Culture||K IV™ P16 Prac 16.d|
|Appointment of directors is in line with the Companies Act. Directors are informed of their fiduciary duties and duty of care and skill while acting as directors of other other subsidiaries in the group. The appointment letters define “confidential information” broadly, listing examples of the types of information covered, and emphasize that the category includes all non-public information entrusted to or obtained by directors due to their position on the board. ||Effective Control|
|K IV™ P16 Prac 16.e|
|The Group governance framework is implemented across the group.||Ethical Culture||K IV™ P16 Prac 17|
The integrated report provides an overview of the group governance framework that is implemented across the group.
|Ethical Culture||K IV™ P16 Prac 18|