/CORPORATE GOVERNANCE

 

BOARD CHARTER

The directors are committed to conducting the business of the company with integrity and fairness and in accordance with good corporate governance practice as set out in the King II Report and the Code of Corporate Practices and Conduct (“the Code”). The King III Report has now been issued, effective for year ends commencing on or after 1 March 2010, so the first financial year in which it will be applicable to Acucap will be the year ending 31 March 2011. The board will, over the course of the next year, give careful consideration to the latest King Report and how it is to be applied to Acucap. 

The directors have, accordingly, established mechanisms and policies which are appropriate to the business and risks of the company and that will ensure compliance with principles of responsible corporate governance and the continuous reassessment of the quality of the company’s corporate governance practices.

Board of directors

Composition of the board of directors
The board of directors consists of three executive directors and seven independent non-executive directors. The composition of the board ensures the necessary professional skills and experience needed to provide objective judgement in terms of the strategic and business direction of the company. The composition also ensures a high level of independence on the board. There is a clear division of responsibility at board level and a balance of power and authority.  All directors are subject to retirement by rotation and re-election at the general meeting of the members.

Role and function of the board of directors
The board of directors is responsible for the proper management and ultimate control of the company. In order to meet this responsibility to members and other stakeholders, the board of directors is responsible for setting the strategic objectives of the company, determining investment and performance criteria, and taking ultimate responsibility for the proper management and ethical behaviour of the businesses of the company.
The board of directors meets at least quarterly, with additional meetings convened when circumstances necessitate it.

Independence of the board of directors
The board of directors’ independence from the daily management team is maintained by ensuring that :
-    the roles of the chairman and of managing director are separate;
-    a majority of non-executive directors is maintained at all times;
-    the audit and remuneration committees consist only of non-executive directors;
-    the investment committee has a majority of non-executive directors;
-    the non-executive directors do not hold service contracts and their remuneration is not tied to the
     financial performance of Acucap; and
-    all directors have access to the advice and services of the company secretary, and with prior agreement
     of the chairman are entitled to seek independent professional advice on the affairs of Acucap at the
     company’s expense.

Nominations policy
The board of directors has established a nominations policy which formalises the process for appointments to the Acucap board, in line with the recommendations of the King Code of Corporate Practices and Conduct. This is also in line with Acucap’s commitment to follow high standards of corporate governance in all its operations and management structures.

Internal financial and operating controls
The board of directors has set a framework of financial reporting, internal and operating controls to ensure reasonable assurance as to timeous reporting of business information, safeguarding of company assets, compliance with statutory law and regulation, recording of company results and general operation in terms of Acucap’s standards of business conduct.

Audit Committee
The board of directors is responsible for monitoring the on-going effectiveness of the internal financial and operating controls and frameworks. The audit committee and external professionals review these matters regularly on behalf of the board of directors. The external auditors report to the audit committee. The minutes of audit committee meetings are open for inspection by members of the board of directors. There is close communication between the board of directors, the audit committee, and the external auditors. Areas of control weakness will be brought to the attention of all relevant parties and remedial action will be taken immediately to ensure no loss or misstatement due to the inadequacy of the internal control environment. Acucap has a small management team and a flat organisational structure, and this does not support a separate internal audit function. The audit committee has assessed and noted that the financial director has the appropriate expertise and experience required for the position. The audit committee pre-approves contracts for non-audit services to be rendered by the external auditor. The audit committee meets at least three times per year and comprises non-executive directors, one of whom acts as chairman.

Remuneration committee
The Committee comprises three independent non-executive directors. The Committee assists the board to ensure that the Company remunerates directors and executives fairly and responsibly.
Code of ethicsThe board of directors forms the core of the values and ethics subscribed to by Acucap through its various bodies and committees. These values and ethics are sustained by the directors’ standing and reputation in the business community and their belief in free and fair dealings in utmost good faith and respect for the law and regulations.

Communications with stakeholders and linked unit holders
Acucap is committed to a policy of timeous and effective communication with linked unit holders and other stakeholders through members’ meetings, the annual financial report and interim financial report and presentations to institutional investors and industry analysts. Matters of both a financial and a non-financial nature are communicated to stakeholders and linked unit holders in a timeous and transparent fashion.

Share dealings by directors
All dealings by directors are regulated and monitored as required by the listing requirements of the JSE Limited. Acucap operates a closed period from 1 October to the date of publication of its interim results and from 1 April to the date of publication of its final result. Details of directors’ shareholdings are set out on page 91 of this annual report.