Governance Corporate governance review

Audit, Risk and Compliance Committee

During the year ended 28 February 2015 the Audit, Risk and Compliance Committee comprised four independent non-executive directors:

• Chris Seabrooke (Chairman)
• Funke Ighodaro
• Wiseman Nkuhlu
• Stephen Davidson

The King III Code recommends that the Group Chairman should not sit on the audit committee but this is permitted by the JSE. The Board is of the view that the presence of Stephen Davidson, the Group Chairman, as a member of the Audit, Risk and Compliance Committee is a valuable aspect of the Group’s corporate governance and assists effective communication within the Board.

The committee considers its Chairman, Chris Seabrooke, to be designated the financially qualified member. Biographical details of the committee members, including their financial qualifications, are shown here.

The committee operates within defined terms of reference as set out in its charter and the authority granted to it by the Board and meets at least three times a year, when the external auditors, the internal auditors, the Group Chairman (in addition to being a member of the committee), Chief Executive Officer, Chief Financial Officer and the Chief Risk Officer are invited to attend. The external and internal auditors have unrestricted access to the Audit, Risk and Compliance Committee and meet with the committee members, without management present, at least once a year. The Audit, Risk and Compliance Committee is available on the Group’s website: www.datatec.com.

The principal functions of the committee are to:

• review the annual financial statements, the half-yearly results announcement and other financial reports;
• assess the risks facing the business and review the Group’s risk management procedures; discuss the findings and recommendations of the internal and external auditors;
• monitor the effectiveness of internal controls and comment on the state of the internal control environment (found here);
• review the internal and external audit plans; and
• review the effectiveness of the internal and external auditors.

Directors’ attendance at Audit, Risk and Compliance Committee meetings during FY15 and subsequently to the date of this report (all meetings were scheduled):

The committee reviews its performance annually by means of questionnaires completed by individual committee members and attendees which are then discussed at Board and committee meetings. These appraisals enable the committee to evaluate its effectiveness objectively and to conclude that it is operating effectively under the terms of reference set down in its charter.

The committee is satisfied that it has met its responsibilities for the year under review and to the date of this report with respect to its terms of reference as set out in its Charter.

Furthermore, the committee is satisfied that it has complied with its legal and regulatory responsibilities throughout that period.

The Audit, Risk and Compliance Committee’s report to shareholders for the year ended 28 February 2015 is presented here in this Integrated Report.

The Chairman of the Committee will be available at the Annual General Meeting to answer queries about the work of the committee.

Social and Ethics Committee

The Board has established a Social and Ethics Committee under the terms of the Companies Act 71 of 2008. This committee is chaired by Prof Wiseman Nkuhlu and in addition comprises the CEO, Jens Montanana, and Company Chairman, Stephen Davidson.

The committee operates within defined terms of reference as set out in its charter and the authority granted to it by the Board and meets at least twice a year.

The Social and Ethics Committee Charter is available on the Group’s website: www.datatec.com

The committee’s role is to monitor the Company’s activities in the areas of: social and economic development; good corporate citizenship; the environment, health and public safety; relationship with all stakeholders; and labour and employment matters. In carrying out this role it will have regard to any relevant legislation, other legal requirements or prevailing codes of best practice.

A key role of the committee is to monitor the Company’s standing in terms of the goals and purposes of the ten principles set out in the United Nations Global Compact.

The committee monitors the application of the Company’s Code of Conduct across the Group and takes account of the Organisation for Economic Co-operation and Development’s recommendations regarding corruption as well as anti-bribery and corruption legislation and best practice from around the world including the US Foreign Corrupt Practices Act and the UK Anti-Bribery Act.

It also monitors the Company’s application of BBBEE legislation in its South African operations and the promotion of equality and prevention of unfair discrimination throughout the global operations of Datatec.

The committee also monitors the Company’s contribution to development of communities in South Africa undertaken through the work of the Datatec Educational and Technology Trust.

Directors’ attendance at Social and Ethics Committee meetings during FY15 and subsequently to the date of this report (all meetings were scheduled):

The committee reviews its performance annually by means of questionnaires completed by individual committee members and attendees which are then discussed at Board and committee meetings. These appraisals enable the committee to evaluate its effectiveness objectively and to conclude that it is operating effectively under the terms of reference set down in its Charter.

In summary, the committee’s role can perhaps best be described as overseeing the good corporate citizenship of the Group on behalf of the Board.

The committee’s report to shareholders for the year ended 28 February 2015 is presented here in this Integrated Report.

The Chairman of the committee will be available at the Annual General Meeting to present its annual report noted above and to answer queries about the work of the committee.

Remuneration Committee

The Remuneration Committee operates under terms defined in its Charter, which has been approved by the Board. The Remuneration Committee Charter is available on the Group’s website: www.datatec.com

The composition of the Remuneration Committee during FY15 was:

• John McCartney (Chairman)
• Stephen Davidson
• Chris Seabrooke
• Nick Temple

The Remuneration Committee’s meetings during FY15 and subsequently to the date of this report (all meetings were scheduled), together with the attendance of the committee members, are as follows:

The Chief Executive Officer and the Chief Financial Officer may be invited to attend meetings of the Remuneration Committee but neither may take part in any discussions regarding their own remuneration.

The role of the committee is to assist the Board to ensure that the Company remunerates directors and executives fairly and responsibly in alignment with the creation of long-term shareholder value and to ensure that the disclosure of director and senior management remuneration is accurate, complete and transparent.

The main functions of the committee include:

• Determining, agreeing and developing the Company’s general policy on executive and senior management remuneration so that it will promote the achievement of strategic objectives and encourage individual performance;
• Ensuring that the remuneration policy is put to a non-binding advisory vote at the general meeting of shareholders once every year;
• Determining specific remuneration packages for executive directors of the Company, including basic salary, benefits in kind, annual performance-based bonuses, share incentives and pensions;
• Determining any grants to executive directors and other senior employees made pursuant to the Company’s share schemes and satisfy itself as to the accuracy of recorded performance measures that govern the vesting of incentives;
• Selecting an appropriate comparator group when comparing remuneration levels;
• Regularly reviewing incentive schemes to ensure continued contribution to shareholder value and that these are administered in terms of the rules;
• Advising on the remuneration of non-executive directors;
• Overseeing the preparation of, and recommend to the Board, the Remuneration Report, included in the Integrated Report (see here).

The Remuneration Committee employs the services of specialist consultants in the field of executive remuneration to assist it when necessary. The consultants which have been retained in this role to date are Towers Watson and PricewaterhouseCoopers.

The committee reviews its performance annually by means of questionnaires completed by individual committee members and attendees which are then discussed at Board and committee meetings. These appraisals enable the committee to evaluate its effectiveness objectively and to conclude that it is operating effectively under the terms of reference set down in its charter.

The Chairman of the committee reports on the committee’s activities at each Board meeting and committee members will be available at the Annual General Meeting to answer questions about the committee’s work.

Further details of remuneration matters are covered in detail in the remuneration section of this report.

Nominations Committee

The committee operates within defined terms of reference as set out in its charter which has been approved by the Board. The Nominations Committee Charter is available on the Group’s website: www.datatec.com

The Nominations Committee currently consists of the following independent non-executive directors:

• Stephen Davidson (Chairman)
• Funke Ighodaro
• John McCartney
• Chris Seabrooke

The Nominations Committee’s meetings during FY15 and subsequently to the date of this report (all meetings were scheduled), together with the attendance of the committee members, are as follows:

The Chief Executive Officer and Chief Financial Officer may be invited to attend the committee’s meetings, but neither may take any part in decisions regarding their own succession. The committee is satisfied that it has met its responsibilities for the year with respect to its terms of reference.

The committee is responsible for making recommendations to the Board regarding the appointment of new executive and non-executive directors and makes recommendations on the composition of the Board generally. The committee ensures that director appointments are formal and transparent and oversees succession planning for the Board and senior management.

The committee reviews its performance annually by means of questionnaires completed by individual committee members and attendees which are then discussed at Board and committee meetings. These appraisals enable the committee to evaluate its effectiveness objectively and to conclude that it is operating effectively under the terms of reference set down in its charter.

The Chairman of the committee reports on the committee’s activities at each Board meeting and will be available at the Annual General Meeting to answer questions about the committee’s work.