Corporate governance practices
Datatec believes that good corporate governance contributes to enhanced accountability, fairness and transparency.
The Board is ultimately accountable and responsible for the performance and affairs of the Company and is committed to upholding the King IVTM principles. The Board sets the tone for the Company through ethical leadership and is committed to maintaining the highest standards of ethics and business conduct. The Board members act with independence, competence, diligence, awareness, insight and information. The Board ensures that the Group is a responsible contributor in society by facilitating economic growth, paying taxes, providing skills and improving the communities in which it operates.
The Board provides guidance to the Group on strategic objectives and takes accountability for the performance of the Group. There is oversight from the Board to the Group on the management of compliance risk, remuneration governance and ICT governance, which support good governance practices. Sustainable growth and delivery of strategic purpose are key objectives of the Board.
The Board appreciates that these principles are essential for good governance and are important to successful stakeholder engagement.
The standards of disclosure are regulated by the Companies Act, the JSE Listings Requirements and the King IVTM Code.
The Board appreciates that effective corporate governance is a key driver of sustainability and acknowledges its responsibility in this regard, including to report openly thereon to stakeholders. Throughout the year (and up to the date of approval of this Integrated Report and annual financial statements) the principles articulated in the King IVTM Code have been applied or, if not applied, explained.
The Board is responsible for the leadership and guidance of the Group and exercises control over all divisions and subsidiaries by monitoring executive management and subsidiary committees. The Board is at the head of the Group's corporate governance structure and ensures the Group is a responsible corporate citizen, cognisant of the impact its operations may have on the environment and society in which it operates, while acting in accordance with Datatec's Code of Conduct.
The Board is governed by a formal Board charter that regulates the parameters within which it operates and defines its roles and responsibilities in accordance with legislation and global best practice with particular reference to the King IVTM Code and the Companies Act. The directors are of the opinion that they have adhered to the terms of reference set out in the Board charter for the year.
The Board ensures that the governance of risk and technology and information through the Board committees supports the organisation in setting and achieving its strategic objectives. The assurance services, in the form of external and internal audit functions, further enable an effective control environment which supports the Board's decision-making.
The responsibilities of the Chairman and CEO, and those of other non-executive and executive directors, are clearly separated to ensure a balance of authority which precludes any one director from exercising unfettered powers of decision-making.
The non-executive directors draw on their experience, skills and business acumen to ensure impartial and objective viewpoints in decision-making processes and standards of conduct. The mix of technical, entrepreneurial, financial and business skills of the directors is considered to be balanced, thus enhancing the effectiveness of the Board.
To fulfil their responsibilities adequately, directors have unrestricted access to timely financial and other information, records and documents relating to the Group. The Board receives presentations from the management teams of its major subsidiaries, enabling it to explore specific issues and developments in greater depth.
Directors are provided with guidelines regarding their duties and responsibilities and a formal orientation programme has been established to familiarise incoming directors with the Group's business, competitive position, strategic plans and objectives. The Board has established four committees to assist it with its duties:
- Social and Ethics Committee
- Audit, Risk and Compliance Committee
- Nominations Committee
- Remuneration Committee
Outcomes of the Board's leadership
- Ethical culture
- Compliance culture
- Effective controls
- Effective risk management processes
- Improved performance
The Board is cognisant of its responsibilities recommended in the King IVTM Report:
- To set and steer Datatec's strategic direction
- To approve policy and planning
- To oversee and monitor management's implementation and execution
- To ensure accountability for performance
The Board is guided by its responsibilities and this is taken into account when setting agenda for Board meetings.
Typical Board meetings include:
- Reports from the various Board committees
- Reports on material matters arising out of their latest meetings
- Corporate governance updates
- Updates of regulatory considerations
- Review of shareholder analyses and share price information
- Financial performance updates
- Discussions of strategic matters
A key focus area of Board is monitoring the COVID-19 pandemic and its financial implications on the Group as well as the impact on staff's wellbeing. The Board will focus on optimising the business for the current environment which will include cost and liquidity management.
Annual Board reviews were performed during 2019 and the Board was satisfied with the manner in which it performed while executing its roles and responsibilities. There were no material issues which were identified during the Board review.
Changes to the Board and committees
As previously announced:
- Rick Medlock joined the Board as an independent non-executive director and member of the ARCC with effect from 1 January 2020
- Maya Makanjee was appointed as the Chairman of the Social and Ethics Committee on 1 June 2019 and also became the Chairman of the Remuneration Committee on 1 September 2019
- Johnson Njeke and Ekta Singh-Bushell stepped down from the Social and Ethics Committee on 30 November 2019
In addition, Stephen Davidson, the Group Chairman, and John McCartney will step down from their committee roles on the ARCC and Remuneration Committee on 31 May 2020.
Ekta Singh-Bushell will be appointed to the Remuneration Committee effective 31 May 2020.
The Board and Board committee attendance was very good during FY20 to the date of this report. This illustrates the Board's high levels of engagement.