King III

We have embedded the King Code of Governance Principles for South Africa 2009 (King III) in our culture by assigning specific committees the responsibility for applying King III principles relevant to their mandate.

The table below shows the relevant committees that are the designated custodians of specific principles.

Ethical leadership and corporate citizenship DAC, SEC, Board
Board and directors DAC, Board
Audit committees GACC, BFC
The governance of risk GRCMC, CoRC, MC
The governance of information technology ITC, GACC, GRCMC
Compliance with laws, codes, rules and standards All committees are responsible for compliance relative to their areas of responsibility. However, the GACC has oversight of the compliance function and compliance in the Group as a whole.
Internal audit GACC
Governing stakeholder relationships SEC, Board
Integrated reporting and disclosure Board, GACC (including the Disclosure Committee) DAC, SEC, GRCMC, GRHRC

With the exception of the three areas below, the Group has applied all the principles of King III throughout the year:

  • Remuneration: Although deferred bonus awards are not subject to financial performance conditions, the exposure to share price and malus provisions in the plan provides appropriate links to performance and risk adjustment. This structure is in accordance with the requirements of the UK’s Financial Stability Board’s principles for sound compensation practices. It generally subjects our incentive awards to higher levels of deferral than found elsewhere in the local market.
  • Information Technology Committee: The Chairman of the ITC is not an independent director. Our Board believes that Patrick Clackson has been well-placed to chair this committee, given his experience in banking and related systems, as well as his ability to engage with and provide challenge to management on this topic.

Download our full King III checklist here

Transition to King IV

Following the launch of King IV on 1 November 2016, we conducted an assessment of our Board Charter and committee terms of reference against the principles and recommended practices of King IV. Our view is that we are well positioned in terms of King IV and, in the main, already apply most of its recommended practices.

Key considerations to enhance our application of practices under King IV and to respond to the subsequent related JSE amendments include the following:

› King IV recommends that the governing body should set and disclose targets for gender and race representation in the membership of the governing body. In our 2015 Integrated Report, we disclosed our Board gender target and we do the same in this report. Our Board reflects the pan-African nature of our business and we will include our race composition target in the next report.

› The JSE introduced mandatory separate non-binding advisory votes by shareholders of the issuer at the annual general meeting on the remuneration policy and the implementation report (as described in King IV). We intend to include the second vote as part of our notice of annual general meeting in 2018. The Board notes that the consequences of not passing the non-binding advisory vote will require disclosure and engagement with shareholders.

› King IV recommends that in relation to stakeholder relationships, the governing body should approve policy that articulates and gives effect to its direction on stakeholder relationships. We disclose our material issues in relation to stakeholders and will work towards an appropriate policy.

While we believe our level of disclosure is in line with current best practice, the specific disclosure obligations introduced by the recommended practices in King IV could lead to potential extensive additional disclosures in the form of our explanation of how we applied the principles.

King IV recommends that the board of the holding company should ensure the agreed group governance framework is implemented across the group, and the subsidiaries must form part of the governance arrangements for the group and must agree to all the policies of the group. We have approximately 145 subsidiary entities and will supplement our existing arrangements so as to strengthen our governance in respect of all active entities

 

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