Corporate governance report
Specific governance processes
In accordance with the MOI, every year, a third of directors retires by rotation. After taking due consideration of the performance and contribution of the board members, the nomco recommended to the board, Rex Tomlinson, Graham Dempster and Navin Kapila, who were retiring by rotation, for re-election by the shareholders as indicated in the notice of the AGM on page 126. Mr Kgaboesele, who was also due for retirement and eligible for re-election did not offer himself for re-election and will be retiring at the AGM.
Evaluation of the board and
To establish and improve the operating effectiveness of the board and its committees, evaluations are performed biennially. The interval provides sufficient time to address any concerns and areas of improvement established or expressly stated in the results of the evaluations.
The most recent evaluation was internal, formal, and performed in February 2018. The results were tabled at the nomco in March 2018, and these informed the review of board and committee compositions and the board and committee areas of improvement.
One of the key matters emanating from the results of the evaluation was that although there had been much focus on internal controls, there are further improvements to be made, given the change in the operating model and its impact on the control environment processes. The audit committee would continue to devote time on this as a focus area in FY2019.
The board is satisfied that the evaluation process is improving its performance and effectiveness.
The audit committee is mandated with reviewing the experience of the GCFO annually. The audit committee reviewed Deon Fredericks and satisfied itself of the appropriateness of the expertise and experience of the GCFO. Deon Fredericks ceased to be the GCFO, with effect from 30 June 2018 and he assumed the role of chief investment officer.
Group company secretary evaluation
The group company secretary, Ephy Motlhamme, is suitably qualified and supports the board by advising the members not only on the directors' statutory duties under the law, disclosure obligations and Listing Requirements, but also in respect of corporate governance requirements, practices and effective board processes. She maintains an arm's-length relationship with the directors and is accessible to each of them for support and guidance. She reports functionally to the board chairman and administratively to the GCEO. The group company secretary oversees governance in all the subsidiaries.
The board is confident that she has an arm's-length relationship with the board, individual directors and the executive team. Further, the board is satisfied that she is sufficiently qualified, competent and experienced to perform the role of Telkom's group company secretary.
Delegation of authority
Responsibilities or authority is assigned through the delegation of authority framework. Each board in the group approves its company’s delegation of authority. However, there is group-wide alignment of these documents to ensure that delegated authority levels flow through the proper governance channels. Amendments to these documents are reviewed and approved by the board.
Delegation occurs at board level with delegation to committees, between the group and its subsidiaries, and within the company. Any person to whom responsibility is assigned and authority delegated is held accountable for the proper performance of the assigned responsibility and for proper exercise of the delegated authority.
A significant effort has gone into aligning the delegation of authority for Telkom and its subsidiaries. The delegation of authority framework for the group are continuously reviewed and updated as circumstances change to ensure relevance, applicability and group-wide alignment.
The board believes that the arrangements for delegation of authority are effective and adequate.