The board is SepHold’s highest decision-making body and is responsible for corporate governance. It provides ethical leadership and is committed to good governance practices that add value to the business.

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The company also  recognises that the principles of good governance and transparent business practices are essential to protect the interests of stakeholders. This is critical to sustaining performance and preserving shareholder value. The SepHold board comprises 10 directors, three of whom are executive directors and seven non-executive directors. Five of the non-executive directors are independent. The SepHold board is satisfied that it has the requisite balance of skills, knowledge, experience and diversity to make it effective.

SepHold is committed to high ethical standards. The company code of ethics has been aligned with corporate governance trends and practices. It has been adopted as part of SepHold’s continuing effort to:

  • comply with all applicable laws and regulations;
  • observe the highest standards of honesty and integrity;
  • demonstrate due regard for the interests of stakeholders;
  • conduct our business sustainably;
  • ensure safety and health;
  • ensure the protection of the environment; and
  • ensure the education and training of employees, officers and directors.

SepHold complies with various codes and regulations, including the Companies Act, the JSE Listings Requirements and King III. The board is satisfied that SepHold complied with all King III recommendations and is assessing the provisions of King IV.

GAI review

The governance performance is evaluated through the utilisation of the Governance Assessment Instrument (GAI) which is trademarked to the Institute of Directors in Southern Africa (IoDSA).

The assessment criteria of the GAI have been based on the practice recommendations of the King III report. For a detailed assessment of the qualitative criteria, click here.

In line with the recommendations of King III, the SepHold board delegates certain functions to various board committees on which independent non-executive, executive and non-executive directors play an active and pivotal role.

In discharging its duties, the board delegates authority to committees and individuals through clearly defined terms of reference, which it reviews regularly. The board maintains effective control through a well-developed governance framework that provides for the delegation of authority. The chairmen of these committees, in conjunction with the board, are elected by the members of each committee.

EXECUTIVE COMMITTEE

The executive committees are responsible for operational activities, developing strategy and policy proposals for consideration by the various boards, and implementing the directives of the various boards. In assisting the SepHold CEO in the performance of his duties, the role of the executive committees includes:

  • developing and implementing strategy, operational plans, policies, procedures and budgets;
  • monitoring operational and financial performance;
  • assessing and controlling risk;
  • prioritising and allocating resources; and
  • monitoring competitive forces in each area of operation.

AUDIT AND RISK COMMITTEE

The role of the audit and risk committee is described in its charter. The committee chairman holds office for no longer than five consecutive years, unless the remuneration and nomination committee and the board have sound reason to determine otherwise.

The audit and risk committee is responsible for the following:

  • Nominating a registered, independent auditor, determining fees to be paid, and terms of engagement
  • Determining and pre-approving any non-audit services that the auditor may provide
  • Preparing a report for the annual financial statements that describes how the committee carried out functions and whether it is satisfied with the auditor’s independence
  • Dealing appropriately with any concerns or complaints relating to SepHold’s accounting practices, the content or auditing of annual financial statements, and internal financial controls
  • Making submissions to the board on any matters concerning accounting policies, financial control, and reporting
  • Performing other functions determined by the board, including the development and implementation of a policy plan for a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes
  • Overseeing the subsidiary and associate audit processes
  • Overseeing external audit processes

The following additional key matters received particular attention by the committee in the 2017 financial year:

  • Assessing internal controls
  • Monitoring CEMENT debt covenants management
  • Monitoring the group’s liquidity and recapitalisation

REMUNERATION AND NOMINATION COMMITTEE

The remuneration and nomination committee is responsible for reviewing the composition of the SepHold board by identifying and making recommendations regarding the appointment of new directors.

SepHold’s remuneration practices reflect the dynamics of the market and context in which it operates. Remuneration plays a critical role in attracting and retaining high-performing individuals. It is also used to reinforce, encourage and promote superior performance and achieve the group’s goals. The group’s remuneration management is market-related, with market surveys and benchmarks applied to ensure competitiveness. The board is responsible for making decisions regarding the remuneration of directors and the CEO. The CEO is responsible for decisions relating to total guaranteed remuneration and incentives of all employees. The remuneration and nomination committee receives these recommendations and advises the board on remuneration practices and long-term employee incentives, and it submits policy amendments to the board for approval.

The following additional matters received particular attention by the committee in the 2017 financial year:

  • Succession and retention planning for all group companies
  • Board composition in terms of gender and skills diversity
  • Enhancement of key performance indicators to align to strategic objectives

SOCIAL AND ETHICS COMMITTEE (incorporating environment, health and safety)

The role of the social and ethics committee is described in its board-approved charter, which regulates the way business is conducted in line with the principles of sound corporate governance. The charter is aligned to principles recommended by King III, and details the role and responsibilities of the committee. The committee comprises six members of the SepHold board, and three non-executive directors.

The social and ethics committee focuses its efforts on the operating companies by monitoring:

  • the maintenance of good relations with customers;
  • the maintenance of good relations with employees and by achieving employment equity;
  • the promotion and protection of the environment, health and safety;
  • the prevention and combat of bribery and corruption;
  • the group’s corporate citizenship, particularly making efforts to protect and advance human rights, promote equality and prevent unfair discrimination; and
  • the extension of reach and impact of the values and ethics through the business partners and supply chain.

The following additional key matters received particular attention by the committee in the 2017 financial year:

  • The establishment of community leadership structures in North West where CEMENT operates
  • The CEMENT land acquisition for community grazing
  • CEMENT’s and Métier’s compliance with regulatory requirements and progress on the implementation of the associate’s social and labour plan
  • Implementation of the CEMENT enterprise and supplier development programme