Amecor is incorporated in South Africa under the provisions of the Companies Act, 2008, as amended (Companies Act). The Company is listed on the JSE Limited and is guided by the principles recommended in the King Report on Governance for South Africa (King III).
The board of directors undertake an in-depth analysis of principles contained in King III and compares these with current practices on an on-going basis. The analysis indicated that in substance, Amecor already applies a majority of principles, with the exception of:
Disclosure in yearly integrated reports demonstrates the Group’s commitment to apply the principles of King III, and make known compliance achieved. The board is equally committed to apply the principles of King III, which came into effect on 1 March 2011. The directors have accordingly established mechanisms and policies which are appropriate to the business and risks of the Group and will ensure continuous reassessment of the quality of the Group’s corporate governance practices.
The board annually ensure that the Company complies with the Listings Requirements of the JSE Limited. The board places strong emphasis on achieving the highest standards of financial management, accounting and reporting. All financial statements are prepared in accordance with International Financial Reporting Standards.
The board is made up of executive and non-executive directors with the majority of board members being non-executive. The non-executive directors provide independent judgement on issues of strategy, performance, resources and standards of conduct. The board retains full and effective control over Amecor, whilst being responsible for strategic and fiscal policy, as well as being involved in all decisions affecting it, which are considered to be material.
Considerable thought is given to board balance and composition and collectively the board believes that the current mix of knowledge, skill and experience meets the requirements to lead the Company effectively. The board sits at least four times per annum and more frequently if necessary. No one director has unfettered powers of decision making in the Group.
Appointments to the board are formal and transparent and considered by the board as a whole. The selection process involves consideration of the existing balance of skills and experience and the continuous process of assessing the needs of the Company. Non-executive directors are required to devote sufficient time to the Company’s affairs.
The board’s independence from the team responsible for the daily management of Amecor is maintained by:
- keeping separate the roles of the chairperson and the chief executive officer;
– functioning board committees comprising mainly of non-executive directors;
– the non-executive directors not holding fixed-term service contracts;
– all directors, with prior permission of the board, being entitled to seek independent professional advice on the affairs of Amecor at the Company’s expense;
– all directors having access to the advice and services of the company secretary; and
– the appointment or dismissal of the company secretary being decided by the board as a whole and not by one individual director.
The general powers of the directors are set out in the Company’s Memorandum of Incorporation. Directors have further unspecified powers and authority in respect of matters which may be exercised and dealt with by the Company, which are not expressly reserved to the members of the Company in general meeting.
The main responsibilities of the board are as follows:
- approval of the strategic and annual business plans, the setting of objectives and the review of key risks and performance areas;
- monitoring the implementation of board plans and strategies against a background of economic, environmental and social issues relevant to the Company, as well as the mitigation of risks by management;
- appointment of the chief executive officer and maintenance of succession plans;
- the appointment of directors, subject to election by the members in general meeting; and
- determination of overall policies and processes to ensure the integrity of the Company’s management of risk and internal control.
Whilst retaining overall accountability and subject to matters reserved to itself, the board has delegated to the chief executive officer and other executive directors authority to run the day-to-day affairs of the Company.
Board meetings are convened by formal notice incorporating a detailed agenda together with relevant documentation. Information is distributed in a timely manner prior to board meetings to facilitate adequate preparation for discussion at these meetings.
The company secretary arranges an appropriate induction programme for new directors, if required. This includes an explanation of their fiduciary duties and responsibilities as well as arranging visits to Company operations, where discussions with management facilitate an understanding of the Company’s affairs and operations.
The board supports the development of all employees and also the development of directors, by availing them the opportunity to attend external courses and seminars. In certain circumstances, it may become necessary for a non-executive or independent director to obtain independent professional advice in order to act in the best interests of the Company. Such a director also has unrestricted access to the chairperson, executive directors and the company secretary. Where a non-executive or independent director takes reasonable action and costs are incurred, these are borne by the Company.
The company secretary provides the board as a whole and directors individually with guidance on the discharge of their responsibilities. She is also a central source of information and advice to the board, and within the Company, on matters of ethics and good corporate governance.
Appointment and removal of the company secretary are matters for the board as a whole. The company secretary also assists in developing the annual board plan and ensures compliance with the statutory requirements of the Company and its subsidiaries.
The company secretary ensures compliance with the Rules and Listings Requirements of the JSE Limited.
The board has five sub-committees which have been established to assist the board in discharging its responsibilities. These committees listed here-under play an important role in enhancing good corporate governance, improving internal controls and in turn, the performance of the Company:
– Social and Ethics
Each board committee acts according to their written terms of reference approved by the board. They set out its purpose, membership requirements, duties and reporting procedures. Board committees may take independent professional advice
at the Company’s expense. The committees are subject to annual evaluation by the board in regard to performance and effectiveness.
Chairmen of the board committees and the lead client service partner of the external auditors of the Company are required to attend each annual general meeting to answer any questions raised by our shareholders. The board has determined that all the sub-committees have fulfilled their responsibilities for the year under review in compliance with their terms of reference, respectively.
The executive committee comprises of three executive directors and a further three executive members from the respective subsidiaries.
The board has delegated a wide range of matters relating to the subsidiary companies’ management, including:
- financial, strategic, operational, governance, risk and functional issues;
– formulation of the Group strategy and policy; and
– alignment of Group initiatives.
The committee meets monthly with the respective executive subsidiary members and an additional Group session is held annually focussing on strategy and initiatives taken to develop the Group. The committee assists the chief executive officer to guide and control the overall direction of the business of the Company, monitor business performance and act as a medium of communication and co-ordination between Group companies and the board.
The audit committee comprises three non-executive directors (effective 1 June 2012). The audit committee’s terms of reference include, inter alia:
– considering the independence of the external auditors and making recommendations to the board and shareholders on the appointment or dismissal of the external auditors and their fees for services rendered;
– evaluating the independence, effectiveness and performance of the external auditors and considering and pre-approving any non-audit services rendered by those auditors, including satisfying themselves as to the validity of the non-audit services and defining any limits in this regard;
- considering and reviewing the reliability and accuracy of the financial information and the appropriateness of accounting practices, policies and disclosure practices;
– examining and reviewing the interim report, annual financial statements, prospects and any other documentation to be published by the Company;
– reviewing compliance with applicable laws, best corporate governance practices, accounting standards and regulatory requirements;
– reviewing the effectiveness of the Group risk assessment process, adequacy of accounting records and internal control systems; and
– monitoring and supervising the functioning and performance of internal audit function.
The Board places strong emphasis on maintaining appropriate systems of internal control. The chairperson of the committee reports to the board on the activities and recommendations made by the committee. The financial director and the external audit partner attend all meetings, by invitation.
Each year the committee makes an assessment of the qualifications, expertise, resources and independence of the Company’s auditors. This assessment is based upon reports produced by the auditors, the committee’s own dealings with the auditors and feedback from the executive team. The independence and objectivity of the auditors is regularly considered by the committee.
The Amecor risk committee consists of three executive and three non-executive directors. Directors of subsidiary companies are also invited to attend to ensure compliance and risk management throughout the Group. The committee assists the board in recognising all material risk issues to which the Group is exposed and ensuring that the requisite management culture, practices, policies and systems are progressively implemented and functioning effectively. These include, among others, business continuity management and ethical commercial behaviour.
The functions of the committee inter alia include:
- setting out a formal policy for the management of risks;
– reviewing and assessing the integrity and effectiveness of risk management process each year;
– considering annually the consolidated risk assessments and determining trends, common areas of concern, emerging
risks, and the most significant risks for reporting to the board;
– monitoring and reviewing changes in stakeholders’ expectations, corporate governance codes and best practice
guidelines relating to risk issues; and
– reviewing and approving the insurance policies.
In accordance with the provisions of the Protected Disclosures Act Number 26 of 2000, management has ensured that no employee who has made a protected disclosure shall be subject to any occupational detriment. Such employees will be protected against any victimisation or other adverse treatment in terms of the aforementioned legislation.
Effective 1 March 2012, Amecor established a social and ethics committee as contemplated in the new Companies Act, consisting of one non-executive and two executive directors. Directors of subsidiary companies are also invited to attend to ensure that contribution and input is given from all areas of the Group. The committee has an independent role, operating as an overseer and a maker of recommendations to the board for its consideration and final approval. The committee does not assume the functions of management, which remain the responsibility of the executive directors, officers and other members of senior management.
The functions of the committee inter alia include:
- The social and economic development, Employment Equity Act and the Broad-Based Black Economic Empowerment Act compliance;
- Good corporate citizenship including promotion of equality, prevention of unfair discrimination, reduction of corruption, contribution to the development of communities, and record of sponsorship, contributions and charitable donations;
- The environment, health and public safety, including the impact of the Group’s activities;
– Consumer relationships, including the Group’s advertising, public relations and compliance with consumer
– Labour and employment including the standing in terms of decent work and working conditions, the employment relationships and its contribution toward the educational development of its employees;
– To draw matters within its mandate to the attention of the Board as occasion requires; and
– To report, through one of its members, to the shareholders of the Company’s annual general meeting on the matters within its mandate.
The committee consists of:
- Percy Ying;
- Keith Vieira;
- Kerry Colley;
- Sarah Wray;
- Chris Bell;
- Duran Vieira; and
- Vicky Sievwright.
A policy of effective communication and engagement with all stakeholders in the affairs of the Group is adhered to and the Group provides a secure, healthy and participative social and working environment for its staff and associates. The board is committed to improving communication with employees and encourages employees to participate at all levels in the decision-making processes of Amecor. The board is committed to providing equal opportunities for all employees..
Amecor implemented a code for dealing in securities of Amecor shares. The document has been distributed to all directors and senior management who have in turn relayed the share dealing process to all employees. The Company enforces a restricted period for dealing in shares, in terms of which any dealings in shares by all directors and employees are disallowed by the board from the time that the reporting period has elapsed to the time that results are released and at any time that the Company is trading under a cautionary announcement.
A procedure for directors and employees to deal in shares has been introduced and the Company’s sponsor will give guidance on the matter from time to time.
Amecor has a clearly defined employment equity strategy aimed at realising the potential of previously disadvantaged people in South Africa. The Group continues to implement strategies to be compliant with all aspects of the South African legislative requirements on employment equity and has implemented employment equity plans.
The annual general meeting of Amecor provides the opportunity for shareholders to ask the directors and chairpersonquestions about Amecor’s activities and prospects. All directors, in particular the chairperson, are expected to be present.All resolutions at the annual general meetings are voted on by a show of hands, with the verified results announced onSENS and in the press as soon as practicable following the close of the meeting.The notice of the annual general meeting, which includes explanations of all resolutions, is contained in the Company’sannual integrated reports, which is sent to all shareholders in advance of the meeting, in accordance with the corporategovernance code of South Africa.
The Remuneration policy within the Amecor Group is reviewed annually by its remuneration committee.
The remuneration committee is a formal committee of the Board. The primary purposes of the committee include, but are
not limited to the following:
- determining any criteria necessary to measure the performance of executive directors in discharging their functions and responsibilities;
– reviewing the terms and conditions of the executive directors’ service agreements, taking into account relevant market information and information from comparable companies where relevant, to ensure that they are fairly but responsibly appraised and rewarded for their individual contributions towards enhancing the Company’s performance;
– determining specific remuneration packages for the executive directors of the Company, including but not limited to basic salary, benefits in kind, any annual bonuses, performance based incentives, share-based incentives and other benefits;
– determining any grants to executive directors and other senior employees made pursuant to any executive share scheme adopted by the Company in general meeting; and
– wherever appropriate, consulting with the chairperson of the board, the chief executive or other executive non-executive directors in fulfilling their duties under these terms of reference.
The remuneration of the non-executive chairperson is determined by the committee and executive directors, and the remuneration of the other non-executive directors is determined by the chairperson and executive directors.
The Amecor Remuneration Mandate has been compiled and approved by the Board in order to regulate and control the application of the remuneration policies on a consistent and equitable basis across the Group.
The remuneration policies and principles set out in this policy mandate, place an emphasis on the alignment of the interests of senior executives with the interests of stakeholders and with the business strategy as formulated by the Board. The document regulates how performance-based rewards can and should be used to drive corporate performance.
The Group’s remuneration policy has been set with the objectives of attracting, motivating and retaining high calibre directors and senior management in a manner that is consistent with best practice and aligned with the interests of the Group’s stakeholders.
Guaranteed salaries are reviewed annually, normally effective 1 April, and are targeted broadly at the median position of the relevant market. The committee also takes into consideration business performance, salary practices prevailing for other employees in the Group and, when setting individual salaries, the individual’s performance and experience in the role.
Packages are negotiated at market related levels, and as a general rule, above average remuneration will only be awarded to employees who demonstrate that they have above-average competency, and who are able to deliver results in keeping with this. /toggle]
Variable pay is designed to incentivise and reward both team and individual effort, serving as a tool which managers can use to attract, motivate, reward and retain staff of the calibre that is needed to achieve both current and future Group goals.
All full-time salaried senior managers and employees are appraised annually by the manager to whom they report. Their performance ratings, at each year-end, influence annual and merit increments or promotions in the following year
Special contractual contracts apply to the appointments of and the termination of employment of the executive directors, incorporating fixed term contracts of employment to be fulfilled.
The appointment of non-executive directors is considered and resolved by the Board. The remuneration is based on proposals from the Board and duly approved.
Non-executive directors do not receive short-term incentives and their term of office is governed by the Memorandum of Incorporation which provides that at least one third of the directors will retire by rotation, but may, if eligible, offer themselves for re-election.
The remuneration of non-executive directors is reviewed by the Remuneration Committee on an annual basis, and recommendations as deemed appropriate are then submitted to the Board for approval. Non-executive remuneration is determined and paid in the form of an annual fee. Such fees are submitted for consideration of shareholders at the annual general meeting during that financial year.
In the case of the chairperson, as with the non-executive directors, a single composite fee is approved annually compensating him for his services as a director. His remuneration is benchmarked annually by the committee and an appropriate fee recommended for approval by the Board and by shareholders.
In accordance with the Companies Act, Amecor has defined its prescribed officers as those who exercise general control over the whole or significant portion of the business and activities of the Group, or regularly participate to a material degree in the exercise of general executive control over, and management of the whole or a significant portion of, the business and activities of the Group. The Group is managed by the Board and as such has no prescribed officers.