Corporate Governance

Investor Breakdown and Equity Holdings

Governance at Senwes

The Senwes Group (“the group”) and the board of directors (“the board”) of Senwes and its related parties conduct business according to the highest standards of corporate governance and in the interest of all its stakeholders.

The board and group executive strive to create maximum shared value by delivering on their objective of using their sector expertise to do good through their strategic growth drivers. We ensure the relevance and sustainability of our business model by monitoring the macro environment, the availability and quality of capital inputs and stakeholder needs, all of which inform the strategy of the group.

The Governance Philosophy

Senwes is committed to the highest standards of governance, ethics and integrity. We embrace listed governance practices, robust institutional governance and risk frameworks to ensure our service delivery is continuous and solution-driven. We review these practices and frameworks on an ongoing basis, being mindful of the dynamic landscape in which we operate, which is influenced by, among other factors, economic and climate changes, shifts in the workplace, digital trends such as artificial intelligence, geopolitics, enhanced data safety and security requirements, to ensure that we act in the best interest of all our stakeholders.

In particular, we acknowledge the interdependent relationship between Senwes and its stakeholders and we adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of stakeholders in the best interest of the group over time.

Key Board Focus Areas

The board regularly focuses on:

  • Its own board performance and evaluation.
  • Succession planning;
  • The review of the ten-year rolling strategy.

The Board

Mandate of the board:

The board acts as a unitary governance structure and collectively ensures that, in terms of King IV, it:

  1. Guides strategic direction: Considers and reviews the 10-year rolling strategy of the company presented by management and the budgets necessary for the implementation of the approved strategy;
  2. Approves policy and planning;
  3. Provides oversight and monitoring;
  4. Ensures accountability; and
  5. Approves and implements formal reservation (board) and delegation of authority (CEO and below) policies.

In doing so, the board is committed to fulfilling the following responsibilities:

  • Delegates management of the group to a competent executive management team;
  • Ensures that a robust strategy process is defined, resourced and executed by management;
  • Ensures compliance with appropriate legislation (including regulations), governance codes and appropriate best practices;
  • Governs disclosures so that stakeholders can effectively assess the performance of the group;
  • Protects the interests of the group’s stakeholders and ensure fair, responsible and transparent people practices;
  • Oversees the risk management function and ensures that it informs management’s development and implementation of the strategy;
  • Ensures that the board remains independent in discharging its duties;
  • Adopts a fair and responsible remuneration policy.

The board charter regulates the parameters within which the board operates and ensures the application of the principles of good corpo¬rate governance in all its dealings. Furthermore, the board charter sets out the roles and responsibilities of the board and individual directors, including the composition and relevant procedures of the board. The board charter is reviewed annually and is aligned with the provisions of all relevant statutory and regulatory requirements including, amongst others, the Companies Act No 71 of 2008, as amended (the Companies Act), King IV and the company’s MOI.

Under the Companies Act, directors of a company must use their powers and perform their functions in good faith and for a proper purpose. Directors must also use their powers and perform their functions in the best interests of the company. This includes the duty of a director to avoid a conflict of interest.

Boards of the Senwes Group and the executive management must declare their interests and indicate how any potential conflicts must be managed and evaluated.

Before a director accepts additional commitments, that director must discuss and reach agreement on such commitments with the Chairman to ensure that they do not present a potential conflict of interest that would impact the director’s ability to exercise his fiduciary duties.

A director or prescribed officer is prohibited from using his position or confidential and price-sensitive information to benefit himself or any related third party, whether financially or otherwise. Directors and officers are also required to inform the board timeously of conflicts, or potential conflicts of interest that they may have in relation to particular aspects of business or other directorships. At the start of each board meeting, at the request of the chairman of the board, all board members must declare any actual and/or potential conflicts of interest with matters to be considered at that meeting.

A register of individual directors’ interests in and outside the company are maintained, updated and signed by the directors.

The personal interests of directors are monitored comprehensively and reported continuously in terms of the embedded governance practices as reported above.

Directors have unrestricted access to the company secretary, who provides guidance and advice in relevant circumstances and may also seek independent advice in terms of the protocol for the procurement of independent external advice, regarding the business of the group, at the cost of the company.

Share trading by directors and management takes place in terms of a formal Code of Conduct for Personal Trading of Shares and Positions in the Group. Directors’ and prescribed officers’ dealings are disclosed on the Senwes website within 24 hours of a trade occurring. Directors’ personal shareholding in the Senwes Group is also published in the integrated report on an annual basis.

The personal interests of the current board members in the group are disclosed annually in the integrated report.

The board meets at least quarterly and board meetings are well attended.

The chair is a non-executive director who is appointed by the board on an annual basis. The positions of the chair and the chief executive officer are separate with segregated duties.

The primary role of the chair is to provide ethical and effective leadership to the board, set the tone for its performance and undertake the management thereof. Our chairman regularly engages with board members collectively and separately.

The chair must maintain regular dialogue with the chief executive officer regarding all operational matters and must, without hesitation, consult the remainder of the board regarding any matters which may be a source of concern. He also acts as facilitator at all meetings of the board of directors (or members' meetings) in order to ensure that no member, executive or non-executive, dominates discussions, that appropriate discussions take place and that relevant opinions are forthcoming.

The chair is the link between the board of directors and chief executive officer and the chief executive officer informs the chair of all substantial matters between board meetings.

Board committees

Functions and mandates

The board of directors provides leadership and strategic guidance to safeguard stakeholder value creation within a framework of prudent and effective controls. This makes it possible to assess and manage risk to ensure long-term sustainable development and growth.

The board has ultimate accountability and responsibility for the performance and affairs of the company and ensures that the group adheres to high standards of ethical behaviour.

The board established a number of committees to facilitate effective decision-making and to assist the board in the execu¬tion of its duties and powers, whilst still reserving the material decisions for itself in terms of the Reservation of Authority.

Board committees serve a useful purpose by focusing on clearly defined issues in greater depth than the main board. The group makes use of these board committee structures to ensure that the onerous work of the board is being attended to properly.

These committees meet regularly in terms of the boards annual work plan and annually review their mandates, after which such mandates are presented to the board for approval.

The board committees assist the board in the discharge of its duties and responsibilities. Each board committee has formal written terms of reference that are reviewed annually, and effectively delegated authorities.

The board monitors these responsibilities to ensure effective coverage of and control over the operations of the group. Details of the committees; considerations and focus areas during and for 2023 are covered in the following reports by the chairman of each committee. We also provide the board meeting attendance register that shows how well the board and committee meetings were attended.

Interdependency of board committees

The Senwes Group board has six formal board committees. Board committees report in detail on key discussions and activities at each Senwes Group board meeting, and the minutes of board committee meetings are also subsequently made available to all board members. The group Audit Committee receives regular feedback from the group information team regarding the monitoring of the adequacy and effectiveness of the group’s IT-controls, new/emerging IT-risks associated with the company’s digital transformation journey. Feedback is also received from the Tax Risk Committee on prevailing tax risks and controls.

The main board will rely on these committees to provide certain safeguards as per the mandates of the committees, such as recognition of risks, fair remuneration of management, strong internal controls, sound investment decisions and good communication with stakeholders.

The board will thus expect each governance committee to inform it of any risks or other issues of strategic importance, which it has discovered during the execution of its mandate.

The board will also expect to be given the assurance that, apart from the risks or issues specifically reported on, the committee has carried out all the functions required of it in a satisfactory manner and that no additional issues have come to its attention, which the board needs to consider.

Overall the board has expressed satisfaction with the active role played by each board committee in ensuring that the onerous responsibilities of the board are properly executed and addressed.

The board is satisfied that it has an independent Audit Committee.

This committee comprises a majority of independent, non-executive directors and is chaired by a lead independent non-executive director. The chief executive officer, chief financial officer and major financial and corporate disciplines throughout the group also attend committee meetings.

The Audit Committee generally meets three times in a year. In terms of the provisions of the Companies Act and its mandate, the committee attends to the following:

  • Annual internal and external audit planning and budgets;
  • Internal and external audit reporting;
  • Integrated reporting;
  • Integrity of controls and financial disclosure;
  • Appointment of external auditors and verification of independence;
  • Approval and recommendation of the annual financial reports, distribution to shareholders, liquidity and solvency tests and compliance assurance in terms of the Companies Act, IFRS and accounting policies;
  • Governance frameworks;
  • Tax strategy and risks; and
  • Combined assurance in terms of risk, audit and compliance.

It ensures appropriate reporting of the going concern recommendations and supports the board actively in ensuring that appropriate corporate governance and information technology frameworks are in place and are being maintained as such.

The Audit Committee annually considers the major tax strategies and risks in terms of legislation, structuring of proposed transactions and prevailing tax issues affecting the group via the Tax Risk Committee.

The Investment Committee comprises non-executive directors only. The executive directors attend the meetings as well. This committee meets three times per year under the guidance of its chair, also the lead independent non-executive director. This committee is responsible for various matters and its mandate has been expanded to include the management of liabilities as well. The committee attends to:

  • Investment philosophy and investment management;
  • Growth transactions and joint venture partnerships;
  • Investment performance;
  • Funding requirements and equity structuring;
  • Liability management;
  • Review of post-implementation audit reports of investments made.

This committee meets twice a year and is chaired by the chairman of the board. It comprises non-executive directors only and meetings are attended by the chief executive officer and the company secretary. Nomco is the caretaker of governance and compliance with King IV and the board charter and is mandated to:

  • Consider the composition of the board of directors, taking the business and size of the company and the commercial and sector imperatives in which, the company operates, into account;
  • Determine and recommend targets for race and gender representation;
  • Determine the independence requirements and the appointment of a lead independent director;
  • Identify the required fields of knowledge, skills, experience, culture, age, gender and race in order to service such requirements;
  • Ensure a transparent and formal nomination, election and ultimately an appointment process;
  • Invite nominations for candidates for appointment, subject to the provisions of the Companies Act and the Codes on Corporate Governance;
  • Recruit and appoint candidates that meet the “fit and proper” criteria as directors; and
  • Evaluate the performance, efficiency, balance and diversity of the board of directors.

This committee meets twice a year and comprises non-executive directors only. The chairman is a non-executive director. The corporate divisions, mainly Corporate Services and Human Resources, attend meetings on invitation. Remco attends to the following:

  • Recommendations regarding non-executive and executive directors’ remuneration to the board and shareholders;
  • Reviews and ensures application of the remuneration philosophy;
  • Ensures sound incentive scheme management and reasonable and appropriate salaries/wages;
  • Ensures appropriate succession planning for the executive directors and management; and
  • Employment equity.

The remuneration philosophy and policy are dealt with in detail in the remuneration report as part of the integrated report published annually. The report explains the practical application and implementation of remuneration governance in support of the recommendations for the remuneration of directors for a particular year.

This committee comprises non-executive and executive directors and is chaired by a non-executive director. Management and all other divisions are exposed to the committee by means of a structured work plan. The committee met twice during the year. This committee plays a strategic role in guiding the board in its strategic plans. It analyses strategic and operational risks at all levels. During the year under review the committee reviewed its risk management plan and risk appetite once again and presented these to the board for approval.

Risk management is applied throughout the Senwes Group. It is understood that risk management will assist with ensuring the long-term sustainability of Senwes. The current risk culture within the company contributes to the creation of shareholder value on a sustainable basis that is consistent with shareholders’ expectations. The reporting structure is as follows:

  • Chief risk manager and risk officers;
  • Exco;
  • Compliance Committee; and
  • Risk Committee.

The risk management functions report continuously on material risks and opportunities of the group, as well as those of each operational business unit or joint venture.

The committee is responsible for the oversight of some of the other board committees as provided for in the Companies Act. The committee is chaired by an independent non-executive director and generally meets twice a year. It comprises non-executive directors only. The committee is responsible for, inter alia:

  • Labour matters;
  • Transformation and B-BBEE-matters;
  • Consumer protection and sound business practices;
  • Code of ethics and code of conduct;
  • Sustainable culture and values;
  • Stakeholder engagement; and
  • Sustainability and concomitant integrated sustainability reporting.

The Social and Ethics Committee has carried out its statutory obligations in terms of its mandate and the committee confirms that the group conducts its affairs diligently and responsibly as required in terms of good corporate citizenship. The committee reviewed and was satisfied with the sustainability report as presented to the shareholders.

Company Secretary

The board collectively and the individual board members are guided by the company secretary in the execution of their continued responsibilities and duties. Newly appointed directors undergo an appropriate induction process, presented by the company secretary, which contains various elements. As required in terms of the Companies Act, the company secretary supervises compliance with legislation throughout the group. The appropriate structures in this regard have been established through structures such as the Compliance and Ethics Committee, reporting to management as well as the Risk and Audit Committees.

All directors have access to the services of the group company secretary. The group company secretary is not a member of the board. The board is satisfied that an arm’s length relationship exists between it and the group company secretary.

King IV Principles

The group believes that good governance can contribute to living its values through enhanced accountability, strong risk and performance management, transparency and ethical and effective leadership.

The board’s governance oversight is guided by its commitment to its responsibilities and governance objectives achieved through the application of the principles and practices as articulated in King IV. These are:

Leadership, ethics and corporate citizenship

The board sets the tone and leads the group ethically, effectively and responsibly. This means that, in decision-making, individual board members act with independence of mind, competence, diligence and conservatism.

The board, as the highest decision-making body, forms the intellectual thoughts of the company and each director has a fiduciary responsibility and trusteeship in respect thereof. Directors must therefore commit themselves to this responsibility and ensure that it is executed in a conscientious manner.

The group is a key role player within rural areas and communities in providing employment, training and financial contributions to municipalities. Often Senwes is the largest business in an area and its sustainability is depended on by communities. The group’s contribution to the fiscus is also substantial.

The group supports the high levels of ethical conduct and sustainability at all levels. A web-based sustainability report is available separately on Senwes’ website and explains these aspects more comprehensively.

Strategy, performance and reporting

The board takes accountability for the performance of the group. In so doing, the board supports the group in setting and achieving its strategic objectives.

Governing structures and delegation

The board provides guidance and oversight to the group on the management of compliance risk, remuneration governance as well as the enterprise-wide risk management function, which fully support good governance practices.

There is a clear division between the rights, responsibilities and competencies of the non-executive and executive authority in order to ensure a balance of power and authority, such that no one individual has unfettered decision-making powers.

Governance of functional areas

The focused governance of functional areas such as risk, compliance, IT and technology, remuneration and assurance are delegated to the different board committees. The chairmen of these committees formally report comprehensively to the board on these matters. Specific focus has been placed on the development of a digitisation strategy.

Stakeholder relationships

The board ensures a stakeholder-inclusive approach and the stakeholder engagement policy is reviewed regularly. The aim of the group’s strategy is to create sustainable value for all stakeholders and for Senwes to become a preferred investment partner, employer, supplier and distribution channel, as well as a good corporate citizen.

The principles of King IV have been adopted as far as practically possible but given the current shareholder structure, the company does not apply certain principles of King IV:

Principle 7

The board does not comprise a majority of independent directors;

Principle 8

The non-executive chair of the board is not an independent director but is supported by a duly elected and experienced independent non-executive vice-chair, who was also elected as the lead independent director.

The chair of the board is also the chair of the Nomination Committee, while the chair of the Remuneration Committee is not independent but is a non-executive director.

The company applies the principles of King IV in all instances, except in relation to the board composition reported above.

Protection of and Access to Information

The company complies with the Access to Information Act, 2000 and a PAIA manual in this regard, as well as the Protection of Personal Information Act, 4 of 2013, is available on the company’s website.

Shareholders also have access to the shares register, minutes of shareholders’ meetings and information regarding a number of the company’s matters. Any enquiries may be addressed to the company secretary as the deputy information officer.

Compliance with Legislation

The board accepts responsibility for compliance with all applicable legislation and regulatory requirements. This is reported via the internal Compliance and Ethics Committee, chaired by the company secretary, and is then reported to the Risk Committee and in certain instances to the Audit Committee as well.