Committee reviews

The Board has mandated 10 committees, comprising suitably skilled directors, to oversee and govern their respective areas. Committee chairmen give written (and then verbal) feedback to the Board at Board meetings. In addition, the Group Chairman reports back on the activities of WIMI, as dealt with at the board of Absa Financial Services Limited.

The mandates, membership and the tenure of committee members, as well as the key activities of each committee during 2017 follow here. Each committee considered its gaps relative to King IV and amended its terms of reference and activities in response. This is not specifically mentioned in the write-ups below.

Directors’ Affairs Committee
Members Period served Attendees
Wendy Lucas-Bull (Chairman)
Colin Beggs
Mohamed Husain
Paul O’Flaherty
René van Wyk (from April 2017)
Trevor Munday
Maria Ramos
Jason Quinn
Mandate
The Committee is mandated to assist the Board in establishing and maintaining an appropriate system of corporate governance for the Group. This includes board and committee composition for all entities, induction of new Board members, director training and skills development, Board and committee effectiveness evaluations, and reviewing and proposing governing policies, and matters of regulatory and reputational risk.

Covered, among others:

  • the Group’s governance structure, focusing on non-executive director succession planning, to establish and maintain optimal size, composition and independence;
  • matters of reputational risk including those issues arising from the Public Protector’s release of the final report on the Bankorp matter, and the Competition Commission matter regarding foreign exchange trading;
  • matters surrounding regulatory engagements and commitments, in particular the Group’s relationships with the various regulators in South Africa and the Rest of Africa in light of the Separation; and the implementation of Twin Peaks in South Africa;
  • executive succession planning;
  • appointments of chairmen to subsidiary bank boards and non-executive directors to the Absa Financial Services board;
  • appointments of members of the Group Board, and committee membership changes;
  • the policy in respect of race and gender diversity at Board level; and
  • increased discretion limits for the Executive Committee (and resultant limits for Board committees) and mandating this committee to operate at a more strategic level.

The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference and relevant legislation and regulation.

The Committee’s themes for 2018 include regulatory relationships; overseeing the Separation from a governance point of view; Board composition and transformation; and enhancing the Board’s engagement with major subsidiaries by implementing the Group-wide governance framework.

Group Audit and Compliance Committee
Members Period served Mandatory invitees
Colin Beggs (Chairman)
Alex Darko
Daisy Naidoo
Mohamed Husain
Paul O’Flaherty
René van Wyk (from February 2017)
Tasneem Abdool-Samad
Wendy Lucas-Bull
Maria Ramos
Jason Quinn

Attendees
Chief Internal Auditor
Chief Risk Officer
Head of Compliance
External auditors

Mandate
The Committee is accountable for accounting policies and the annual financial statements and reports; oversees the quality and integrity of the Group’s integrated reporting; is the primary forum for engagement with internal and external audit; and monitors the Group’s control and compliance environment.

Covered, among others:

  • the Group’s progress on preparing to implement IFRS 9 (Financial Instruments) from 1 January 2018 (addressing data requirements, retaining skilled resources and assessing macroeconomic factors) and the scope of external and internal audit in relation thereto;
  • impairments in the Retail and Wholesale portfolios given the evolving macroeconomic environment, and the potential impact of IFRS 9;
  • the alignment of the annual financial reporting processes across Africa;
  • the stability of payments and settlements;
  • the establishment of a centralised ‘converged security’ strategy, incorporating cyber, information and fraud risk;
  • together with the Directors’ Affairs Committee, the Group’s position on and relationship with KPMG South Africa, in light of the allegations against the audit firm;
  • the control environment, particularly in light of the additional impact of the Separation;
  • the approach to tax risk management and tax planning, introducing more transparent tax disclosures and new tax requirements;
  • the review by Operational Risk, Internal Audit and Compliance of their respective target operating models, including resourcing of the relevant teams having regard to the demands of the Separation and general regulatory change;
  • the embedment of a combined assurance model and the framework for the assurance of external reports;
  • compliance with applicable Regulatory requirements, including by the National Credit Regulator and Financial Intelligence Centre in South Africa, and in-country data centres in the Rest of Africa; and
  • management’s assessment of the performance of the external auditors and their accreditation for 2017.

The Committee is satisfied (i) that it has complied with its terms of reference, and (ii) with the overall control environment, including those aspects supporting the financial statements for 2017, as confirmed by Internal Audit and our external auditors.

In 2018, the Committee will continue to monitor further improvements in the control environment, as well as identified areas, such as cybercrime, financial crime, and fraud; and the effects of new accounting standards.

View the full Group Audit and Compliance Committee statement within our consolidated and separate financial statements.

Group Risk and Capital Management Committee
Members Period served Attendees

Trevor Munday (Chairman until end
March 2017; remains a member)
René van Wyk (Chairman from April 2017; a member from February 2017)

Colin Beggs
Daniel Hodge
Jason Quinn
Maria Ramos
Mark Merson
Paul O’Flaherty
Wendy Lucas-Bull

Chief Internal Auditor
Chief Risk Officer
Head of Compliance
Group Treasurer
External auditors
Mandate
The Committee assists the Board with matters relating to risk, capital and liquidity management within the Group. It receives assurance that processes are in place to comply with laws and regulations pertaining to risk, capital and liquidity management in the relevant jurisdictions.

Covered, among others:

  • cyber risk issues and developments, having regard to the inputs of the Information Technology Committee;
  • key regulatory developments that may affect the Group’s capital position such as the recovery and resolution framework and certain Basel Committee on Banking Supervision (BCBS) developments;
  • business continuity/resilience management and the respective metrics, programmes and testing;
  • the status of, and management’s compliance with, the BCBS 239 standard that looks to risk data aggregation and risk reporting, and the related data management initiatives;
  • risk implications of the Separation relating to the three-year transitional outsourced arrangements with Barclays PLC;
  • the predicted impact of the IFRS 9 impairment models on the Group’s capital ratios;
  • the treasury execution strategy in response to a potential sovereign downgrade;
  • the nine principal risks (credit risk, market risk, treasury and capital risk, insurance risk, operational risk, model risk, legal risk, conduct risk and reputation risk) and management actions in relation thereto;
  • current and projected Group capital levels both on a normalised and IFRS basis;
  • current and projected Group funding and liquidity levels, including the liquidity coverage ratio and Basel III net stable funding ratio and the related contingency funding plan; and liquidity risk appetite;
  • the issuance of Additional Tier 1 (preference shares) and Tier 2 capital (subordinated debt) at Group level under the domestic medium-term notes (DMTN) programme for investment in Absa Bank;
  • taking up a collateral liquidity facility from the South African Reserve Bank from 2018 to meet Basel III liquidity requirements; and
  • Stress testing for the integrated planning (budgeting) process for 2018, and reverse stress testing for regulatory purposes, both of which were positive in relation to the capital of the Group, even in highly stressed scenarios.

The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference, and remains comfortable with the levels of risk, capital and liquidity in respect of the regulated entities. In October 2017, the Committee participated in the liquidity stress simulation externally facilitated, and observed by the South African Reserve Bank.

In 2018, the Committee will continue monitoring the Group’s nine principal risks, having regard to changing economic and operational conditions and the execution of our Separation, as well as the current and projected levels of capital, funding and liquidity of all regulated entities.

Group Remuneration Committee
Members Period served Attendees

Paul O’Flaherty (Chairman)
Alex Darko
Mohamed Husain
Patrick Clackson (until end April 2017)
Wendy Lucas-Bull
Yolanda Cuba

Maria Ramos
Jason Quinn
Chief Executive: Human Resources
Head of Reward

Mandate

For the last three years, the Committee has focused on:

  1. improving the link between pay and performance;
  2. improving the balance of pay across the organisation;
  3. ensuring appropriate and compliant disclosure of remuneration principles, philosophies and outcomes;
  4. engaging with investors regarding our remuneration policy and disclosure;
  5. managing the implications of CRD IV on pay for Barclays Africa executives and material risk takers; and
  6. retaining key individuals in the context of the sell-down and Separation.

With the advent of King IV, the focus of the RemCo has been:

  1. revising our remuneration policy covering all elements of remuneration for all employees;
  2. a broader remit within the terms of reference to ensure wider coverage of remuneration; and
  3. intensified engagement with investors (being a broader base of minority shareholders, post sell-down) and other stakeholders to ensure feedback; and to communicate changes in policy and approach.

Covered, among others:

  • fair and responsible pay including salary benchmarks for all employees, with recommendations to address any anomalies;
  • updates from the executive Remuneration Review Panel on risk matters, compliance and conduct-related incidents, and the impact on compensation;
  • updates on European Banking Authority and Prudential Regulatory Authority guidelines and policy statements on compensation which will remain relevant until regulatory deconsolidation;
  • updates on pensions and benefits across the Group;
  • amendment to incentive funding methodology including a peer comparison of bonus pools and bottom-up re-build;
  • local and international trends in disclosure of executive pay;
  • proposals for retention of senior management through the Long-Term Incentive Plan for 2017 – 2020 and the related financial and non-financial performance metrics; and
  • the international mobility strategy and related frameworks.

The Committee is satisfied with the status of remuneration and incentives in the Group, within the current regulatory environment in which the Group operates, provided that more work will be done towards equitable pay across the organisation. It spent considerable time developing appropriate financial and non-financial performance conditions linked to the Long-Term Incentive Plan, in order to align to the interests of our shareholders, while remaining market competitive in this area. We are and will continue to align to King IV (i) in considering fair and responsible pay, and the best way to measure and report this; and (ii) in developing and publishing an updated remuneration policy for our shareholders to consider.

Going forward, time will be spent reviewing and approving the reward component of the new corporate strategy launched in 2018 and, in particular, ensuring reward is aligned to local market conditions post regulatory deconsolidation from Barclays PLC.

Social and Ethics Committee
Members Period served Attendees

Mohamed Husain (Chairman)
Francis Okomo-Okello
Maria Ramos
Monwabisi Fandeso (from September 2017)
Wendy Lucas-Bull

David Hodnett
Peter Matlare
Chief Executive: Human Resources
Chief Executive: Marketing
and Corporate Relations
Head of Compliance
Group General Counsel

Mandate

The Committee monitors key organisational health indicators, including ethics management; talent retention and acquisition; labour turnover; wellness; learning and development reach and spend; employee relations; diversity and inclusion; conduct and reputation risks; and the Group’s activities having regard to any relevant legislation and codes of best practice on matters relating to:

  • social and economic development;
  • good corporate citizenship;
  • ethics and conduct;
  • sustainable development;
  • labour and employment;
  • consumer relations;
  • stakeholder management;
  • transformation;
  • the environment; and
  • health and safety.

The Committee oversees and evaluates management’s performance against the Balanced Scorecard on all non-financial matters.

Covered, among others:

  • the code of conduct (The Barclays Africa Way), which outlines the Purpose and Values which govern our ways of working across our business; and the related conduct and reputation risk frameworks;
  • the outcomes of Internal Audit and Compliance’s assurance activities on conduct and ethics;
  • the Employment Equity Plan for 2017 – 2022 and the BEE scorecard (and developments regarding the Financial Sector Charter;
  • the key indices against which Barclays Africa reported disclosures in 2016 (Carbon Disclosure Project; Dow Jones Sustainability Index; FTSE 4Good Environmental Social Governance Index); and the sustainability frameworks and disclosures against which we will report going forward;
  • the advertising and marketing approach; advertising campaigns; the sponsorship portfolio; and the performance of the Barclays Africa brand having regard to the impact of the Separation;
  • the Group’s environmental targets and impact (energy; water; carbon; renewables; and paper);
  • the status of premises’ health and safety; related assurance programmes; and the introduction of technology to better track, manage and report health and safety;
  • the approach to customers in certain key businesses including retention strategies, complaint management, and actions to address thematic root causes;
  • necessary actions to fully comply with King IV’s provisions on ethics, stakeholder engagement, and citizenship going forward;
  • the stakeholder engagement framework (including the critical stakeholder identification principles and the stakeholder management approach); and
  • the execution of the Shared Growth strategy (Citizenship initiatives, targets and spend), and the Citizenship strategic governance review to streamline Citizenship governance, and to re-focus activities in line with the post sell-down business strategy and brand development.

The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference.

The Committee will continue focusing on stakeholder management, good corporate citizenship, customer relationships, conduct and reputation risk, ethics management, labour and employment matters, diversity and inclusion, and broad-based black economic empowerment.

Information Technology Committee
Members Period served Attendees

Alex Darko (Chairman) (from May 2017)
Ashok Vaswani (until end June 2017)
David Hodnett
Jason Quinn
Maria Ramos
Monwabisi Fandeso (from September 2017)
Patrick Clackson (until end April 2017)
Peter Matlare
Wendy Lucas-Bull

Chief Information Officer
Chief Operations Officer
Chief Risk Officer

Mandate
The Committee assists the Board with effective oversight and governance of technology and information for Barclays Africa. King IV distinguishes between governance oversight of (i) the organisation’s information assets, and (ii) the technology infrastructure used to generate, process and store that information. The Committee’s mandate has been updated accordingly.

Covered, among others:

  • technology stability, resilience, and risk in South Africa and the Rest of Africa;
  • top technology priorities:
    • customer stability and live security threats;
    • regulatory commitments; and
    • technological separation from Barclays PLC;
  • technology cost analysis and investment spend (and related benefits);
  • the analysis of change impact (volumes) and remedial actions taken on people risk (key man dependencies, and unexpected events);
  • management’s actions to improve operational stability of the Group’s payments systems;
  • core infrastructure and platforms in the Rest of Africa operations;
  • progress on a new digital strategy, to strengthen the Group’s position as a digital bank in Africa;
  • progress on the implementation of the Group’s cybersecurity strategy, noting the build-out of local capacity in this area having regard to the Separation;
  • progress of disaster recovery and data centre migration in South Africa, as well as the Rest of Africa;
  • implementation of the Group’s technology strategy, focusing on reducing the application portfolio, moving applications to more efficient platforms and the continuous engineering of processes, applications and development;
  • engagement with various regulators regarding the use of a production cloud environment;
  • improvement of system availability and stability and its impact on customers and employees, as well as the Group’s ability to respond to incidents; and
  • together with the Board Finance and Group Risk and Capital Management committees, outsourcing of certain IT services to external providers, in relation to the Separation.

The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference.

The Committee will continue its focus on the Barclays Africa infrastructure, system availability and stability, technology risk, converged security, people risk within technology, data centre migration, cloud migration, digital transformation and innovation, and technology separation in 2018.

Board Finance Committee
Members Period served Attendees

Yolanda Cuba (Chairman)
Colin Beggs
Mark Merson
Paul O’Flaherty
Trevor Munday
Wendy Lucas-Bull

Maria Ramos
Jason Quinn

Mandate
The Committee assists the Board in approving certain levels of investments and types of transactions within its mandate. The Committee is also mandated by the Barclays Africa and Absa Bank boards to consider and approve their dividend declarations within the parameters determined by the boards, and to finalise the profit commentary as it relates to interim and year-end financial results.

The Committee considers, and recommends to the Board the medium-term plan developed in terms of the Group strategy.

Covered, among others:

  • progress of the property consolidation strategy upgrades throughout the portfolio;
  • the disposal of certain private equity investments; and supplier and outsource contracts with technology providers in particular for local area network, wide area network, voice, and ATM services;
  • taking up of an inaugural loan from the China Development Bank;
  • development of the international operations strategy for securities and payment licences in the context of the Separation;
  • a committed liquidity facility from the South African Reserve Bank pursuant to the Basel III liquidity requirements;
  • outsourcing certain IT applications maintenance and development, supported by the GRCMC and the ITC; and
  • the medium-term plan for 2018 – 2020 including the Separation contributions received and financial implications thereof.

The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference, and will continue executing its mandate and challenging management on the setting of budgets relative to the Group’s new strategy as well as approving investments and disposals.

Credit Concentration Risk Committee
Members Period served Other quorum members

Trevor Munday (Chairman until end
March 2017; remains member)
René van Wyk (Chairman from
April 2017)

Daisy Naidoo
David Hodnett
Jason Quinn
Maria Ramos
Wendy Lucas-Bull
Yolanda Cuba

Chief Credit Officer
Chief Risk Officer

Mandate
The Committee’s main mandate is to consider and approve all large exposures including single-name exposures, key country risk limits, mandate and scale limits, and maximum exposure guideline levels with reference to the risk appetite of the Group as approved by the Board from time to time.

Covered, among others:

  • mortgages and unsecured lending mandate and scale;
  • levels of wholesale and retail credit including material concentrations, watch list clients as well as sector and geographic trends;
  • key sectors including agriculture (primary and secondary), banking, manufacturing, mining and metals, property, retail, power, and public sector;
  • foreign exchange rate risk;
  • country and sovereign limits for the Group’s Rest of Africa portfolio and specific reviews of Kenya, Ghana, and Nigeria;
  • stress triggers; stress losses; and mandate and scale; and
  • credit facilities to those clients above 10% of the Group’s qualifying capital and reserves.

The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference and relevant legislation and regulation, and in particular to large exposures. The Committee’s coverage was expanded to include the retail sector in the year under review.

The Committee will continue to undertake industry and product-specific reviews, having regard to prevailing economic conditions and assessing the risk profile of the Group’s large exposures and concentrations in the context of risk appetite.

Models Committee
Members Period served Attendees

Jason Quinn (Chairman)
David Hodnett
Maria Ramos
Chief Risk Officer

Peter Matlare
Head: Model Risk and Development
Chief Executive: WIMI

Mandate
The Committee is the designated committee responsible for approving Barclays Africa’s material risk models on inception and annually thereafter, in accordance with guidelines set out in the relevant policy and by the South African Reserve Bank and other applicable regulatory requirements.

Covered, among others:

  • model development and implementation priorities for 2017, particularly the development of new IFRS 9 retail and wholesale models for South Africa and Rest of Africa, in advance of their implementation on 1 January 2018;
  • the reconciliation between Barclays Africa’s retail and wholesale credit economic capital; and regulatory capital;
  • business acceptance for economic capital risk;
  • progress on the development and implementation of IT infrastructure to support the governance of models;
  • the Group’s regulatory capital, economic capital, wholesale, retail impairment models (both IAS 39 and IFRS 9) and other Group-level material models in accordance with the model risk policy and based on the recommendations of the independent validation unit; and
  • the implementation of appropriate post-model adjustments.

The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference.

The Committee will continue monitoring compliance with regulatory standards set by the South African Reserve Bank and other regulators in 2018.

Separation Oversight Committee
Members Period served Attendees

Wendy Lucas-Bull (Chairman)
Alex Darko (from July 2017)
Colin Beggs
David Hodnett
Jason Quinn
Maria Ramos
Mohamed Husain
Paul O’Flaherty
Peter Matlare (from September 2017)
René van Wyk (from March 2017)
Trevor Munday
Chief Risk Officer

Separation Project Director
Group General Counsel

Following Barclays Africa’s announcements on 31 May and 1 June 2017 (terms of Separation signed, and Barclays PLC’s sell-down of its interest in Barclays Africa from 50.1% to 23.4%) the Committee (established as an ad hoc committee in March 2016) amended its terms of reference (and its name) to reflect its revised mandate to provide oversight of the execution of the Separation. Specific decisions in relation to the Separation activities rest with the relevant Board committees, in accordance with their respective mandates. This Committee will remain in place until the completion of the Separation (approximately three years).

Covered, among others:

  • the transitional governance framework in terms of the Separation Agreement which applies until regulatory deconsolidation, and the governance structure put in place to manage the Separation to conclusion;
  • the critical path to Separation with appropriate sequencing, dependencies, capabilities, capacity and migration management;
  • progress, scope management and the impact of regulatory and stability changes;
  • prioritising and managing strategic investments as a single book of work across the business;
  • the status of service management by Barclays PLC under the three-year Transitional Service Agreement (comprising 129 material service schedules);
  • various regulatory submissions, and the regulatory engagements with (i) the South African Reserve Bank and the Prudential Regulatory Authority as part of the process for Barclays PLC to achieve regulatory deconsolidation, and with (ii) the regulators for the Rest of Africa countries (who are also updated through the College of Regulators facilitated by the South African Reserve Bank);
  • application for and setting up of certain international entities in the United Kingdom and United States with trading licences for business previously performed by Barclays PLC;
  • Barclays PLC providing the cash equivalent of 1.5% of Barclays Africa shares (R1 891m) to the independent Absa Empowerment Trust in September 2017, and the appointment of independent trustees to that structure;
  • the further reduction by Barclays PLC of its shareholding in Barclays Africa to 14.9% on 1 December 2017;
  • the manner in which the necessary capital support is provided to each of the Rest of Africa country banks to enable the required Separation investments to be made; and
  • the overall financial impact and implications of the Separation, including actual project spend in 2017, and the projected Separation spend for 2018 and beyond.

The Committee noted the risk management that is being applied throughout the Separation programme with appropriate risk assessments, including through independent assurance and internal audit. The Committee is satisfied that it has fulfilled its responsibilities, in accordance with its terms of reference, and will continue acting on its mandate and provide robust challenge to management through the Separation programme.