Key elements of our corporate governance

Our Board Charter

Our Board Charter is the foundation for our governance principles and practices. The charter:

  • outlines our Board committees’ mandates and specifies which matters are reserved for the Board;
  • defines separate roles for the Group Chairman and Chief Executive Officer;
  • dictates the Board’s expectations of the directors, the chairmen of our Board committees and the lead independent director; and
  • sets out how the corporate governance provisions in King IV, the Companies Act, the Banks Act and the JSE Listings Requirements will be put into practice.

Conduct and ethics

Our Board appreciates the importance of ethics and its contribution to value creation and is committed to instilling ethical values throughout the Group, beginning with individual directors’ conduct which, if appropriate, will in turn have a positive impact on conduct risk in the Group.

We are committed to the highest standards of integrity and ethical behaviour, and our code of conduct outlines the Values and behaviours that govern our way of working across our business. This code fosters values-based decision-making and demonstrates how our policies and practices align with our Values.

Management is responsible for embedding ethical conduct in the organisation which is overseen by the Social and Ethics and the Directors’ Affairs committees.

Directors’ appointments

The Directors’ Affairs Committee, comprised of independent members only and chaired by the Group Chairman, formally facilitates and recommends directors’ appointments for ultimate approval by the Board.

The magnitude and complexity of the Group determines our Board’s composition, and we have diverse criteria for candidates to ensure robust governance, keen commercial decision-making and strong technical inputs.

New members are thoroughly inducted into the business, engaging with business executives and functional experts (including risk, finance, treasury, human resources, compliance and internal audit) for a holistic understanding of the Group.

Roles on the Board

The Board’s structure balances the directors’ powers so that no individual has unfettered authority in discussions or decision-making. The distinct roles of the Chief Executive Officer, Group Chairman, Lead Independent Director and non-executive directors are defined in the Board Charter. All executive directors are engaged on standard employment contracts, subject to short-term notice periods.

Board effectiveness review

The Board’s effectiveness is underpinned by that of its individual directors and its support system.

We assessed the effectiveness of the Board, committees, Group Chairman and individual directors, and held peer reviews in January 2017 which showed the Board was performing well overall. Remedial actions for areas requiring improvement were implemented with some receiving ongoing focus.

In view of the increased activities relating to the Separation in 2017, and the revision of the Group’s strategy, the Board decided that it would be more beneficial to hold the next evaluation at the end of 2018. In line with recommendation of King IV, we have taken a decision to adopt biennial reviews, which will allow for sufficient time to remedy identified matters.

Directors standing for re-election will have their performance evaluated based on a previous year’s assessment, together with other recent and apparent factors.

Application of King IV

Applying King IV brought about changes to our governance processes, including:

  • transitioning from an annual to a biennial Board effectiveness review;
  • the inclusion of a gender and race diversity policy and related targets in our Board Charter;
  • a heightened focus on combined assurance and coverage of the three lines of defence;
  • more extensive disclosures on remuneration practices;
  • a detailed review of our stakeholder-inclusive practices and policies, with a view to create a more comprehensive and effective stakeholder management regime; and
  • developing a Group-wide governance framework to improve the inclusivity of governance.

In our approach, we considered each principle and the underlying recommended practices against that which was already in policy or practice within the Group. The outcomes of the analysis were considered by the Board and relevant committees between November 2016 and September 2017.

Our assessment indicates that we apply all key aspects of the 16 Principles with room for improvement in Principles 14 (remuneration governance) and 16 (stakeholder relationships). Our asset and investment management businesses assessed their policies and practices against Principle 17 (responsibilities of institutional investors) and confirm that they are mostly compliant, with certain areas for improvement. Our progress by principle is outlined in Focus on King IV.

Our major subsidiaries will apply King IV proportionally, the basis of which will be defined through the development of our Group governance framework.

Conflicts of interest

Directors have a responsibility to avoid situations that put, or may be perceived to put, their personal interests in conflict with their duties to the Group. The Board Charter requires directors to declare any actual or potential conflict of interest immediately when they become aware of such situation. Before each scheduled meeting, each director submits a ‘declaration of interest’ form, outlining other directorships and personal financial interests, including those of their related parties. Where actual or potential conflicts are declared, the recusal procedure is implemented, and affected directors are excluded from discussions and any decisions on the subject matter of the declared conflict.

Actual and potential conflicts of interest are taken into account in the annual assessment of director independence.

Group Company Secretary

The Board evaluated the qualifications, competence and experience of Nadine Drutman (BCom, LLB, LLM), the Group Company Secretary, and remains satisfied that she is qualified for the role and confirmed her independence and arm’s-length relationship with the Board and its members.

Nadine advises the Board and individual directors on their fiduciary duties and on corporate governance requirements and practices. She has unfettered access to the Group Chairman, and her office is sufficiently resourced to perform its duties.

Subsidiary relations

King IV and the Separation are opportunities for us to refresh the governance arrangements with our major subsidiaries across Africa. Our Group governance framework, to be adopted by our major subsidiaries in 2018, will standardise the application of frameworks, policies and standards as well as management of discretions limits. It will provide clarity regarding roles and responsibilities of the Group and subsidiary boards and the proportional application of King IV by subsidiaries.

At the annual Africa chairmen’s conference in June 2017, business updates were provided, the Separation impacts were discussed, and thoughts on talent management, cloud technology, and the impact of the macro environment were shared.

The Group Chairman periodically holds calls with the chairmen of the major subsidiary boards to keep them apprised of matters pertaining to business performance, Barclays PLC’s sell-down of Barclays Africa shares, developments regarding the brand, and the Separation in general.

Peter Matlare, Deputy Chief Executive Officer: Rest of Africa Banking, engages the Rest of Africa subsidiary boards to proactively manage business performance and regulatory relations (the latter requiring significant time and commitment in light of the Separation).