| Balance of rights, relationships, roles and responsibilities |
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| “Corporate governance is
the system that maintains
the balance of rights,
relationships, roles and
responsibilities of
shareholders, directors and
management in the direction,
conduct, conformance and
control of the sustainable
performance of the company
with honesty and integrity in
the best long-term interests
of the company and both
business and community
stakeholders.” [Business
Governance Handbook by
John & Leigh Hendrikse]. |
Introduction
Our financial management department
implements and oversees procedures which
must be followed in preparing financial
reports and tax assessments. It also ensures
that adequate risk control measures are
in place. This includes proper insurance
cover for directors’ liability, product liability,
general liability, motor liability, business
interruption, credit default debts, and the
group’s assets.
Taking into account the structure of the
board and the decentralised nature of the
group’s operations, the position of chairman
has remained with Bruno Steinhoff, who
continues to play a key executive role. The
roles of the chairman and chief executive
officer (CEO) are, however, clearly defined
and have been separated. In conducting its annual assessment of the composition of the board, the nominations committee reviews and assesses not only prescribed factors such as length of service, but also the performance-related independence of individual non-executive directors. |
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| At the annual general meeting of shareholders to be held on 10 December 2007, the notice of which appears on pages 225 to 231 of this report, shareholders will be asked to approve the appointment of an additional two independent, non-executive directors. |
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Should these proposed appointments be
approved, the majority of directors serving
on the board will be non-executive. This will
ensure the appropriate balance between
executive and non-executive directors
as recommended by the code. In all other
areas covered by the code, Steinhoff is fully
compliant.
The group constantly reviews and, where
required, adapts its structures, processes and
policies to take into account internal
developments and accommodate externally
recognised standards of best practice as they
evolve. In all dealings, we strive to ensure
that the interests of our stakeholders are
foremost in our decisions and that they are
fully informed of the process. We believe
that a corporate culture of compliance with
applicable laws, regulations, internal policies
and procedures is a core component of good
corporate governance. This culture of good
corporate citizenship in each jurisdiction in
which we operate serves to maximise
sustainable returns and to provide all
stakeholders with the assurance that the
group’s businesses are being
managed
appropriately. |
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| The board |
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| THE BOARD CHARTER |
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| The board operates under an approved
charter which regulates the way business is
conducted by the board, in line with the
principles of sound corporate governance.
The board charter, which is modelled on the
principles recommended by King II,
incorporates the powers of the board and
provides a clear division of responsibilities and
sets out the accountability of board members,
collectively and individually, to ensure an
appropriate balance of power and authority. |
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| The company’s strategy on
risk is to assume prudent risk,
which is then appropriately
managed and mitigated, in
exchange for measurable
rewards. |
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| BOARD OF DIRECTORS |
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The board of directors is responsible to
shareholders for setting the direction of
Steinhoff by establishing strategic objectives
and key policies.
Our board of directors currently consists of
12 directors, seven of whom are executive
directors. Full details of the current board
appear on page 52 to 55 of this annual
report. Messrs Claas Daun, Dirk Ackerman,
Jannie Mouton, Dr Len Konar and Dr
Franklin Sonn are classified as independent
non-executive directors in accordance with
the guidelines in King II. The non-executive
directors, drawing on their respective skills
and business acumen, bring impartial and
objective viewpoints to the board’s decision making processes and to the group’s
standards of conduct. These non-executive
directors enjoy significant influence in
deliberations at board and committee
meetings. Collectively, Steinhoff’s directors
have a wide range of business-related
expertise, as well as significant experience in
financial, commercial and furniture industry
activities. Directors are appointed on the
basis of skill, acumen, experience and on
their actual or potential level of contribution
to and impact on the activities of the group.
Terms of office of non-executive directors
are subject to three-year rotation provisions,
while executive directors are appointed for
terms of office not exceeding five years,
subject to the company’s general conditions
of service. Notwithstanding that the articles
of the company provide that it is not required
for executive directors to be re-elected on
the three-year rotation basis, it is currently
the company’s practice for one third of all
directors to retire under the
rotation
system.
The nominations committee, which meets at
least once a year, makes recommendations
to the board on the appointment of executive
and non-executive directors and on the
composition of the board. The board, having
due regard for the recommendations of the
nominations committee, makes such appointments to the board as it may deem
appropriate, subject to the approval of
shareholders to these appointments being
obtained at subsequent annual general
meetings.
At the annual general meeting to be held on
10 December 2007, shareholders will be asked
to approve, individually, the appointment of an
additional two independent, non-executive
directors, namely Mr DC Brink and Ms Y Cuba.
The curricula vitae of these directors appear in
the notice to shareholders on page 226 of this
report. These proposed appointments have
received the support of both the nominations
committee and the board. Should these
appointments be approved, the majority of
directors serving on the company’s board will
be
non-executive.
Directors are required to dedicate sufficient
time to be able to monitor, evaluate and
comment effectively to the board and
management on the financial and operational
information supplied to the board.
All directors have access to management,
including the company secretary and the
legal department, and to information
required to carry out their duties and
responsibilities fully and effectively. Directors
are encouraged to stay abreast of the group’s
business through independent site visits and
meetings with senior management. Directors are provided with guidelines on their duties
and responsibilities and a formal orientation
programme has been established to
familiarise incoming directors with the
group’s businesses, competitive posture,
strategic plans and objectives and corporate
governance requirements.
The board meets at least four times annually
and more frequently if required. Directors
declare their interests in contracts and other
appointments at all board meetings.
Meetings are conducted according to a
formal agenda, ensuring that all substantive
matters are properly addressed.
The main responsibilities of the board include: |
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regularly reviewing the strategic direction
of investment decisions and performance
against approved plans, budgets and bestpractice
standards; |
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determining policy and processes to
ensure the integrity of the group’s risk
management, internal controls,
communication and reporting; |
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monitoring and evaluating the company’s
performance against approved budgets
and prevailing economic conditions; |
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approving major capital expenditure
programmes and significant acquisitions
and disposals; |
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assuming ultimate responsibility for
regulatory compliance, notwithstanding
the delegation by the board of certain
powers and authorities to executive
management. The board is ultimately
responsible for the retention of full and
effective control over the group. Decisions
on material matters are reserved by the
board (including but not limited to capital
expenditure, procurement, property
transactions, borrowings and investments
other than at pre-approved materiality
levels); |
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processing, selecting and appointing
directors on the recommendation of the
nominations committee. The board also
reviews and considers structured
management succession planning to
identify, develop and advance future
leaders in the group; this being an
important element in the management
process; and |
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evaluating the board’s performance and
that of the individual directors. An annual
self-evaluation process to review the
effectiveness of the board, individual
directors and board committees has been
entrenched and provides an invaluable
tool in ensuring the ongoing efficacy of
the board and its committees, and in
assessing the individual performance and
contributions of the directors. |
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| Collectively, Steinhoff’s
directors have a wide range of
business-related expertise, as
well as significant experience
in financial, commercial and
furniture industry activities.
Directors are appointed on
the basis of skill, acumen,
experience and on their
actual or potential level of
contribution to and impact on
the activities of the group. |
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| ATTENDANCE AT BOARD MEETINGS |
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11 September 2006 |
4 December 2006 |
7 March 2007 |
4 June 2007 |
| BE Steinhoff |
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| MJ Jooste |
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| DE Ackerman |
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| CE Daun |
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–* |
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| KJ Grové |
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| D Konar |
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| JF Mouton |
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| FJ Nel |
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| FA Sonn |
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–* |
| NW Steinhoff |
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Resigned 7 March 2007 |
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| IM Topping |
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| DM van der Merwe |
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| JHN van der Merwe |
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| *Absent with apology. |
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