Principles of Corporate Governance

Vunani Limited’s board is committed to an open and disciplined governance process based on integrity, transparency, independence and accountability and recognises that this is a developing process that serves the good of shareholders and stakeholders alike.

The board recognises its duty and responsibility to act in accordance with the JSE Limited’s (JSE) Listings Requirements and to ensure that the principles set out in King II Code of Corporate Governance (King II) are observed.

The Board of Directors

The board meets at least quarterly to review and monitor the performance of the group and executive management. The board maintains full and effective control of the group through senior management and subsidiary boards. An executive forum (EXCO) comprising the executive directors is responsible for the day to day running of the business. The board considers and approves group strategy, corporate governance, policies and compliance structures, risk management and internal control policies and structures, business continuity plans and board composition. All material decisions are considered by the board or an appropriate sub-committee thereof.

Attendance at board meetings during the 2009 financial year was as follows:

*Independent
** AF Pieterse, who was due to retire by rotation at the Company’s annual general meeting held on 20 August 2009, did not make himself available for re-election and accordingly his appointment as a non-executive director terminated on that date.

The board composition reflects people with different skills, knowledge and experience, all of whom are cognisant of the duty to ensure that the group maintains a high standard of corporate governance. The roles of the chairman and CEO are separated.

The non-executive directors are independent of management and promote the interests of stakeholders. Three of the non-executive directors are independent in terms of the King II classification. Whilst AF Pieterse represents ABSA’s 20% interest in Vunani, he is otherwise independent in terms of all other criteria as detailed in King II.

The board undertakes the role of nominations committee and the selection and appointment of new directors is agreed to by the board as a whole. In terms of the Articles of Association, one-third of the directors, excluding the CEO, are required to retire each year by rotation. The retiring directors are eligible and may make themselves available for re-election.

There are no service contracts for non-executive directors. The executive directors have service contracts with the group terminable upon one month’s written notice. No executive director has a fixed term contract.

Non-executive directors receive fees for services and directors and as members of board committees. Fees are determined and agreed by the board.

Board Committees

The board has established an audit sub-committee with specific responsibilities which is chaired by an independent non-executive director. Attendance at audit committee meetings during the course of the 2009 financial year was as follows:

The auditors have unrestricted access to all records, assets and employees of the group as well as to the chairman of the audit committee. The chairman of the audit committee has unrestricted access to the group’s management, employees, minutes and reports of the auditors. The committee has adopted formal terms of reference which have been adopted by the board. The group does not have an internal audit function. All internal controls, risk management and compliance are the responsibility of the chief financial officer. This process, however, is reviewed annually and will develop with the natural expansion of the business.

The investment committee is chaired by WC Ross and consists of the executive directors. Its terms of reference are to review proposed investments which exceed management’s authorised levels. It is responsible for the evaluation of the risks and exposure of potential investments.

The remuneration committee meets annually to review the performance of the executive directors and is responsible for determining conditions of employment and remuneration packages of executives.