Governance

Wilson Bayly Holmes-Ovcon Limited (WBHO) recognises that accountability and transparency are fundamental to investor trust and commercial sustainability. In order to provide a clear and transparent view of how the organisation is run, and by whom, along with the responsibilities and principles that guide and inform its decision-making processes, the corporate governance structures and processes of the organisation are outlined in detail in this section of the WBHO website.
Guiding principles
Through its board of directors, WBHO endorses, and is committed to, the recommendations of the King Code of Corporate Governance Principles for South Africa (King III); the dictates of the Companies Act No 71 of 2008; and the JSE Listings Requirements.WBHO recognises that being a ‘good corporate citizen’ requires the organisation to deliberate and act with fairness, responsibility, transparency and accountability, and to consider more than just its financial performance, appraising the short- and long-term impacts of its operations on society and the environment at the same time.
Governance structure
The following diagram outlines the governance structure of the organisation.

Governance reporting

Further information regarding the current corporate governance issues and focus areas of the organisation can be found in the Governance and remuneration review of the latest WBHO online integrated report.

While the board of directors retains overall accountability for the organisation, it delegates the daily running of the group to the CEO and the executive directors. The board also delegates specific responsibilities to the following committees:


The Audit and risk committee fulfils the two separate functions of audit and risk. From an audit perspective, the committee provides oversight of the financial reporting and disclosures of WBHO, including all corporate reporting. From a risk perspective, the committee develops strategies to mitigate or exploit the risks identified and prioritised by the risk management team.

Composition:
Chairperson :
Nomgando (Gando) Matyumza
Members :
Nonhlanhla Mjoli-Mncube - Independent non-executive director
James Ngobeni - Independent non-executive director
Ross Gardiner - Independent non-executive director
Nosipho Damasane - Independent non-executive director

Every member of the Audit and risk committee is an independent non-executive director. The committee is chaired by the Lead independent non-executive director. The committee meets at least four times a year to discuss audit-related issues and at least twice a year to discuss risk-related issues. Shareholders approve and re-elect committee members at the annual general meeting of the company. The CEO, CFO, members of senior management, Internal and External Auditors, chairman of the Operational Risk Committee (ORC), and representatives of the external auditors attend committee meetings by invitation.

Role of the committee from an audit perspective
The audit committee provides oversight of the financial reporting and related disclosures of the group, including all corporate reporting. The committee also obtains external assurance on the effectiveness of internal controls and the veracity of the financial statements included in the annual integrated reports of the company. Its primary objectives, which are outlined in the Audit committee charter, are to:

  • monitor the adequacy of financial controls and reporting;
  • review the audit plans of the external and internal auditors and their adherence to these plans;
  • review, and recommend for adoption by the board, all financial information that will be disclosed publicly;
  • consider the extent of non-audit services undertaken by the external auditors;
  • ensure that the financial reporting of the group complies with International Financial Reporting Standards (IFRS) and the Companies Act of South Africa;
  • review and make recommendations to the board on all financial matters; and
  • consider the expertise and experience of the CFO.

The terms of reference of the committee allow for it to hold closed sessions with the internal auditors, the external auditors and management. Both internal and external audit have direct access to the chairman of the committee. The committee meets its statutory requirement to ensure that the external audit function is independent from the company and recommends the external auditor to the shareholders for reappointment at the annual general meeting. It also approves the scope of, and fee for, external audit services and monitors compliance with non-audit services.

Role of the committee from a risk perspective
The committee oversees the governance of risks faced by the group. Its primary objectives are to:
  • establish and maintain an understanding of the risk universe that needs to be addressed if the group is to achieve its objectives;
  • ensure that a thorough business risk assessment is undertaken and that a risk profile is compiled by management;
  • monitor the risk management of the group; and
  • satisfy corporate governance reporting requirements.

The management of WBHO has identified and ranked the risks faced by the group (view the current strategic risk profile for further information) and, in turn, the committee has developed strategies that will allow the business to benefit from the opportunities presented by some of these risks, as well as mitigating the potentially negative impact of others.
The Nomination committee identifies and recommends individuals for board appointments. Members of the committee consider specific skills, board composition requirements and gender when nominating candidates. The committee is also responsible for ensuring the integrity of the nomination process. The Nomination committee identifies and recommends individuals for board appointments. Members of the committee consider specific skills, board composition requirements and gender when nominating candidates. Currently chaired by the lead independent director, the committee is also responsible for ensuring the integrity of the nominating process. Its principal responsibilities, which are outlined in the Nomination committee charter, are to ensure that:

  • directors are appointed through a formal process;
  • induction and ongoing training and development of directors take place; and that
  • formal succession plans for the board, CEO and senior management appointments are in place.

  • Composition:
    Chairperson :
    Nomgando (Gando) Matyumza
    Members :
    James Ngobeni - Independent non-executive director
    Ross Gardiner - Independent non-executive director
    Savannah Maziya - Independent non-executive director


The role of the Remuneration committee is to assist the board in ensuring that directors, executives and senior management of the company are fairly and responsibly remunerated, and that the disclosure of director remuneration is accurate, complete and transparent.

Composition:
Chairperson :
Savannah Maziya - Independent non-executive director
Member :
Ross Gardiner - Independent non-executive director


The committee consists of at least two independent non-executive directors and it is currently chaired by non-executive director, Savannah Maziya. Senior executive management is invited to meetings to provide adequate background to the matters that are debated. Meetings take place biannually, at times when bonuses are awarded and when increases are decided.Subsidiaries in Australia are governed by a separate remuneration committee, consisting of executive board members, which follows similar procedures to those conducted in South Africa. The final authorisation of Australian increases and incentives is given after a detailed presentation has been made to the Chairman, CEO and CFO of WBHO.

Responsibilities of the committee
Remco reports directly to the main board of WBHO and submits all of its decisions to the board for final ratification. Its major responsibilities, which are outlined in the Remuneration committee charter, include:

  • assisting in the planning and structuring of the company remuneration policy;
  • determining both executive and non-executive packages;
  • advising on performance and other incentive-based schemes for both executives and employees;
  • reviewing and recommending to the board all proposals for executive share-based and other short- and long-term incentive schemes;
  • advising on the conditions stipulated in employment contracts for the executive directors of the company and other members of executive management, with appropriate notice periods;
  • and scrutiny of all benefits, including retirement and medical aid funds and other financial arrangements.

Annual decisions the committee is required to make:
  • Authorisation of amendments to remuneration policy documents;
  • Determination of annual total cost to company (TCC) increases and short-term incentive bonuses, having given consideration to:
    • the financial performance of WBHO;
    • inflation;
    • benchmarking against general increases in the construction industry;
    • individual performance; and
    • factors relating to guaranteed pay.

  • Guaranteed pay levels of all executives;
  • Assessing whether or not the prescribed performance criteria have been achieved by the company and for key individuals; and
  • Allocation of shares, specifically for the senior executives, in terms of the various group share incentive schemes.
The broad-reaching mandate of the Social and ethics committee is to act as the ‘conscience’ of the organisation and to ensure that WBHO conducts itself as a responsible corporate citizen. To perform this function, the committee monitors and informs the activities of the organisation from a variety of perspectives, including: social and economic development; ethical standards and decision-making; environmental, health and public safety accountability; responsiveness to stakeholders; and labour and empowerment
Composition:
Chairperson :
Members :
Nomgando Matyumza - Independent non-executive director
Terry Armstrong - Group Procurement Director
Shereen Vally-Kara - Group Company Secretary
Andrew Logan - Group Financial Manager

objectives.

The Social and ethics committee fulfils an oversight role from a compliance perspective and its primary functions, which are outlined in the Social and ethics committee charter, are to:

  • ensure that WBHO conforms to all appropriate legislation and codes of best practice;
  • ensure that the United Nations Global Compact (UNGC) principles, in terms of labour and human rights, are upheld;
  • obtain confirmation of adherence to environmental and health and safety laws; and
  • advance the empowerment and transformation objectives of WBHO (which include preferential procurement, corporate social investment and emerging contractor development).
The Executive committee (ExCo) assists the CEO in the day-to-day management of the group. It provides organisational direction on behalf of the board of directors and is responsible for all material matters not directly managed by the board. ExCo recommends policies and strategies to the board and, once these have been approved, monitors and coordinates the implementation of these strategies.

The board of Wilson Bayly Holmes-Ovcon Limited (WBHO) is responsible for setting the strategic objectives of the organisation. It retains full and effective control of the company and is responsible for the implementation of the corporate vision of the organisation.

The board is also responsible for the appointment and removal of the Chief Executive Officer (CEO) of the company.The board of directors recognises its central, pivotal role from the perspective of governance and its responsibility to ensure that the organisation conducts itself in a fair, responsible, transparent and accountable manner.

The board endorses, and is committed to, the recommendations of the King Code of Corporate Governance Principles for South Africa (King III); the dictates of the Companies Act No 71 of 2008; and the JSE Listings Requirements. As well as ensuring it has clear terms of reference in place and the appropriate balance of skills and experience within its ranks to fulfil its mandate, the board takes the necessary steps to ensure that these recommendations and requirements are applied in a practical manner across the group.

Each year, WBHO applies the King III self-assessment standards to the current governance practices and behaviours of the organisation and this register is available for download.

Charter
In line with the recommendations of King III, the board has adopted a charter to guide its effective functioning. The charter describes its role; responsibilities; powers; composition requirements; and meeting procedures.

Code of conduct
The board of directors also determines the values and ethics of WBHO and has introduced a code of conduct, which describes a clear set of values, policies and procedures and applies to all employees. The code of conduct is regularly reviewed and, if necessary, updated by the board.

Committees of the board
While the board retains overall accountability for the organisation, it delegates the daily running of the group to the CEO and the executive directors. The board also delegates specific responsibilities to a number of board committees, such as the audit and risk, nomination, remuneration and social and ethics committees.

Further, detailed information regarding the mandates and performance of these committees is available in the board committees section of the WBHO website.

Identifying and interacting with key stakeholders
The board identifies its key stakeholders as 'those upon whom the WBHO group may impact' and 'those who may impact upon the group'. Key stakeholders include: shareholders; clients; suppliers; employees; investment analysts; regulatory authorities; the JSE Ltd; government; banks and financial institutions; and the media. Board members maintain a proactive dialogue with these stakeholders through a variety of appropriate mechanisms and mediums.

Induction and rotation of board members
As part of their induction to the board, all newly-appointed directors receive formal and informal training related to the group and their duties as directors. Directors are provided with ongoing support and resources that allow them to extend and refresh their skills and knowledge of the business. The board is also provided with information on any change in legislation or regulations and is briefed on market-related developments.

One third of the board retires in rotation, at which time they indicate whether they are available for re-election at the annual general meeting. For further information, see the charter of the board of directors.

Board composition and attendance
For information regarding the composition of the current board and attendance at board and management committee meetings, please see the please see the Downloads section of the WBHO online integrated report.

Conflicts of interest
Potential conflicts of interest are discussed during meetings of the board and these conflicts are disclosed appropriately, as prescribed by the Companies Act and the JSE Listings Requirements.

Dealing in securities
In accordance with the JSE Listings Requirements, directors and all members of senior management who are privy to the results of the group are prohibited from dealing in the securities of the group during a closed period. Directors and senior management are obliged to inform the Chairman and obtain his consent before dealing in the shares of the group. The Company Secretary records these dealings.

The Executive Committee (ExCo) assists the CEO in the day-to-day management of the group. It is responsible for all material matters that are not the responsibility of the board. It recommends policies and strategies and monitors and coordinates the implementation of these strategies.

Members of the Executive committee

Risk is inherent in all of the business activities of the group. By embedding risk management in to company business processes in a practical way, a structural means for identifying, prioritising and managing the risks associated with WBHO business activities is created.

The board is, ultimately, responsible for risk governance and determines the level of risk tolerance within the organisation. The board reviews the risk profile of the organisation annually. As part of this process, the board relies on the Risk committee and the Internal audit department to review and report on strategic, tactical and operational risks.>

View our current Strategic Risk Profile.

Remuneration for people employed or contracted with WBHO is determined by management with reference to the remuneration policy and with overview from the remuneration committee (remco), a committee of the main board. The policy is aligned to strategy and reviewed regularly. In the current year, remco performed a gap analysis between the remuneration policy and King III guidelines. This highlighted the requirement for the proposed 2013 WBHO share plan. The report takes cognisance of the concerns raised by shareholders in the prior period, but does not disclose certain detail which is consider strategically confidential to WBHO.

Employees at all levels of WBHO are considered to be the most important factor contributing to the success of the group. Our remuneration policy and procedures contribute to our ability to retain all of our competent and experienced staff.There is a culture that is inherent within the WBHO group that needs to be sustained. It has been part of the group since it began in 1970. It has evolved, and will continue to evolve, with WBHO into the future. The longevity of management and the passing on of skills and experience has allowed us to maintain the important basic attributes of our culture. It is inherent in the ethos of WBHO to retain, motivate and attract highly competent employees and offer them a future career within the group.Underlying the success of WBHO are policies and procedures that are followed and continually developed, adapted and adopted according to the changing environment. The remuneration committee guides and assists WBHO in the ongoing development of the policies and procedures that support remuneration in WBHO.

View related part note in FY13 remuneration and shareholdings of the board
View further information about remuneration committee
Download our remuneration policy
Download the remuneration committee charter
WBHO addresses ethics and corruption through the Social and ethics committee. Our ethical standards and practices are promoted and maintained through a code of conduct and an anonymous fraud hotline, WBHO Alert. The group code of conduct describes a clear set of values, policies and procedures and applies to all WBHO employees. It covers a wide range of ethics and corruption-related topics and policies, including gifts and sponsorships, irregularities, theft, fraud and whistle blowing. If an employee would like to report or discuss something anonymously, he or she can contact WBHO Alert using the free telephone service number 0800-202-121 or by emailing wbhoalert@telkomsa.net.

WBHO also subscribes to the fundamental principles of human rights enshrined in the South African Constitution, the South African Bill of Rights and the ten principles of the United Nations Global Compact (UNGC). The policies and practices of the group are aligned with these principles and the organisation upholds the rights of all people to be treated with dignity and in a culturally appropriate manner. WBHO advocates the elimination of all forms of forced or compulsory labour and the employment of children younger than 18 years of age. Processes are in place to ensure that any breaches of human rights can be reported and investigated.