Board committees

The board of directors has delegated specific responsibilities to five board committees. The committees are all chaired by independent non-executive directors. Each committee has a charter and terms of reference.

LEWIS GROUP AUDIT COMMITTEE
Purpose and function			Composition
•	Approving the internal audit plan and reviewing the activities and findings of the department.		Chairman – Hilton Saven The committee consists of three independent non-executive directors. The directors are financially literate and suitably qualified to perform their role. Meetings are also attended by the chief executive officer, chief financial officer, company secretary, internal audit executive and the external auditors.
•	Evaluating the performance of the internal audit function.
•	Reviewing the audit plan of the external auditors, providing guidance on non-audit services.
•	Assessing the independence and objectivity of the external auditors.
•	Considering significant differences of opinion between management and internal or external auditors.
•	Reviewing the adequacy of internal controls and internal financial controls.
•	Ensuring regulatory compliance.
•	Overseeing the integrated reporting process, which includes:
	–	reviewing the financial reporting system, evaluating and approving accounting policies and the financial information issued to stakeholders in terms of IFRS.	Meetings
	–		Four per year
	–	reviewing disclosure on sustainability to ensure it is reliable and does not conflict with the financial information.
•	Reviewing the expertise, resources and experience of the company’s financial function and financial director.
•	Monitoring the ethical conduct of the company, its directors and senior executives.

LEWIS GROUP RISK COMMITTE
Purpose and function			Composition
•	Annually reviewing the risk management policy and plan and recommending these for approval to the board.		Chairperson: Hilton Saven The committee consists of six independent non-executive directors and one non-executive director. Meetings are also attended by the chief executive officer, chief financial officer, company secretary, internal audit executive and chief risk officer.
•	Making recommendations on risk tolerance and appetite.
•	Annually reviewing the risk register of strategic and key operational risks.
•	Monitoring implementation of the risk management policy and plan.
•	Assessing the effectiveness of the system and process of risk management based on assurance gained from management and written assessment from Internal Audit on the effectiveness of internal controls and risk management.
•	Reviewing and advising on the adequacy of insurance cover for recommendation to the board.		Meetings
•			Four per year
•	Assessing the environmental and social sustainability of the group.
•	Overseeing IT governance and the function of the IT Steering Committee by:
	–	ensuring that an IT charter and policies are established and implemented;
	–	ensuring that an IT internal control framework is adopted and implemented; and
	–	receiving independent assurance on the effectiveness of the IT internal controls.

LEWIS GROUP NOMINATION COMMITTEE
Purpose and function		Composition
•	Establishing a formal process for the appointment of directors.	Chairperson: David Nurek The committee consists of six independent non-executive directors and one non-executive director. The chief executive officer attends meetings at the invitation of the committee.
•	Overseeing a formal induction programme for new directors and continuing development programmes for all directors.
•	Ensuring directors receive regular briefings on changes in risks, laws and the environment in which the group operates.
•	Ensuring succession plans are developed for the chief executive officer and senior management.
•	Confirming annually that none of the directors have become disqualified (fit and proper test).	Meetings
•		Two per year
•	Ensuring the board has the required skills, experience and qualities.

LEWIS GROUP REMUNERATION COMMITTEE
Purpose and function		Composition
•	Ensuring the remuneration policy is aligned with the group’s strategic objectives and encourages individual performance.	Chairman: Ben van der Ross The committee consists of six independent non-executive directors and one non-executive director. The chief executive officer attends meetings at the invitation of the committee.
•	Reviewing incentive schemes to ensure continued contribution to shareholder value.
•	Approving the award of share incentives.
•	Reviewing and approving compensation of executive directors, non-executive directors and senior executives.
•	Ensuring executive directors are fairly rewarded based on market trends, surveys, individual performance and contribution.	Meetings
•		Two per year
•	Recommending non-executive directors’ fees for shareholder approval.
•	Ensuring employee benefits are suitably disclosed.
•	Ensuring practices are compliant with relevant legislation and regulation.

LEWIS GROUP TRANSFORMATION COMMITTEE
Purpose and function		Composition
•	Developing and maintaining a transformation strategy.	Chairperson: Fatima Abrahams The committee consists of two independent non-executive directors, together with the chief executive officer, merchandising director, human resources director and corporate social responsibility manager.
•	Approving the transformation programme.
•	Approving targets in terms of the Codes of Good Practice of the Department of Trade and Industry (“DTI”).
•	Evaluating the group’s performance against the DTI scorecard.
•	Confirming legislative compliance.
•	Monitoring of socio-economic development expenditure.
		Meetings
		Two per year

Lewis Stores (Proprietary) Limited

Lewis Stores (Proprietary) Limited is the main trading subsidiary of the group and operational responsibility has been delegated to the Lewis Stores board for the ongoing management of the business.

Lewis Stores Board
Purpose and function:

Adoption of strategic plans.
Providing strategic direction to senior management.
Monitoring operational performance and management.
Preparation and integrity of financial statements and all related information.
Maintaining adequate accounting records.
Adequately safeguarding, verifying and maintaining accountability of assets.
Monitoring key performance indicators of the business.
Ensuring regulatory and legislative compliance.
Risk management.
Overseeing the corporate code of conduct.

Composition:
Chairman: Johan Enslin
The board consists of six executive directors, namely the chief executive officer, chief financial officer, and the directors of credit risk, merchandising, human resources and information technology.
Meetings: three per year

Governance committees of Lewis Stores

Executive Committee consists of 14 members, including the six directors of Lewis Stores, and the heads of key areas of operation within Lewis. The committee meets three times a year in conjunction with the Lewis Stores board meetings.
Risk Working Group consists of the 14 members of the Executive Committee. The group meets three times a year in conjunction with the Lewis Stores board meetings. Refer to page 51 for their responsibilities, which are supervised by the Risk Committee.
Information Technology Steering Committee meets quarterly and comprises the chief executive officer, chief financial officer, IT director as well as business systems and IT operations executives.
The committee is responsible for:
- ensuring that the implementation of the IT policy and plan conforms to the objectives of the IT charter;
- aligning IT with the business needs of the group;
- prioritising investment decisions relating to IT resources;
- sourcing decisions relating to IT services;
- identifying and exploiting IT opportunities;
- administrative and contractual decisions which have a significant impact;
- monitoring IT costs and capital expenditure;
- a process to monitor, prioritise and co-ordinate the IT project portfolio;
- reporting to the Risk Committee on the performance of its duties;
- implementing COBIT as its principle IT internal control framework; and
- implementing ISO 27000 as the Information Security Management System (“ISMS”) standard.
Business Continuity Planning Steering Committee manages the business continuity plan (“BCP”) which assesses potential environmental disasters, disruptions, loss of utilities and services, equipment or system failure and other emergency situations. The committee meets in conjunction with the Information Technology Steering Committee meetings. The BCP covers all the key business processes identified as critical to the functioning of the group. The plan is tested periodically in a simulated environment. The committee comprises the chief executive officer, chief financial officer and IT director. The committee reports into the Risk Committee.

Monarch Insurance Company Limited (Monarch)

Monarch is the group’s short-term insurer. Knowledge and experience of short-term insurance is considered in appointing directors to the board. Two of the non-executive directors, Robert Shaw and Ray Sanger, provide insurance advisory services to Monarch.

A formal report on the investment portfolio by Sanlam Investment Management is presented at each board meeting, covering market conditions and expectations, asset allocation, investment returns, review of the investment portfolios and recommendations on the investment strategy.

Monarch board
Purpose and function:

Overseeing relationships with stakeholders of the company along sound governance principles.
Approval and oversight of strategic plans for the insurer within the parameters of the overall strategic direction of the group.
Approval of budgets.
Providing oversight of performance against targets and objectives.
Providing effective leadership on an ethical foundation.
Regular review of underwriting criteria.
Adoption of asset allocation strategies for the investment portfolio, based on recommendations from Sanlam Investment Management which manages the portfolio on Monarch’s behalf.
Review of the performance of the investment portfolio against benchmarks.
Ensuring regulatory compliance.
Overseeing key performance and risk areas.
Ensuring effective risk management and internal control.
Assessing director selection, orientation and evaluation.
Approving significant accounting policies.
Approving the annual financial statements.

Composition
Chairman: Alan Smart
The board consists of four nonexecutive directors and one executive director.

Meetings
Four per year

Monarch Audit and Risk Committee
Purpose and function

Reviewing the internal and external audit plans relative to the group’s audit plan.
Providing guidance on non-audit services.
Considering significant differences of opinion between management and internal or external auditors.
Ensuring regulatory compliance. The committee is also responsible for the group’s compliance with the Financial Advisory and Intermediary Services Act.
Reviewing the financial reporting system, evaluating and approving accounting policies and approving the financial statements.
Reviewing the adequacy of internal controls and internal financial controls.
Annually reviewing the risk register of strategic and key operational risks. Monitoring implementation of the risk management policy and plan.
Addressing risks specific to the company that have been identified in the group risk management process.
Assessing the effectiveness of the system and process of risk management based on assurance gained from management and written assessment from Internal Audit on the effectiveness of internal controls and risk management.

Composition
Chairman: Hilton Saven
The committee consists of four non-executive directors.
Meetings are attended by the chief financial officer, company secretary, the group’s internal audit executive, the chief risk officer and external auditors.

Meetings
Four per year.