The committee consists of three independent non-executive directors. The members are financially literate and suitably qualified to perform their role. The remaining non-executive directors attend by invitation. Meetings are also attended by the chief executive officer, chief financial officer, company secretary, internal audit executive, chief risk officer and the external auditors.
The Audit Committee meets four times a year.
The Group’s independent non-executive chairman (Mr Saven) also serves as a member of the Audit Committee. King IV recommends that the chair should not be a member of the Audit Committee. The board determined that his experience, expertise and skills are required for continuity and the efficient functioning of the Audit Committee.
The committee consists of four independent non-executive directors and two executive directors.
Meetings are also attended by the company secretary, internal audit executive, the chief risk officer and the information technology general manager.
The Risk Committee meets four times a year.
The committee consists of six non-executive directors. The chief executive officer attends meetings at the invitation of the committee.
The Nomination Committee meets twice a year.
The Remuneration Committee meets three times a year.
The committee consists of four independent non-executive directors and one executive director. Meetings are also attended by the company secretary, directors’ of human resources and merchandise and senior managers responsible for socio-economic development and sustainability
The Social, Ethics and Transformation Committee meets twice a year.
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.
Purpose and function
The board consists of six executive directors.
The board meets three times a year.
Consists of 23 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
The risk working group consists of the CEO, CFO and all relevant executives and senior management of the group.
The group meets quarterly and reports to the Executive Committee as well as to the Lewis Group Risk Committee and Monarch audit and risk committee. Refer above for their responsibilities, which are supervised by the Lewis Group risk committee.
Information Technology Steering Committee
Meets quarterly and comprises the chief executive officer, chief financial officer, IT director, IT general manager as well as business systems and IT operations executives. The committee reports into the Risk Committee. The committee is responsible for:
Monarch is the group’s short-term insurer. Knowledge and experience of short-term insurance is considered in appointing directors to the board. Robert Shaw, a non-executive director provides insurance advisory services to Monarch.
A formal report on the investment portfolio by Sanlam Investment Management, who manage the portfolio on Monarch’s behalf, is presented at each board meeting, covering market conditions and expectations, asset allocation, investment returns, review of the investment portfolios andrecommendations on the investment strategy.
The Lewis Group chief executive officer attends meetings at the invitation of the committee.
The Monarch board meets four times a year.
The committee consists of three independent non-executive directors. The members are financially literate and suitably qualified to perform their role. The remaining non-executive directors, Monarch CEO and Lewis Group CEO attend by invitation. Meetings are also attended by the company secretary, internal audit executive, the chief risk officer and the external auditors.
The Monarch Audit and Risk Committee meets four times a year.
In terms of the Companies Act, non-executive director Robert Shaw is deemed to be a material supplier to Monarch and is therefore precluded from being a member of the Audit and Risk Committee.
The board is responsible for the oversight of the risk management process and has delegated specific responsibility to the Risk Committee.
The committee is responsible for ensuring the group has implemented an effective policy and plan for risk, and that disclosure regarding risk is comprehensive, timely and relevant.
A dedicated chief risk officer is responsible for the risk management process to identify, assess and manage potential risks and opportunities that may affect group strategies and objectives. The risk management framework includes the risk management policy, risk appetite, relevant responsibilities and the risk management plan.
The Risk Working Group (RWG) is responsible for designing and implementing the risk management process and monitoring ongoing progress. Senior executives and line management within each business unit are accountable for managing risk in achieving their financial and operating objectives.
The focus of the risk management process is on strategic and key operational risks. A top-down approach is applied by the business units in the group in assessing the risks on a quarterly basis. The RWG reviews the registers with a focus on:
The RWG also develops the risk appetite and obtains board approval through the Risk and Audit Committees. Senior executives and line management are responsible for implementing the risk appetite and reporting any material deviations above the approved threshold limits.
The risks identified by the business units are consolidated by category of risk into a group register and the results of the group risk assessment are reported to the Risk Committee of Lewis Group and the Audit and Risk Committee of Monarch Insurance.
The key risks are documented under the Strategy tab.
The group’s external insurance and self-insurance programmes cover a wide range of risks. The insurance levels and insured events are reviewed annually to ensure adequate cover and amended after taking into account changed processes and emerging risks.
A well-established control environment, which incorporates risk management and internal control procedures, exists to provide reasonable but not absolute assurance that assets are safeguarded and the risk facing the business is being adequately managed. The board confirms that during the period under review the group has maintained an efficient and effective process to manage key risks. The directors are not aware of any current or anticipated key risks that may threaten the sustainability of the business.
The board is satisfied that the group will be a going concern for the foreseeable future, based on the budget and cash flows for the year to 31 March 2019, as well as the current financial position. The financial statements have therefore been prepared on the going concern basis. The board is apprised of the group’s going concern status at the board meetings coinciding with the interim and final results.
The internal audit function provides information to assist in the establishment and maintenance of an effective system of internal control to manage the risks associated with the business. Internal audit has performed a written assessment confirming the effectiveness of the company’s system of internal control and risk management, including internal financial controls. The role of internal audit is detailed in the internal audit charter which has been approved by the Audit Committee. Refer to the Audit Committee report in the annual financial statements.
Information technology (IT) governance is integrated into the group’s operations, and governance practices and frameworks are reviewed as part of the annual internal audit plan. The IT steering committee is responsible for IT governance and reports into the Risk Committee.
An insider trading policy restricts directors and specific staff from dealing in the shares of Lewis Group during closed periods. The closed periods are effective from the end of the interim and annual reporting periods until the financial results are disclosed on SENS. Embargoes are also placed on share dealing when the group is trading under a cautionary statement.
Directors are required to obtain written clearance from the chairman of the board prior to dealing. The chairman is required to obtain written permission from the chairman of the Audit Committee. It is mandatory to notify the company secretary of any dealings in the company’s shares within three business days. This information must be published on SENS within 24 hours of the notification of such dealing. A register of share dealings by directors is maintained by the company secretary and reviewed by the board.