A formal board charter confirms that the directors are accountable to shareholders and are responsible for the following:
A clear division of responsibility is embedded in the board charter, with the board chaired by an independent non-executive chairman. The board has delegated authority to the chief executive officer for the implementation of the strategy and the ongoing management of the business.
COMPOSITION AND DIVERSITY OF THE BOARD
Lewis Group has a unitary board structure consisting of five non-executive directors and two full-time, salaried executive directors. The board confirms that it has the appropriate mix of knowledge, skills, experience, diversity and independence to objectively discharge its governance role and responsibilities.
The board’s diversity policy is aimed at enhancing diversity. In 2021, the board retained the voluntary targets for female representation and racial diversity on the board at 30%. Currently 43% of board members are female and 43% are black in terms of the Broad-Based Black Economic Empowerment (B-BBEE) Act. Independent non-executive director Tapiwa Njikizana is Zimbabwean by birth and is therefore not included for purposes of the B-BBEE Act.
Duncan Westcott sadly passed away on 19 August 2021. His passing necessitated changes to certain board committees, with Daphne Motsepe being appointed as the chairperson of the audit committee on 17 September 2021 and chairperson of the risk committee on 22 November 2021. Fatima Abrahams was also appointed as a member of the audit committee on 17 September 2021.
Directors do not have a fixed term of appointment and are subject to retirement by rotation and re-election by shareholders at the AGM at least every three years. Directors are required to retire at the next AGM after they turn 70 unless the board decides at its discretion that a director may continue to hold office. Directors appointed during the year are required to have their appointments ratified at the following AGM. The chairman is elected by the board at the board meeting following the AGM each year. Executive directors are subject to 12 to 24-month notice periods.
Directors are required to annually evaluate their independence and declare their interests in other entities. They are further required to declare any conflicts of interest in relation to matters on the agenda at board meetings. The nominations committee further reviews the independence of all non-executive members when reviewing the composition of the board.
Non-executive director Adheera Bodasing previously provided consulting services to Lewis Stores through Polarity Consulting.
These services were ended in 2021 and Adheera commenced a two-year ‘cooling-off’ period before she can be classified as an independent non-executive director.
The board was satisfied that all directors exercise independent judgement and act in an independent manner.
All directors participate in the annual evaluation of the board’s performance. The questionnaire-based evaluation covers the board’s role and agenda setting; the size, independence and composition of the board; director orientation and development; board meetings; board committees; board accountability and governance practices. The process also includes an assessment of the performance of the chairman, chief executive officer and the company secretary.
In addition, the chairman has individual sessions with each director where necessary.
The evaluation concluded that the board was satisfied with its overall functioning and governance.
The Audit Committee conducted a formal written evaluation of the appropriateness of the expertise and adequacy of the resources in the finance function and the experience of the senior members of management responsible for the financial function.
The committee is satisfied that the expertise and experience of the chief financial officer and the finance function is appropriate to meet the required responsibilities of the position.
After the end of the reporting period, the company secretary Ntokozo Makomba resigned with effect from 30 April 2022. Ryan Lepart was appointed as the acting company secretary for an interim period before the permanent appointment of Marisha Gibbons with effect from 1 June 2022.
The company secretary acts as adviser to the board and plays a pivotal role in ensuring compliance with regulations, the induction of new directors and providing advice to directors on governance, compliance and their fiduciary responsibilities.
The company secretary acts as secretary for all board committees.
The directors have unrestricted access to the advice and services of the company secretary. They are entitled to seek independent professional advice at the company’s expense after consultation with the chairman of the board. No directors exercised this right during the year.
The board conducted a formal evaluation of the company secretary, as required by the JSE Listings Requirements. The directors are satisfied that the company secretary has the requisite competence, qualifications and experience to perform the role as set out in section 88 of the Companies Act of 2008.
The board is satisfied that it meets the King IV principle of having an arm’s length relationship with the company secretary and confirms that the company secretary is not a director of any of the Group companies and is not related to any of the directors. As such, the board confirms that an arm’s length relationship has been maintained between the board and the company secretary.
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 and the directors confirm that the committees have functioned in accordance with these written terms of reference during the financial year.