Board of directors

BOARD CHARTER

A formal board charter confirms that the directors are accountable to shareholders and are responsible for the following:

  • ensuring that the company’s short-, medium- and long-term strategy, as developed by management is reviewed and approved;
  • providing oversight of performance against targets and objectives;
  • assessing the group as a going concern;
  • approving the annual and interim financial statements;
  • providing effective leadership on an ethical foundation;
  • overseeing key performance and risk areas;
  • ensuring effective risk management and internal control;
  • responsibility for overseeing IT governance;
  • overseeing legislative, regulatory and governance compliance;
  • ensuring appropriate remuneration policies and practices;
  • overseeing director selection, orientation and evaluation;
  • ensuring balanced and understandable communication to stakeholders;
  • overseeing relationships with stakeholders of the company along sound governance principles;
  • ensuring that the company is playing its role as responsible corporate citizen; and
  • matters considered crucial for business success.

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 six 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.

In November 2016 the board adopted a gender diversity policy to improve the representation of women on the board. In 2018, this policy was extended and the board adopted a combined gender and race policy to further improve diversity with a 25% target for both gender and race diversity on the board.

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Changes to the board of directors

During the reporting period, Tapiwa Njikizana was appointed to the board and as a member of the audit, risk, remuneration and nomination committees. Alan Smart retired from the board on 2 April 2020. Hilton Saven resigned from the audit committee and Daphne Motsepe was appointed to the audit committee.

Directors do not have a fixed term of appointment and non-executive directors are subject to retirement by rotation and re-election by shareholders at least every three years. Directors appointed during the year are required to have their appointments ratified at the following AGM. 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. The chairman is elected by the board after the AGM each year. Executive directors are subject to 12 to 24-month notice periods.

Non-executive directors are invited to serve on the board based on their knowledge, experience, independence and ability to contribute to board level debate.

Independence of directors

The independence of all non-executive directors is reviewed annually by the Nominations Committee, as recommended by King IV. Adheera Bodasing provides certain consulting services to Lewis Stores Proprietary Ltd through Polarity Consulting. Even though these services are insignificant to Lewis and to Polarity Consulting, the Nominations Committee have classified her as a non-executive director. The board was satisfied that all directors exercise independent judgement and act in an independent manner.

Board evaluation

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.

The evaluation concluded that the board’s overall functioning and governance met the required standards and areas for improvement are being addressed.

Chief financial officer and finance function evaluation

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.

Company secretary

Ms Ntokozo Makomba was appointed as company secretary with effect from 11 June 2018.

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 (Ntokozo Makomba), 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.

The board is comfortable that it meets the King 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.

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 and the directors confirm that the committees have functioned in accordance with these written terms of reference during the financial year.