Governance
review

Sound corporate governance and a commitment to high standards of business integrity is the cornerstone of our business. Altron is determined to deliver long-term value to all of our stakeholders and we recognise the importance of our governance structures and processes in ensuring the efficiency, effectiveness and sustainability of our organisation. Strong structures and controls and an unwavering commitment to ethical conduct help us to mitigate risk, ensure accountability and deliver against our strategy and objectives.

OUR BOARD OF DIRECTORS

The board and its sub-committees are responsible for ensuring that the group’s operations, processes and activities are underpinned by a strong system of governance that is fully integrated into all aspects of its business, while empowering management to execute and deliver against our strategy. The board remains accountable for the ongoing sustainability of the group.

At year-end the Altron board consisted of ten members, three of whom are black males and one who is a black female. Two are executive directors: the chief executive and the chief financial officer. Eight board members are non-executive directors, six of whom are independent.

Each of the Altron group’s subsidiary companies has separate boards of directors, which the Altron board and its committees oversee and guide. The subsidiaries are also governed by the limits of authority set by the Altron board. With the exception of the executive committee, all Altron committees are chaired by an independent non-executive director who attends our annual general meeting to respond to any shareholder queries. The committees are empowered to seek outside or other professional advice, as the members consider necessary, to carry out their duties. The Altron board continually assesses the appropriateness of the committees, as well as the need for further committees of the board to be constituted, to assist it in carrying out its duties and meeting its statutory and legislative requirements.

The board met ten times during the year. Attendance at the board and special board meetings, as well as attendance at sub-committee meetings, together with full biographies of each director, is available at www.altron.com.



2017 was a momentous year for the group in terms of its governance in that Dr Bill Venter, founder of the group, resigned from his role as non-executive chairman with effect from 28 February 2017. He was replaced by Mr Mike Leeming, previously the group’s lead independent non-executive director on the Altron board. Dr Venter assumed a non-executive director role on the board, as chairman emeritus, with effect from 1 March 2017.

Mr WK Groenewald has been appointed as the group company secretary of Altron with effect from 1 March 2017. Mr Groenewald has fulfilled the role of interim group company secretary since November 2016.

Post year-end VCP’s co-founders, Messrs Antony Ball and Samuel Sithole, were appointed to the Altron board as non-executive directors effective 9 March 2017.

GOVERNANCE FRAMEWORKS

To ensure that we consistently practise effective corporate governance throughout the Altron group, our board applies the JSE Listings Requirements and the principles of the King III Code on Corporate Governance. In 2017 we will commence the implementation of the principles of King IV (which was launched in April 2017) in a phased approach. In 2018 we will undertake a gap analysis to establish what shortcomings, if any, exist in relation to our implementation of King IV, which the group will be required to implement in its 2019 financial year.

Internally the board’s responsibilities and duties are outlined in the board charter, which the board reviews and adopts annually. There were no changes to the board charter this year and no substantial changes are envisaged for 2018; however, the charter and committee mandates will be reviewed in line with King IV, as appropriate. The Altron Board Charter and sub-committee mandates and terms of reference are available on the Altron website.

A broader framework of internal policies and controls, including a compliance framework, code of ethics, as well as policies and protocols to govern processes and operations, manages our economic, environmental and social performance, and provides for effective risk assessment. This governance framework, which is reviewed annually, is applicable to all of the group’s subsidiaries, in addition to those policies and procedures that are specific to certain subsidiaries.

During the year we embarked on a review of the group’s reporting framework in the context of governance, risk, compliance and sustainability (GRCS) in order to assess reporting challenges experienced within the group. This task team will help to build a defined approach for Altron to review its GRCS obligations and to help the group companies implement it in an integrated manner in the year ahead.

REMUNERATION

In 2017 we updated our remuneration practices and policies based on engagement with stakeholders and the board adopted a group remuneration policy. This new policy more closely incentivises performance, bringing executive salaries in alignment with shareholders’ interests. Full details are included in the group’s remuneration report, available online.

BOARD EVALUATIONS

During 2017 we began preparing for board and sub-committee self-evaluations. Given the ongoing restructuring of Altron, this exercise will receive further attention during the course of the year ahead.

KEY FOCUS AREAS OF THE BOARD IN 2017

  • Amendments to the memorandum of incorporation in line with the change in the control structure of the group towards the end of the 2017 financial year
  • Continuous assessment of remuneration practices and policies, including an adoption of an updated Altron Group Remuneration Policy
  • Altron Board Gender Diversity Policy prepared for adoption during May 2017

LOOKING AHEAD

Going into 2018 our priority is to continue growing and to expand on the collective ICT experience of the board. We will take the appropriate steps in order to ensure that the Altron board is comprised of the appropriate balance of knowledge, skills and experience to contribute to the achievement of the group’s overall strategic vision. A priority in this process will be to seek black female management talent, in order to address our transformational targets (see here for further detail).

We also plan to resize the Altron board in line with appropriate corporate governance requirements. This will be attended to as an ongoing process throughout the 2018 financial year.