Board committees

The Board has established six committees to assist and support the Board in discharging its duties. The committees established by the Board play an important role in enhancing standards of governance and effectiveness within the Group. Each committee acts in terms of its written terms of reference and the terms of reference were reviewed and approved during the year. The Information and Communication Technology Governance Committee is a new committee which has been established pursuant to a need that has been identified to have such a committee in place. The Board committees report back on their activities to the Board at all meetings. The committees and the Board are satisfied that the committees have executed their duties during the year under review in accordance with their terms of reference.

A summary of the Board committees’ composition and responsibilities is provided below. The full reports from the Audit and Risk Committee, and Remuneration and Nominations Committee are provided here.

Apart from regular agenda items, such as report-backs from each Board committee and comprehensive reports from the CEO and CFO, key areas of focus during the reporting period included the following challenges, developments, outcomes and continuing focus areas:

Area of focus	What the Board did
Constitution of Board committees	Subsequent to the resignation of some Board members in April 2018, the number of Board members in office was inadequate to constitute Board committees. The Board appointed Board committees at the special Board meeting of 7 September 2018 immediately after the appointment of new Board members.
Group strategy	The Board has: Monitored the implementation of its strategy Provided constructive challenge to management Monitored progress made with regard to agreed strategic initiatives
CEO recruitment	Bongani Maseko’s extended contract of employment as the CEO expired on 30 November 2018. The Board commenced with the CEO recruitment process in October 2018. The Board has finalised the recruitment process with the assistance of the Remuneration and Nominations Committee and has submitted its recommendation to the Minister. Ms Bongiwe Mbomvu has been appointed as the Acting CEO while the recruitment process for a CEO is under way.
Strategy review of the Group	The Board had its strategy review session in November 2018.
Finalisation of the matters raised in the forensic reports as a result of media allegations	The Board appointed an ad hoc committee to assist the Board in finalising the matters pertaining to the allegations against the CEO.
Approval of policies	The Board has approved various policies pertaining to employee relations, compliance and incentives
Compliance, risk, ethics and corporate governance	The Board has: Received compliance reports through the Audit and Risk Committee in order to confirm that the Group complies with relevant legislation and regulatory requirements Noted the report from the SEC on the results of the Ethics Risk Assessment within the Group Received reports on material matters (threats and opportunities) Held a risk assessment session Considered the gap analysis on King IV Report principles and recommended practices Approved the criteria for assessing independence Approved the reviewed Subsidiary Governance Framework and Governance and Assurance Framework Approved the recommendation for winding-up of Precinct 2A Investments SOC Ltd Appointed non-executive directors to subsidiaries
Effectiveness	The Board has: Considered the criteria for the FY2018/19 Board evaluation Appointed a lead independent director Considered the skills matrix of the individual Board members and Board as a whole
Value creation	The Board has: Approved the Western Precinct Development, ORTIA Terminal A Refurbishment, Terminal 2 CTIA Capex for Enablement work Noted the business and implementation plans for the Airports Company South Africa Training Academy
Leadership	The Board has considered regular updates and recommendations by the various committees
Remuneration	The Board has approved the reviewed remuneration policy
Relations with stakeholders	In order to ensure satisfactory dialogue with stakeholders, and to foster strong and open relationships, the Board discussed transformation related matters with the Black Management Forum (BMF).
Corporate citizenship	The Board has noted reports from the Social and Ethics Committee on the various elements of good corporate citizenship including: The promotion of equality, the prevention of unfair discrimination and the reduction of corruption Sponsorships, donations and charitable giving Environmental, health and public safety, including the impact of the group’s activities and of its products and services Stakeholder relationships The Group’s standing in terms of the International Labour Organisation Protocol on decent work and working conditions, and employment relationships The Group’s contribution towards the educational development of its employees
Financial results, liquidity, solvency and viability statement	The Board: Considered, reviewed and approved the financial results for the year ended 31 March 2018 Assessed, confirmed and satisfied itself of the Group’s going concern statement. Confirmed that the Group was liquid and that the solvency and liquidity test has been satisfied
Board charter and terms of reference	The Board has approved the reviewed Board charter and terms of reference of its various committees.>
Board charter and terms of reference	The Board has approved the reviewed Board charter and terms of reference of its various committees.

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AUDIT AND RISK COMMITTEE

Committee chair: Pascalis Mokupo

Description of the committee:

The Audit and Risk Committee is an essential part of the Group’s governance framework to which the Board has delegated the following key functions:

• Oversight of the Group’s financial reporting process and risks;
• Managing the relationship with the group’s external auditor; and
• Reviewing the group’s internal controls and assurance processes, including those of Internal Audit.

Composition and meeting attendance:

The Audit and Risk Committee is composed by a majority of independent non-executive directors who meet predetermined skills, competency and experience requirements.

The CEO, CFO, COO, External Auditor, Group Executive: Governance and Assurance and CAE attend all committee meetings.

Subsequent to the resignation of some directors from the Board, the number of non-executive directors remaining was insufficient to constitute the committee. The committee was constituted on 7 September 2018 subsequent to the appointment of new Board members.

The committee has conducted an evaluation of the finance function and former acting CFO. The committee is satisfied that the experience, expertise and resources of the finance function, and the experience and expertise of the former acting CFO are satisfactory.

Meeting schedule and attendance:

During the year under review, the Audit and Risk Committee met five times and two of the meetings were special meetings convened to discuss the committee’s approach in dealing with forensic reports pertaining to the allegations of wrongdoing against the former CEO, anonymous emails and the draft 2020-2022 Corporate Plan.

Activities and focus areas:

The committee:

• Oversight of the Group’s financial reporting process and risks;
• Managing the relationship with the group’s external auditor; and
• Reviewing the group’s internal controls and assurance processes, including those of Internal Audit.
• Considered strategic risks and their impact on achieving the Group’s strategy and assessed the adequacy of controls and the combined assurance delivered over the identified risks.
• Monitored the effectiveness of the control environment through the review of reports from internal audit, management and the external auditor, and ensured the quality of financial report through the review of the financial statements submitted to the committee meetings.
• Noted the irregular expenditure incurred in the past and that it was due to control weaknesses in supply chain management (SCM) and poor contract management. Considerable efforts have been expended in improving SCM processes. Root causes were addressed and adequate control measures were put in place to prevent recurrence.
• Considered the approach to be adopted in dealing with forensic reports commissioned by the previous Board.
• Reviewed in detail the main judgements and assumptions made by management, relevant sensitivity analysis performed, and conclusions drawn from the available financial reporting information and evidence.
• Where appropriate, the committee sought input and views from the external auditor and encouraged rigorous challenge on control, accounting and disclosure matters. The committee also covered matters related to budgeting, forecasting, funding, taxation and legal matters.
• Reviewed the judgements exercised on tax provisions.
• Considered management’s assessment of the Group’s tax exposures and the appropriateness of provisions recognised.
• Assessed the liquidity of the Group using the latest forecast projection of future cash flows and planned capital project expenditure.

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BOARD INVESTMENT COMMITTEE

Committee chair: Dudu Hlatshwayo

Description of the committee:

The committee assists the Board in discharging its duties relating to capital projects, commercial activities, regulated and unregulated investments, procurement, supply chain management and treasury activities, including funding and borrowing.

The Board Investment Committee is an essential part of the Group’s governance framework to which the Board has delegated the following key functions:

• Oversight of the Group’s investment, commercial and treasury activities;
• Oversight of the Group’s procurement; and
• Oversight on major capital projects.

Composition and meeting attendance:

The committee consists of non-executive directors, the majority of whom are independent, and the CEO. The CFO, COO, Group Executive: Infrastructure Asset Management, Group Executive: Technical Services and Solutions and Group Executive: Business Development are permanent invitees to committee meetings. Meeting schedule and attendance: During the year under review, the committee met three times.

Activities and focus areas:

The committee:

• Considered the offer made to the Group for the purchase of its shares in MIAL and recommended to the Board that the shares be sold.
• Recommended to the Board the proposal for the winding-up of Precinct 2A Investments SOC Ltd, a subsidiary of the Group.
• Received commercialisation reports and advised management on the approach for handling the litigation matters on transformation.
• Considered the performance of major investments.
• Noted the business development activities undertaken by management.
• Considered borrowings made by the Group to ensure the borrowing covenants have not been breached.
• Considered reports on capital projects and made proposals on the format of the reports.
• Recommended approval of the Terminal A Refurbishment Phase 1 – ORTIA, Terminal 2 CTIA (Capex for enablement work).
• Considered the Economic Regulation Quarterly Reports and the impact of the Regulating Committee’s decision on the Group’s expenditure programme.
• Considered reports on supply chain management activities and the reasons for the historical irregular expenditure.

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BOARD ECONOMIC REGULATION COMMITTEE

Committee chair: Advocate Sandile Nogxina

Description of the committee:

The Board Economic Regulation Committee is an essential part of the Group’s governance framework to which the Board has delegated the oversight for the development and implementation of the economic regulatory strategy and ensures compliance with all economic regulatory legislation and/or requirements.
At the core of its function is the deliberation of the approach leading to the permission application for submission to the Regulating Committee, which determines airport tariffs for the Group.
Composition and meeting attendance:
The committee comprises non-executive directors, the majority of whom are independent and are chairmen of the Board committees.
The CFO and COO are permanent invitees to committee meetings. Meeting schedule and attendance: During the year under review, the committee held one meeting.
Activities and focus areas: The meeting focused on the impact of the final permission decision and progress made with the execution against the Economic Regulatory Strategy.

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REMUNERATION AND NOMINATIONS COMMITTEE

Committee chair: Deon Botha^*

(^*Was committee chair until his appointment as the acting Board Chairman on 13 April 2018)

Committee chair: Kate Matlou^**

(^**Appointed as committee chair on 7 September 2018, her term expired on 30 July 2019)

Description of the committee:

The committee assists the Board on matters of strategic remuneration by ensuring decisions are aligned to the Group’s strategic objectives.

Composition and meeting attendance: The committee comprises non-executive directors, the majority of whom are independent.

The CEO, CFO, COO and Group Executive: Human Resources are permanent invitees to committee meetings.

Activities and focus areas: The committee held six meetings during the year, three of which were special meetings convened to consider, among other matters, the recruitment process for a new CEO, the appointment of an Acting CEO and the establishment of an ad hoc committee to assist the Board in finalising the allegations of wrongdoing made against the former CEO.

The committee:

• Recommended to the Board executive and employee remuneration and awards-related policies.
• Recommended to the Board long-term incentives for the executives and airport managers.
• Recommended to the Board the composition of Board committees.
• Recommended to the Board the appointment of non-executive directors to serve on the Boards subsidiaries.
• Recommended to the Board a lead independent director.
• Considered the contract of the former CEO, Mr Bongani Maseko, and assisted the Board in the ecruitment process for a new CEO.
• Recommended candidates to the Board to act in the CEO position while the recruitment process for a CEO was under way.
• Considered the succession planning for executive management.
• Considered and confirmed the training programme for directors for the 2019 calendar year.
• Considered the criteria and approach for the evaluation of the effectiveness of the Board and its committees.
• Monitored the performance of the Group in the area of human resources against internal targets and legislative imperatives.
• Considered the Group’s performance management approach and employee eligibility for performance bonus payments, and advised management on best practice approach and philosophy to performance management.
• Noted the business plan and implementation plan for the commercialisation of the Training Academy.
• Recommended to the Board employee relations policies.

SEC

SOCIAL AND ETHICS COMMITTEE

Committee chair: Bonang Mohale

Appointed on 7 September 2018

Resigned with effect from 1 July 2019

Description of the committee:

The committee monitors the Group’s activities related to relevant legislation, other legal requirements or prevailing codes of best practice in transformation, socio-economic development, good corporate citizenship, environment, health and public safety, consumer relationships, labour and employment, ethics and stakeholder engagement.

Composition and meeting attendance:

The Social and Ethics Committee comprises non-executive directors and the CEO, who is an executive director.

The CFO, COO, Group Executive: Governance and Assurance; Group Executive: Corporate Affairs and Group Manager: Transformation are permanent invitees to committee meetings.

Activities and focus areas:

The committee held three meetings during the year under review.

The committee:

• Considered the reach of ethics training and awareness throughout the organisation.
• Noted progress reports on anti-corruption activities.
• Noted the quarterly updates on declarations of interests and gifts in relation to executives and top management.
• Considered the results of the Ethics Risk Assessment which was conducted during the financial year and the Ethics Management Plan which comprised an action plan to address issues identified in the Ethics Risk Assessment.
• Considered the organisation’s performance on B-BBEE and Management’s efforts to improve representation of black youth in senior management and representation of persons with disabilities.
• Noted the status update on projects and expenditure in line with the Group’s SED Strategy, and the noteworthy achievements in some of the key projects.
• Considered the impact of SED projects.
• Considered the quarterly dashboard with statistics on key safety, security, health and environmental incidents at the various airport sites, noting International Civil Aviation Organisation and legislative requirements.
• Noted the mechanisms adopted by management to prevent incidents.
• Noted media coverage in relation to the Group and issues that have had a reputational impact on the Group; and advised Management on ways to balance positive and negative media coverage.
• Noted the utilisation and content of the Group’s social media platforms.
• Monitored the Group’s standing in terms of the International Labour Organisation guidance on decent working conditions.
• Considered the Group’s contribution toward the educational development of its employees.
• Monitored the adequacy and effectiveness of the Group’s engagement and interaction with its stakeholders to ensure Group sustainability.

ICTGC

Information and communication technology governance committee

Committee chair: Yershen Pillay

Description of the committee:

In October 2018 the Board established the committee to oversee IT governance, in accordance with the King IV Report. The terms of reference of the committee were approved on 11 December 2018 and members of the committee were appointed on the same day.

The key mandate of this committee is to oversee that the information and communication technology (“ICT”) policies and practices comply with best practice.

Composition and meeting attendance:

The committee held one meeting which was preceded by a workshop. The purpose of the workshop was to ensure that committee members were fully aware of their responsibilities in terms of the authority delegated to the committee, and to agree on the focus areas for the committee.

The committee comprises of non-executive directors. The CEO, COO, CFO, CIO and CAE are permanent invitees to committee meetings. The Group Executive: Governance and Assurance, Group Manager: Commercial Services and Group Manager: Enterprise Security attend meetings by invitation.

Activities and focus areas:

The committee held three meetings during the year under review.

The committee’s primary function is to ensure:

• implementation of the Group’s overall ICT strategy
• robust information security and protection of intellectual property in ICT systems
• that the ICT innovation strategy and related policies are in place
• opportunities to improve performance and sustainability of the Group through the use of ICT are exploited.

The committee held one meeting during the year under review.

The committee:

• Held a workshop to ensure that the committee members are fully aware of their responsibilities.