INTEGRATED REPORT 2019

Induction and ongoing Board development

Newly appointed directors undergo induction to enable them to make the maximum contribution within the shortest time possible. The induction includes visits to airports to familiarize directors with the business environment and operations. The directors are accountable and responsible for all actions of Board committees. Other ongoing training and education courses allow directors to familiarize themselves with their fiduciary duties and responsibilities. The ongoing development programme is considered by the Remuneration and Nominations Committee.

Board evaluation

The performance and effectiveness of the Board was assessed by way of an internal self-assessment, which was facilitated by the Company Secretary. The assessment covered the Board as a whole, individual directors, the Board Chairman and Board committees. A formal, externally facilitated independent review will be conducted in FY2020/21 per the King IV Report recommended practice that the evaluation should be conducted every two years. Every alternate year, the Board will schedule in its yearly work plan an opportunity for consideration, reflection and discussion of its performance and performance of the Board Chairman.

Scoring system

3.5 - 4

2.5 - 3.4

2.4 - 2

1-1.9

The lead independent director provided the Board Chairman with his appraisal feedback. The Board Chairman has received a rating of 3.5 for his leadership, an indication that the Board Chairman’s leadership style is good.

The functioning of the Board committees has been rated as good.

The individual Board members have been provided with the outcome of the peer review and there are no material issues which have been raised.

The areas assessed in the Board evaluation were as follows:

Board Composition
Board Responsibilities
Board Meetings
Committees of the Board
Stakeholder Relationships
Relationships with management

The Board received an overall score of 3.2 out of 4.0 by its Board members, which is a satisfactory rating. This indicates that the Board believes that it is effective in the discharge of its corporate governance responsibilities, given that most Board members were appointed after the commencement of FY2018/19. There were no material concerns in respect of the assessed areas.

The areas which have been identified as confronting the Board now and in the immediate future have been summarised as follows:9

Leadership and stability at executive management level The Board commenced the CEO recruitment process in October 2018 and a recommendation was submitted to the Minister in December 2018. There have been delays in the approval of the appointment by Cabinet due to the change of ministers. The Board’s recommendation is under consideration by Cabinet. The recruitment for the CFO position has commenced.
Anonymous complaints and legacy issues The Board has built capacity within its governance processes and structures to deal with these matters, whilst acknowledging that the Board will not be stalled in doing its work by anonymous complaints.
Review of DLA The Delegation of Authority Policy and Framework have been reviewed. The Board acknowledges that the DLA is a live document which needs constant review to align to the needs of the Company.
Sustainability of Airports Company South Africa Matters pertaining to the sustainability of Airports Company South Africa will be discussed at the upcoming Board strategy session.
Supply chain management and irregular expenditure Focus will be spent by the Audit and Risk Committee, and Remuneration and Nominations Committee in addressing challenges which have been identified in our supply chain management. The reduction in the current year’s irregular expenditure is a demonstration of the Board’s focus in addressing irregular expenditure. There will be more focus on consequence management.

The areas which have been rated as requiring improvement pertain to the composition of the Board with regard to rotation, succession planning at Board level, and succession management at management level. The former two are beyond the control of the Board as the Board is not involved in the nomination of non-executive directors. This will be addressed with the Minister of Transport in the light of the New Debt Listing Requirements proposed by the JSE for applicant debt issuers to have a nominations policy for the appointment of non-executive directors. The Succession Management Policy and Plan for management is under consideration by the Remuneration and Nominations Committee.

Conflicts of interest

The conflicts of interest policy is in place to manage any potential conflicts of interest. Directors sign annual declarations of interest disclosing their interests and interests in any direct or indirect personal or private interests that their spouses, partner or close family member may have in any matter related to the business of the Company. Directors would have to excuse themselves from deliberations on these matters. There were no such cases for the year under review.

Independent professional advice and access to information

The Board, its committees as well as any directors are entitled to seek independent professional advice concerning the discharge of their duties as directors and to gain access to information they may require in discharging their duties as directors. The Board has approved protocols to guide the directors in these instances.

Role and responsibilities of the Board

The Board is responsible for:

  • approving the Group’s strategy;
  • acting as a focal point for, and custodian of corporate governance;
  • providing effective leadership on an ethical foundation;
  • ensuring the Group is a responsible corporate citizen;
  • the governance of risk, including risks associated with information and communication technology;
  • ensuring the Group complies with the applicable laws and considers adherence to non-binding rules and standards;
  • monitoring performance; and
  • ensuring succession planning for executive director positions is in place.

Due to the appointment of Board members after the commencement of the financial year, members could not attend all meetings of the Board and Board committees due to prior commitments.

Attendance:

  • Deon Botha
  • 8/10
  • Dudu Hlatshwayo
  • 9/9
  • Dr Matlodi Mabela^
  • 2/2
  • Nosizwe Nokwe-Macamo
  • 4/8
  • Bongani Maseko*
  • 7/7
  • Kate Matlou
  • 10/10
  • Bonang Mohale
  • 5/8
  • Pascalis Mokupo
  • 8/8
  • Roshan Morar <
  • 1/1
  • Adv Sandile Nogxina
  • 3/4
  • Irvin Phenyane
  • 8/8
  • Yershen Pillay
  • 7/8
  • Siyakhula Simelane #
  • 2/2
  • Ntombifuthi Zikalala Mvelase
  • 8/8

*Employment contract expired on 30 November 2018
^Resigned on 19 April 2018
<Retired on 9 April 2018
#Resigned on 20 April 2018

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