Ensuring effective control

  • The board is the focal point and custodian of corporate governance within the group. To this end, the board ensures corporate governance and good practice are inherent in the fulfilment of its responsibilities.

    The board charter sets out its roles and responsibilities. The board holds its directors accountable for their integrity, competence, responsibility, fairness and transparency.


Succession planning and performance

The board is satisfied the company is appropriately resourced and its delegation to management contributes to an effective arrangement by which authority and responsibilities are exercised. The board approves the appointment of the CEO and CFO. The remuneration committee is required to consider the performance of the CEO and CFO annually against agreed performance incentive objectives. The audit committee is required to consider the performance of the CFO and the finance function and will report thereon in its report included in the annual financial statements.

Succession plans for the CEO and senior executives are in place and are reviewed annually by the nomination committee.

The board determines and approves, from time to time, the levels of authority for the CEO and the various members of senior management. The audit and risk committees monitor compliance with these predetermined levels of authority. The risk management function supports the audit and risk committees by monitoring and reporting any material non-compliances to the committees. The board meets as often as required, but at least four times annually.

Executive chair, lead independent director and CEO

The board is of the view that appointing an executive chair, Imtiaz Patel, is appropriate for the company under the circumstances because he has valuable group, industry and regulatory intellectual capital to contribute to the future development and progression of the business. Imtiaz will step down as executive chair on conclusion of his contract in September 2020. He will continue serving as the board's non-executive chair, but he will no longer be involved in the group's day-to-day management and will not be entitled to any remuneration contingent on the company's performance.

During FY20, Steve Pacak acted as lead independent director in all matters where an actual or perceived conflict could exist and where it would be inappropriate for the chair to deal with the matter concerned. The board satisfied itself that Steve acted with independence of mind and judgement and there was no interest, position, association or relationship likely to unduly influence or cause bias in decision-making in the company's best interests. The board made this determination as to Steve's independence considering several factors, including Steve's historical relationship with the Naspers group (and his interest in Naspers) and his directorship of MultiChoice South Africa. Bearing these factors in mind, the board determined Steve was best placed to fulfil the role as lead independent director given his significant experience in governance within the environment the group operates in. Jabu Mabuza was appointed as lead independent director with effect from 3 April 2020.

The CEO, Calvo Mawela, is responsible for leading the implementation and execution of the approved strategy, policy and operational planning of the group, and ensuring the group's day-to-day affairs are appropriately supervised and controlled.

Information

Information relevant to a meeting is supplied on a timely basis to the board, ensuring directors can make informed decisions. To ensure directors can competently discharge their duties and effectively carry out their delegated responsibilities as committee members, they have access to information relating to matters associated with the MultiChoice Group, which is governed by an approved policy. The committees have unrestricted access to information that will allow them to act in accordance with its charter, with the process conducted in an orderly manner via the chair of the board.

Conflicts of interest

Potential conflicts are appropriately managed to ensure candidates and existing directors have no conflicting interests between their obligations to the company and their personal interests. All directors are required to declare personal interests on an annual basis. Declaration of directors' interests is a standing agenda point on the board's agenda. Directors who believe there may be a conflict of interest on a matter must advise the company secretary and are recused from the decision-making process. The Companies Act process is applied in this regard. Directors are required to adhere to the group's policy on trading in securities of the company. The trading in securities policy is aligned to the Financial Markets Act and JSE Listings Requirements.

Shareholder communication

The group is committed to ongoing and transparent communication with its shareholders. In all communications with shareholders, the board aims to present a balanced and understandable assessment of the group's position. This is done through adhering to principles of openness, substance-over-form reporting, and striving to address matters of material significance to shareholders.

This integrated annual report is our primary form of communication with shareholders, in accordance with King IV and the JSE Listings Requirements. We also engage with our shareholders during interim and final results presentations, and investor roadshows periodically. Furthermore, the board encourages shareholders' attendance at general meetings, and, where appropriate, will provide full and understandable explanations of the effects of resolutions to be proposed.


Assurance

The board, through the audit committee, oversees the group's assurance services and ensures these functions enable effective control and support the integrity of information. The group follows a combined assurance model, which covers key risks through an appropriate combination of assurance service providers and functions. The assurance model includes line functions that own and manage risks, specialist internal audit, risk management support and compliance functions (for the group and significant businesses), as well as external auditors and other relevant parties, such as regulatory inspectors. This model is linked to key risks and an assessment of the effectiveness of our combined assurance model is reported on to the audit and risk committees. Internal audit reports on the internal control environment are submitted to the audit committee. The company secretary, group general counsel and external counsel guide the board on legal requirements. The audit committee appoints the head of internal audit, who has unrestricted access to and meets periodically with the chair of this committee.

Company secretary

The company secretary is responsible for guiding the board in discharging its regulatory responsibilities. Directors have unlimited access to the advice and services of the company secretary who plays a pivotal role in the company's corporate governance policies and processes. She ensures that, in accordance with the pertinent laws, the proceedings and affairs of the board, the company itself, and where appropriate, shareholders, are properly administered. The company secretary monitors directors' dealings in securities and ensures adherence to closed periods. She attends all board and committee meetings. In accordance with King IV, the performance and independence of the company secretary are evaluated annually.

The nomination committee is responsible for recommending a suitable candidate for appointment as the company secretary, reviews the competence, qualifications and experience of the company secretary annually and reports on whether or not it is satisfied therewith. Donna Dickson, who joined the group as company secretary in April 2019, resigned with effect from 30 September 2019. Subsequent to Donna's resignation, Rochelle Gabriels, MultiChoice South Africa's CFO who previously held the position of company secretary, was appointed as interim company secretary until a permanent candidate was identified and appointed. The board was satisfied with Rochelle's competence, qualifications, experience, independence and suitability. Furthermore, Rochelle was not a director of the company and, after due consideration, the board is satisfied that she had an arm's length relationship with the board. Rochelle Gabriels resigned as company secretary when the board appointed Carmen Miller into the permanent position with effect from 11 June 2020.

Information and technology (I&T) governance

The company's I&T executive oversees I&T management in the group. The board is aware of the importance of I&T in relation to the company's strategy and approves and annually reviews the I&T governance charter and cybersecurity policy. I&T governance is integrated into the operations of the group businesses. Management of each subsidiary or business unit is responsible for ensuring effective processes for I&T governance are in place. The risk committee assists the board with overseeing I&T-related matters and I&T governance is a standing point on the risk committee agenda. I&T objectives are included in the risk committee charter. The risk committee considers the risk register, and reports on I&T from internal audit and risk support.

Compliance with relevant laws and ethical and responsible use of I&T are addressed through the group's code of ethics and conduct, legal compliance and data privacy programmes. Data privacy is a high priority. Assurance providers, including external and internal audit, provide assurance to management, the risk committee and board on the effectiveness of I&T governance, based on detailed controls to manage identified risks and reduce vulnerability. These arrangements for governing and managing I&T enable the risk committee, and ultimately the board, to oversee the group's I&T governance.

Performance and future focus

The group is highly dependent on its I&T systems and processes to effectively and timeously enable and support the implementation of its strategic objectives. During the year, the group undertook a detailed monthly review to identify, evaluate and assess I&T risks monthly in six key I&T areas. The results were presented and discussed at the I&T operational forum (chaired by the chief technology officer) that meets monthly. Based on the review, the group developed mitigation plans to address the material risks highlighted.

Penalties

The MultiChoice Group operates in a highly regulated environment making compliance a critical consideration. The company participates in the regulatory processes affecting its industry through various public forums and debates, providing inputs on formulating standards and strategies for the industry.

During the year, there were no significant or repeated fines from regulatory bodies to companies across the group. Furthermore, there were no environmental inspections by environmental regulators, no accidents, nor were any environment-related fines imposed by any government.