Corporate governance report

Group governance framework

The Group governance framework (framework) is continually embedded in the Group and its subsidiary Boards to ensure alignment and consistency. The provisions and guidelines set out in the framework assist Telkom to mitigate against known governance occurrences and possible reoccurrences. The implementation of the framework has brought new focus to corporate social responsibility and enhanced responsibility toward the Group’s stakeholders. The Board is also increasing its focus on ESG matters, through the Social and Ethics Committee. The Social and Ethics and the Risk Committees will oversee the development of a sustainability strategy for the Group. Refer to enhancing our ESG disclosures.

The framework’s content is subject to the statutory and regulatory environment within which the Group operates, being the JSE Listings Requirements, the Companies Act, the memorandum of incorporation and King IV. For the King IV application report, refer to www.telkom.co.za/ir/Governance/Governance.shtml.

The King IV governance enhancement areas largely included, among others, embedding an ethical culture, IT governance, ERM and supplier contract management.

The diagram alongside sets out the Group governance model and structures that support the framework.

Delegation of authority

We extensively reviewed the delegation of authority (DOA) in FY2020 and are embedding it throughout the Group. The subsidiary DOAs are aligned with the principles of the Group DOA and have been adopted by the respective subsidiary Boards. The implementation of the DOA has created an agile business with quicker decision-making processes and efficiencies that support the delivery of the strategic objectives. The DOA is aligned to the JSE Listings Requirements, Companies Act and the memorandum of incorporation.

The Board’s Committees assist in the discharge of its duties and responsibilities. Each Committee’s terms of reference were amended to align with the JSE Debt Listings Requirements and identified King IV enhancements. These were approved by the Board in FY2021. The amendments included, among others, a materiality threshold for personal financial interests or otherwise for Directors and the ESG frameworks adopted by the Board.

Group Exco is a management governance structure constituted at the discretion and guidance of the GCEO. It supports him in carrying out Board-delegated operational activities, and it feeds into the Board Committees.

The Board understands and accepts its responsibility as the custodian of corporate governance in Telkom. The governance structures provide for the delegation of the Board’s authority, while enabling it to maintain effective monitoring and oversight. The Board, through the DOA, ensures effective coverage and legitimacy while delivering good performance. The Board is satisfied that the provisions and parameters set out in the DOA support a balance of power and authority and role clarity, while supporting an agile and perpetually evolving business environment.