The Board practises sound corporate governance embedded in the compliance-based culture, leading to the Group's long-term sustainability. Governance is proactively managed through the nature of the internal controls of accountability between the shareholders, Board and management.
Group governance frameworkThe DoA sets out the governance model and structures that support the Group's governance framework. The Board reviewed and approved this framework in 2019 and focused on subsidiary governance and applying proportional governance. The Board further reviewed certain portions of the framework in 2021 to enhance corporate governance elements.
The Directors confirm that Telkom complies with the:
The framework is continually embedded in the Group and its subsidiaries to ensure alignment, standardisation and consistent application of sound governance principles.
The provisions and guidelines set out in the framework assist the Group to mitigate against known governance breaches and possible reoccurrences. These are underpinned by:
The framework's content is subject to the statutory and regulatory environment that the Group operates in. This includes the JSE Listings Requirements, the Companies Act, the MOI and King IV. For the King IV application report, refer to www.telkom.co.za/ir/Governance/Governance.shtml.
Delegation of authority
The Board understands and accepts its responsibility as the custodian of corporate governance in the Group. The governance structures provide for the delegation of the Board's authority, while maintaining effective monitoring and oversight. The Board, through the DoA, ensures effective coverage and legitimacy while delivering good performance.
The DoA is aligned to the JSE Listings Requirements, Companies Act and the MOI. The Board reviewed the DoA in FY2021. Its focus is on embedding its principles in the subsidiaries and measuring its effectiveness in decision-making activities within the approved risk framework. We simplified the DoA to provide an enabling environment for agile decision-making and delivering shared value to all stakeholders. We aligned the subsidiary DoAs with the principles of the Group DoA. The subsidiary Boards adopted and implemented the DoA. Implementing the FY2021 DoA created an agile business with quicker decision-making processes and efficiencies that support the delivery of the Group's strategic objectives.
The Board's Committees assist the Board in discharging its duties and responsibilities. We amended each Committee's terms of reference to align with the JSE Debt Listings Requirements and identified the required King IV enhancements. The Board approved these amendments to the Committee terms of references and the Board Charter in FY2022, which emanated from the prior year's King IV implementation plan. The amendments included, among others, a materiality threshold for personal financial interests or otherwise for Directors, inclusion of fit and proper tests in the nomination of Directors, and the application of ESG frameworks adopted by the Board.
To measure the effectiveness of our King IV applications, the Telkom Group Internal Audit team conducted a governance and ethics audit flowing from the proposed King IV enhancements and the implementation plan in embedding these principles into the normal ways of work. The team issued a clean audit report.
The 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 feeds into the Board and its Committees.
The Board is satisfied that the provisions and parameters set out in the DoA support a balance of power, authority, and sufficient role clarity, while promoting an agile and evolving business environment.