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The Board's focus areas |
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The roles and responsibilities of Directors are outlined in the JSE Listings Requirements, the Companies Act and the Board charter. In terms of the common law duty, a Director must exercise his or her powers and perform his or her functions in good faith, for a proper purpose, and in the best interest of the Company. This exercise of power must be with a degree of care, skill and diligence. The Board and its Committees are satisfied that their fiduciary duties and responsibilities, as recorded in their charter and respective terms of references, were duly fulfilled. |
The Board had a combination of scheduled and special meetings. The special meetings were necessitated by a range of urgent matters, like the spectrum auction. Unfortunately, it is extremely difficult to ensure that there is 100% attendance for special meetings.
The Board noted that Government Gazette no. 11385, published on 25 January 2022, gives the Special Investigating Unit (SIU) authority to investigate several matters. The SIU investigation is pending and Telkom is engaging with the SIU as to progress the matter. The Group follows robust corporate governance practices and has done so in executing the Telkom strategy to consolidate its operations in South Africa. The aforementioned matters date back as far as 2006 and most of them have been repeatedly reported on in previous Telkom reports.
The Board approved Telkom's participation in the spectrum auction in March 2022 (refer to the chairperson's report and the group Chief Executive Officer's report). It further engaged on the Spectrum Policy Directive, and the options for consideration.
The Board, in its capacity as shareholder, approved the listing of Swiftnet SOC Ltd on the JSE mainboard. Swiftnet followed a rigorous process to complete the prelisting statement. However, based on global events and market conditions and its impact on capital markets, the Board resolved to postpone the listing. The Board remains committed to its Value Unlock Programme which is further discussed in the Chairperson's report. Refer to chairperson's report.
In preparation for the listing, the Swiftnet Board also considered various governance prescripts to support the entity.
As customer service is central to the operations of the Group, the Board focused on improving service delivery and customer experience:
Refer to chairperson's report.
The Board focused on adverse regulatory matters, unstable market and economic conditions. Refer to the world we operate in on the world we operate in.
The Board also focused on the development of the ESG Strategy and the implementation roadmap that it approved. Refer to our strategy review for the strategy.
The Risk Committee approved the amended risk appetite statement to specifically address the risks related to ESG and creating value for shareholders. Refer to the risk report on enterprise risk management and compliance.
The Board considered Non-executive Director succession planning, and appointed seven Directors, four of which were female. Refer to leadership.
The Board considered the succession of Executive Management and appointed Serame Taukobong as GCEO. Refer to chairperson's report.
The JSE announced amendments to the Debt Listings Requirements with effect from 30 September 2020. The gap analysis performed in March 2021 indicated no material gaps. However, there were various elements that needed enhancement. The Nominations Committee monitored the implementation plan of the non-material matters, and the progress was reported to several governance structures.
Telkom's Debt Officer resigned with effect from 31 March 2022. We appointed Ms Nomhle Mnguni, in her capacity as Executive: Treasury of Telkom, as Acting Debt Officer with effect from 1 April 2022.
We introduced the GCEO and GCFO attestation statement in December 2019. Refer to https://www.telkom.co.za/ir/financial/ financial-results-2022.shtml of the annual financial statements for more details on the Directors' responsibility for financial controls.
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Board Committees and their focus |
The Board delegated some of its activities to its Committees to assist it in discharging its duties. The Board has six Committees, each guided by its respective terms of reference. The Board and its Committees may invite external advisors and any Executive Management to its meetings, should the need arise.
The Chairperson and Members of each Committee are set out on the pages that follow.
We review the Board charter and the Committees' terms of reference annually, or as and when required, for adequacy and effectiveness. We align them to best practice principles in terms of King IV and the JSE Listings Requirements. For the forthcoming financial year, the revised Board charter and the Committees' terms of reference were approved by the Board on 30 March 2022.
The current Board charter and each Committee's terms of reference are available at www.telkom.co.za/ir/Governance/ Governance.shtml.
Audit
Committee
KA RaynerChairperson
Risk
Committee
LL Von ZeunerChairperson
Remuneration
Committee
RG Tomlinson Chairperson
Members:
PCS Luthuli, KW Mzondeki, H Singh, LL Von Zeuner
The Audit Committee is a statutory Board Committee as per provisions of the Companies Act. It is mandated in terms of the DoA and is charged with the independent role of accountability. The Committee has, among others, the responsibilities of internal and financial controls, internal audit, external audit, risk management, combined assurance, financial statements and integrated report, communication with shareholders, King IV compliance, and legal and regulatory matters related to accounting activities. The Committee monitors Telkom's progress in improving its ESG disclosures, as discussed in our strategy review.
The Committee ensured that appropriate financial reporting procedures exist and are effective, according to paragraph 3.84(g) of the JSE Listings Requirements. These included consideration of all entities forming part of the consolidated Group financial statements. The Committee has access to all of Telkom's financial information to promote transparency and allow the Company to effectively prepare and report on the financial statements.
Over and above the standard activities, the Committee considered and/or approved the following key matters, among others:
For more details on the Committee's activities, refer to its report in the annual financial statements on https://www. telkom.co.za/ir/financial/financial-results-2022.shtml. Also refer to the financial capital report on group Chief Financial Officer's report: FY2022 performance.
Members:
EG Matenge-Sebesho*, F Petersen-Cook, KA Rayner, SP Sibisi, H Singh
The Risk Committee assists the Board in ensuring Telkom has an effective risk management process that identifies and monitors the management of the Group's key risks, transversal risks and IT-related cybersecurity risks. The Committee is responsible for overseeing ESG risks linked to the ESG Strategy and its implementation. The Committee also oversees and monitors governance risks through the Group's ERM framework and its system of integral controls. It increased its focus on managing cybersecurity, IT governance and technology and information-related activities.
The Committee considered the following key matters, among others:
Refer to enterprise risk management and compliance for ERM and compliance and intellectual capital for technology and information governance.
* Appointed 1 October 2021.
Members:
O Ighodaro*, MS Moloko, KW Mzondeki, LL Von Zeuner
The Remuneration Committee sets the Group's remuneration policy on behalf of the Board. It oversees remuneration for Executive Directors and Senior Executives. It monitors the execution of the remuneration policy for the Group, including Non-executive Directors and makes recommendations to the Board.
The Committee's focus areas are detailed in the remuneration report. During the year under review, the Committee:
* Appointed 1 October 2021.
Nominations
Committee
MS MolokoChairperson
Investment
and
Transactions
Committee
F Petersen-CookChairperson
Members:
EG Matenge-Sebesho*, F Petersen-Cook and RG Tomlinson
The Nominations Committee is responsible for reviewing and making recommendations to the Board on most governance-related matters, particularly the composition of the Board and Committees. This includes all aspects of diversity. We updated the Committee mandate to include the process conducted to ascertain the fit and proper testing of the Directors to be appointed. The Committee considered the appointment of a Lead Independent Director and will make a decision in the near future.
The Committee works closely with the Remuneration Committee on succession planning for Executive Directors and critical roles. The Committee recommended the appointment of new Board Members and ensured that the said appointments fulfil the fit and proper test as prescribed by the JSE Listings Requirements and the Companies Act.
During the year under review, the Committee:
* Appointed 1 October 2021.
Members:
Ms O Ighodaro, N Kapila, SN Maseko***, KA Rayner,
SP Sibisi, S Taukobong**, RG Tomlinson
The Investment and Transactions Committee deals with any significant investment or transaction relating to the acquisition of another business or legal entity. This includes any equity injection or possible merger or acquisition approved by the Board. It ensures that approved transactions' post-merger integration plans are adequate. It monitors the performance of investments against the original investment criteria and pre-investment assumptions through a formal post-acquisition review.
During the year under review, the Committee considered:
** Appointed 1 January 2022.
*** Resigned 31 December 2021.
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Board and Committee meeting attendance |
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Social and Ethics Committee
Members:
N Kapila, PCS Luthuli, EG Matenge-Sebesho*, SP Sibisi
The Social and Ethics Committee is a statutory Board Committee per the provisions of the Companies Act. Its activities emphasise the environment and social, governance and ethics-related matters.
The Committee considered the following key matters, among others:
* Appointed 1 October 2021.