The last external evaluation was conducted in FY2022 by the same external independent service provider used in FY2019. This ensured consistency in methodology, continuity and comparison of the findings.
The proposed key future focus areas emanating from the FY2022 evaluation results were, among others:
These are being dealt with through various governance structures.
In FY2023, the internal evaluation was conducted by the Group Company Secretariat function. The gaps identified through the internal evaluation were extensively considered by the Board’s governance structures, and the outcome of the evaluation was tabled at the respective Committees and the Board for consideration.
The recommended corrective actions were tabled to all the governance structures for adoption during the year. All the Committees will enhance their respective annual Committee work plans for FY2024 to address any identified areas of improvement. The identified shortcomings related to, among others, the following:
The Board and its Committees are satisfied that the annual evaluation outcome rating indicates their overall performance is still satisfactory. The Board remains committed to improving regarding any challenges that may arise.
The Group Company Secretariat actively manages the conflicts of interest process at the start of each financial year. This includes a process wherein all Directors and Group Prescribed Officers update mandatory annual declarations on our electronic platform. These annual declarations are tabled to the Group Exco or Board for noting purposes.
The declaration of interest process also extends to other employees beyond the Executive Management level and suppliers to enhance ethical practices. Suppliers must comply with the Supplier Code of Conduct as they come on board.
Telkom remains committed to promoting and embedding transparency and accountability. The ethics and governance prescripts define the conditions and process for declarations of interests. Telkom encourages continuous declarations of conflicts of interest for Executive Directors, Non-executive Directors, Group Prescribed Officers and Prescribed Executives and Executive Management should the circumstances change during the year.
change during the year. The respective business unit and subsidiaries have adopted the Group’s governance prescripts. There were various potential conflicts of interest recorded in FY2023. The conflict of interests register for the Board is available online and the Group Ethics Handbook.
The AGM was convened virtually on 24 August 2022. In preparation for the AGM, we convened a Chairperson’s Governance Roadshow to engage with our institutional investors in August 2022, post the publication of our integrated report. We addressed and closed all matters raised in the 2022 Governance Roadshow.
Most of the proposed ordinary resolutions received favourable votes at the AGM. However, all special resolutions failed, and Telkom published a SENS with the voting results on 24 August 2022. Refer online.
To remedy the unapproved special resolutions, the Company issued a SENS announcement on 8 November 2022, and a Notice of a General Meeting scheduled for 9 December 2022.
Unfortunately, the Company cancelled the meeting due to the resignation of the Board Chairperson and other administrative issues. The cancellation was effected through a SENS announcement published on 02 December 2022.
Due to the fact that more than 25% of the voting rights exercised were unfavourable towards the remuneration implementation report, and as per our policy and strong commitment to good corporate governance, we issued a follow-up SENS announcement providing dissenting shareholders an opportunity to engage on 01 March 2023. We are pleased that this invitation was accepted by some of our shareholders who included Oystercatcher Investments, Differential and Excelsia Capital. We used the above engagement session to listen to the main concerns, which supplemented information we had also gathered from an analysis of the voting trends and from the FY2022 ISS proxy voting recommendation report for Telkom.
The concerns raised centred around a perceived lack of transparency with regards to the performance metrics used for our variable pay (STI and LTI) schemes, including metrics associated with executing value unlock. There were also concerns around the need to include measurable ESG targets to drive Executive accountability for the sustainable achievement of our strategy. These matters are elaborated upon in our remuneration report.
Telkom will table the special resolutions again at the upcoming 2023 AGM.
Refer to the Chairperson’s report. Also refer to the summary remuneration report, and the full standalone remuneration report online, for more information regarding the voting outcome on remuneration-related resolutions.
The Board remains satisfied with the adequacy and effectiveness of the performance of the Group Company Secretary in assisting the Board to discharge its duties. We believe she is competently qualified for the role.
Ayanda Ceba remained the Group Company Secretary for the period under review. Her role includes regularly engaging and supporting the Board and its Committees. She advises on their fiduciary duties, JSE Listings Requirements, disclosure obligations, good governance practices, and ethical conduct. There are arrangements in place for accessing external professional corporate governance advisors where needed. The Board is satisfied that these are adequate and effective through the office of the Group Company Secretary.
The Group Company Secretary continued to maintain an arm’s-length relationship with the Directors and to oversee governance in all subsidiaries aligned to the Group governance framework.
The Nominations Committee, on behalf of the Board, evaluated the Group Company Secretary for FY2023. The evaluation covered the individual performance of the Group Company Secretary and the effectiveness of the Group Company Secretariat function. The results indicated that the Board is pleased and satisfied with the performance of the Group Company Secretary and the Group Company Secretariat function.
Subsequent to the financial year end, the Group Company Secretary, Ayanda Ceba resigned as per SENS published on 31 May 2023 to pursue a career outside Telkom. The Board has embarked on succession activities to fill the vacancy that will be created from 01 September 2023.
The Board wishes to thank Ayanda for her service during her tenure, and wishes her well for the future.