The JSE Listings Requirements, the Companies Act and the Board charter outline the roles and responsibilities of Directors. 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 Company’s best interest. This exercise of power must be done 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 reference, were duly fulfilled.
The Board had a combination of scheduled and special meetings. The special meetings were necessitated by a range of urgent matters, e.g. SIU investigation potential transactions activities and succession planning activities. Unfortunately, due to the unplanned nature of these meetings, 100% attendance was not always possible.
The Company continued its engagement with the Special Investigating Unit (SIU) as per the provisions of Government Gazette No. 11385, published on 25 January 2022, giving the SIU authority to investigate several matters. The SIU Investigations team received significant documentation. These matters date back as far as 2006 and Telkom reported on them in its previous integrated reports. The matter was in court on 24 and 25 November 2022, and judgment is still pending. The Company will provide further updates in due course as they become available. The Group follows robust corporate governance practices and has executed the Telkom Strategy to consolidate its operations in South Africa.
The MOI states that the Directors may appoint any number of Board Committees and delegate to such Committees any authority of the Board. As already indicated before, the iBoard was established as a governance structure on 18 August 2022. The iBoard comprises independent Members of the Board to deal with all transactions that are or could potentially be subject to the Takeover Regulation Panel. The iBoard is an ad hoc structure that convenes as and when required. It considered the proposed MTN, Rain and Axian Telecom and Afrifund transactions in FY2023.
The Members of the Board were Sello Moloko as the Chairperson, Olufunke Ighodaro, Brian Kennedy, Sibusiso Luthuli, Keith Rayner and Louis Von Zeuner. Mvuleni Geoffrey Qhena assumed the role of Chairperson of the iBoard with effect from 01 April 2023.
The iBoard Members were not compensated for the services they rendered to this governance structure, and a fee introduction will be proposed at the next AGM.
| Regulatory matters | The Board approved the legal separation of Openserve, financial assistance as per the provisions of Section 44 of the Companies Act, and salient terms of the sale of business agreement. Refer to Chairperson's report: How our leadership supports value creation. It further considered MTN’s non-binding offer to allow further engagement and explore whether a suitable transaction could be agreed upon. This transaction fell through and the relevant cautionary announcements were issued. |
| Customer centricity | As customer service is central to the operations of the Group, the Board focused on improving service delivery and customer experience to:
Refer to Chairperson's report: How our leadership supports value creation. |
| Risk matters | The Board focused on adverse regulatory matters and unstable market and economic conditions. Refer to the world we operate in. The Board also focused on the ESG Strategy and its approved implementation roadmap. 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 enterprise risk management and compliance report. |
| Succession planning | The Board considered Non-executive Director succession planning and appointed seven Directors, including three women. Refer to Leveraging Board diversity. The Board considered the succession of Executive Management and supported the Group CEO’s reconfiguration model for the Group. Refer to Effective governance processes. |
In addition, the Group continues to progress in its ESG journey. Refer to Our approach to environmental, social and governance (ESG) disclosures for an overview of the reporting approach, see for the ESG Strategy and TCFD-aligned disclosures.
Telkom’s Debt Officer resigned with effect from 31 March 2022, and the Executive: Treasury, was designated as the Acting Debt Officer, effective 01 April 2022. A new Group Treasurer was appointed, effective 01 September 2022, and he was designated as the Company’s Debt Officer with effect from 15 September 2022.
The Group CEO and Group CFO attestation statement was initially implemented in December 2019, and this has been embedded within the Group’s processes. Refer online for more details on the Directors’ responsibility for financial controls.
We continue to enhance this process to ensure benefits for the Group and its internal control environment.
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. In terms of the approved charter and 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 FY2024, the Board approved the revised Board charter and the Committees’ terms of reference on 31 March 2023.
The Board charter and each Committee’s terms of reference are available online.
Due to the criticality of following King IV recommended practices, the Board, the Nominations and Audit Committees invested resources in the topic. There were various submissions to all these governance structures to give an update on developments in relation to enhancing the implementation these practices. The updates are available online.
Members: N Ford-Hoon***, PCS Luthuli, KW Mzondeki*, KP Lebina**, H Singh, LL Von Zeuner
The Audit Committee is a statutory Board Committee per the Companies Act’s provisions. 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 on our approach to environmental, social and governance (ESG) disclosures.
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 Telkom’s financial information to promote transparency and allow the Group to prepare and report on the financial statements effectively.
Over and above the standard activities, the Committee considered and/or approved the following key matters:
King IV implementation plan status update for FY2023
The Committee is satisfied that it has fulfilled its duties in terms of its mandate. For more details on the Committee’s activities, refer to its report in the annual financial statements online. Also refer to the financial capital report.
| * | Resigned 24 August 2022. |
| ** | Appointed 25 August 2022. |
| *** | Appointed 01 December 2022. |
Members: O Ighodaro, KP Lebina**, N Kapila*, B Kennedy**, KA Rayner, SP Sibisi*, S Taukobong, RG Tomlinson*, S Yoon**
The Investment and Transactions Committee deals with any significant investment or transaction related to acquiring 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.
In FY2023, the Committee considered:
The Committee is satisfied that it has fulfilled its duties in terms of its mandate.
| * | Resigned 24 August 2022. |
| ** | Appointed 25 August 2022. |
Members: EG Matenge-Sebesho, M Nyati**, F Petersen-Cook*, IO Selele**, 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 Directors to be appointed. The Committee considered the appointment of a lead independent Director and will still decide on the best way forward. Although, a provision was made in the Board charter for the appointment of a lead independent Director should circumstances warrant such an appointment, the Chairperson is independent and there is currently no need for the appointment.
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 they fulfilled the fit and proper test as prescribed by the JSE Listings Requirements and the Companies Act.
In FY2023, the Committee:
Reviewed the King IV compliance status
The Committee is satisfied that it has fulfilled its duties in terms of its mandate
Geoff Qhena became the Chairperson of the Nominations Committee with effect from 01 April 2023.
| * | Resigned 24 August 2022. |
| ** | Appointed 25 August 2022. |
| *** | Resigned 31 March 2023. |
Members: O Ighodaro, MS Moloko***, KW Mzondeki*, M Nyati**, 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 on remuneration concerns of the remuneration report online. In FY2023, the Committee considered the following matters:
The Committee recommended the proposed FY2023 remuneration review for:
The Committee is satisfied that it has fulfilled its duties in terms of its mandate.
Geoff Qhena became a Member of the Remuneration Committee with effect from 01 April 2023.
| * | Resigned 24 August 2022. |
| ** | Appointed 25 August 2022. |
| *** | Resigned 31 March 2023. |
Members: N Ford-Hoon***, EG Matenge-Sebesho, F Petersen-Cook*, KA Rayner, SP Sibisi, H Singh, S Yoon**
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, transversal, and ITrelated cybersecurity risks. The Committee oversees ESG risks linked to the ESG Strategy and its implementation. It also oversees and monitors governance risks through the Group’s ERM framework and its system of integral controls. It continues to focus on managing cybersecurity, IT governance and technology and information-related activities.
The Committee considered the following key matters, among others:
The Committee plans to increase its focus on technology and information systems risks to ensure that these are adequately identified, monitored and mitigated to enable business to achieve its strategic goals.
The Committee is satisfied that it has fulfilled its duties in terms of its mandate. Refer to Enterprise risk management and compliance for ERM and compliance and Intellectual capital for IT governance.
| * | Resigned 24 August 2022. |
| ** | Appointed 25 August 2022. |
| *** | Appointed 01 December 2022. |
Members: N Kapila*, PCS Luthuli*, B Kennedy**, IO Selele**, SP Sibisi
The Social and Ethics Committee is a statutory Board Committee per the provisions of the Companies Act. Its activities emphasise environment and social, governance and ethics-related matters. Refer to the Committee’s detailed report on Social and ethics committee report
The Committee considered the following key matters, among others:
Future focus areas for the Committee will be ESG-related matters and implementing the ESG Strategy for the Group.
The Committee is satisfied that it has fulfilled its duties in terms of its mandate.
| * | Resigned 24 August 2022. |
| ** | Appointed 25 August 2022. |
| Director | Board | iBoard | Audit Committee |
Remuneration Committee |
Nominations Committee |
Investment and Transactions Committee |
Social and Ethics Committee |
Risk Committee |
Joint Audit and Social and Ethics Committees |
Joint Audit and Investment and Transactions Committees |
| Independent Non-executive Directors | ||||||||||
| MS Moloko | 13/13 | 7/7 | – | 4/4 | 5/5 | – | – | – | – | – |
|---|---|---|---|---|---|---|---|---|---|---|
| N Ford-Hoon2 | 6/6 | – | 1/1 | – | – | – | – | 0/11 | – | 1/1 |
| O Ighodaro | 12/131 | 7/7 | – | 4/4 | – | 6/6 | – | 1/1 | 1/1 | |
| N Kapila4 | 6/6 | – | – | – | – | 4/4 | 2/2 | – | – | NA |
| B Kennedy5 | 9/9 | 5/7 | – | 3/3 | – | 3/3 | 2/3 1 | – | – | 1/1 |
| KP Lebina5 | 9/9 | – | 3/3 | – | – | 2/2 | – | – | – | 1/1 |
| PCS Luthuli6 | 13/13 | 7/7 | 6/6 | – | – | 3/3 | 3/3 | – | 1/1 | 1/1 |
| EG Matenge-Sebesho | 13/13 | – | – | – | 5/5 | – | 4/51 | 2/41 | 1/1 | – |
| KW Mzondeki4 | 6/6 | 1/7 | 4/4 | 2/2 | – | – | 2/2 | – | 1/1 | NA |
| M Nyati5 | 9/9 | – | – | 3/3 | 4/4 | – | – | – | – | – |
| F Petersen-Cook4 | 3/61 | – | – | – | 1/1 | 4/4 | – | 2/2 | – | NA |
| KA Rayner | 13/13 | 7/7 | 6/6 | – | – | 6/6 | – | 4/4 | 1/1 | 1/1 |
| IO Selele5 | 9/9 | – | – | – | 4/4 | – | 3/3 | – | – | – |
| SP Sibisi4 | 13/13 | – | – | – | – | 3/3 | 5/5 | 4/4 | 1/1 | – |
| H Singh | 13/13 | – | 6/6 | – | – | – | – | 4/4 | 1/1 | 1/1 |
| RG Tomlinson4 | 6/6 | – | – | 2/2 | 1/1 | 4/4 | – | – | – | NA |
| S Yoon3 | 13/13 | – | – | – | – | 3/3 | – | 3/3 | – | 1/1 |
| LL Von Zeuner | 13/13 | 7/7 | 5/61 | 3/41 | – | – | – | 4/4 | 0/11 | 1/1 |
| Executive Directors | ||||||||||
| DJ Reyneke | 13/13 | – | 6/6 | 4/4 | – | 6/6 | 4/51 | 4/4 | 1/1 | 1/1 |
| S Taukobong | 13/13 | – | 6/6 | 4/4 | 5/5 | 6/6 | 5/5 | 4/4 | 1/1 | 1/1 |
The Board, Nominations Committee and Investment and Transaction Committees’ meetings include scheduled and special unscheduled meetings. This sometimes poses an availability challenge for Directors. The Committees convened these special meetings to engage on various matters ranging from the SIU investigation to potential transactions and succession planning activities for the Board. In certain instances, there were joint sittings between various Committees to deliberate on common interests, like the draft integrated report and the draft business plans and budgets. We have included these in the attendance and budgets schedule for transparency.
Combined assurance
Telkom adopted a combined assurance approach to align and optimise all assurance-related activities across the Group and the various assurance providers, as described in the combined assurance framework. The framework articulates the minimum requirements for establishing combined assurance in the Group by providing a co-ordinated approach, accountability and direction to all assurance activities regarding the implementation and execution of the combined assurance.
The combined assurance model aims to align and integrate all assurance services and functions so that these can work in unison to enable an effective control environment, maintain the integrity of information used for decision-making, and support the integrity of Telkom’s external reports and underlying statements.
Through the Audit Committee (supported by the Risk Committee), the Board oversees the implementation of the combined assurance model and its effectiveness. It oversees that the key principal risks and opportunities inform combined assurance. These materially affect the Group’s ability to create value. The lines of assurance (consisting of Telkom’s subsidiaries, business unit, functional areas, and internal and external assurance providers) are collectively responsible for implementing and reporting on the combined assurance mandate through a coordinated approach to ensure its effectiveness.
This is enabled through assurance forums. Our regulators (for example, ICASA and the Competition Commission) may institute reviews to gain assurance that Telkom complies with regulations and applicable laws.
In collaboration with Telkom ERM, Telkom Group Internal Audit (TGIA) leads the co-ordination and facilitation of the Group’s combined assurance efforts across the lines of assurance. It aligns its assurance activities with the other assurance providers, including the external auditors, so that Telkom’s significant risks are adequately covered and managed. Enhancement of the Group’s combined assurance activities is continually focused on, and the Audit Committee is satisfied with the effectiveness of the combined assurance arrangements.
The combined assurance framework is outlined in the diagram below.
Board and Audit and Risk Committees |
External assurance providers |
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 |
 |
 |
|
|
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| Group Exco | GIA | |||||
| First line roles | Second line roles | Third line role | ||||
|
|
Independent and objective assurance | ||||
| Legend | |
|
Accountability, reporting |
|
Delegation, direction, resource and oversight |
|
Alignment, communication, co-ordination and collaboration |
Internal Audit
Telkom Group Internal Audit (TGIA or Internal Audit) is a Group-wide function and provides independent and objective assurance and consulting services to add value and enhance Telkom’s operations. The Telkom Group Internal Audit charter guides the TGIA. The charter sets out the terms of reference for the internal audit activity. It also serves as a basis for the governance of the internal audit activity necessary for TGIA to fulfil its role and to meet the performance criteria set by the Board and Audit Committee. The Internal Audit charter was updated and approved at the November 2022 Audit Committee meeting.
The Chief Audit Executive functionally reports to the Audit Committee Chairperson, and administratively to the GCFO. The Chief Audit Executive attends the Audit and Risk Committees meetings and is a standard invitee to Group Exco meetings or other Committee meetings comprising mostly Senior Executives. This structure promotes the independence of Internal Audit and the accomplishment of its responsibilities.
TGIA subscribes to a risk-based audit methodology in developing its annual audit plan that aligns with the Group’s strategic risks, considering opportunities and challenges in the respective operating environments. It provides support to the business unit and subsidiaries in achieving their strategic objectives. TGIA also collaborates with other assurance providers to continually enhance its combined assurance efforts.
The Audit Committee approves the audit plan annually. TGIA reviews and revises the plan every quarter as relevant to align with key business priorities and a changing business and risk environment. All changes to the plan are tabled with the Audit Committee for approval.
In FY2023, TGIA continued the execution of its internal audit plan for the year and prepared the internal audit plan for the new financial year. TGIA followed a systematic approach to evaluate and enhance the effectiveness of the Group’s governance, risk management and internal control processes. TGIA assured the Group’s stakeholders process by:
TGIA also conducts ongoing internal quality assessments. TGIA is subjected to an external quality assurance review at least once every five years. In FY2022, an external review was performed by the Institute of Internal Auditors South Africa. The review confirmed that TGIA conforms with the International Standards for the Professional Practice of Internal Auditing and performs its services effectively. TGIA achieved the highest ratings of “Generally Conforms” and “Generally Effective”.