Corporate governance

The board of directors of Best Cut Limited sets the Group’s overall policy and provides guidance and input in areas relating to strategic direction, planning, acquisitions, performance measurement, resource allocation, key appointments, standards of conduct and communication with shareholders.

The Company’s corporate philosophy is consistent with the principles of the King Report II on Corporate Governance 2002 in that, inter alia:
  • the role of the Chairperson and the Chief Executive Officer are separated;
  • a non-executive director will be elected Non-Executive Chairman;
  • the board of directors is comprised of a majority of non-executive directors; and
  • service contracts of executive directors do not exceed two years in duration.

Mr Thomas Hill is the Chief Executive Officer of the Company.
The Remuneration and Audit Committees are chaired by non-executive directors.

The board will, as a minimum, ensure compliance with the following:

Code of Conduct

The directors acknowledge the importance of sound corporate governance and the guidelines set out in the Principles of Good Corporate Governance and Code of Best Practice (“Combined Code”). The directors therefore intend to embrace the Combined Code so far as is appropriate having regard to the size and nature of the various companies making up the Group. The board will take such measures so far as is practicable to comply with the Combined Code.

Management

The King Report 2002 emphasizes the importance of striking a balance between “performance” and “conformance”. In a corporate context, this means that the exercise of management’s skill, expertise and flair in running business operations and creating shareholder value should be encouraged, but must be subject to appropriate checks and balances that allow the Board to ensure that management is at all times acting in the interest of the organizations and its shareowners.

Management will adhere to the following as the seven primary characteristics of good governance:

Discipline

- commitment by the organizations senior management to widely accepted standards of correct and proper behaviour.

Transparency

- the ease with which an outsider can meaningfully analyse the organizations actions and performance.

Independence

- the extent to which conflicts of interest are avoided, such that the organizations best interest prevail at all times.

Accountability

- addressing shareowners’ rights to receive, and if necessary query, information relating to the stewardship of the organizations assets and its performance.

Responsibility

- acceptance of all consequences of the organizations behaviour and actions, including a commitment to improvement where required.

Fairness

- acknowledgement of, respect for and balance between the rights and interests of the organizations various stakeholders.

Social responsibility

- the organizations demonstrable commitment to Ethical standards and its appreciation of the social, environmental and economic impact of its activities on the communities in which it operates

Board of Directors

The Board of directors comprises of two non-executives and three executive director.

The Board Chair is a non-executive director.

A Board Charter is in place and defines the Board’s responsibilities for:

  • approving corporate philosophy, vision, mission and ethical values;
  • approving strategic plans, operating policies and implementing organisation structure;
  • identifying appropriate performance indices;
  • monitoring and evaluating performance against plans;
  • ensuring compliance with relevant legislation, regulations and corporate policy;
  • approving internal and external communication protocols and monitoring relations with shareholders and other stakeholders;
  • implementing risk management and internal control;
  • establishing appropriate Board committees;
  • selecting, monitoring, evaluating and compensating directors and key management personnel;
  • succession planning; and
  • assessing the Board’s own effectiveness.

The Board retains full and effective control over the organisation and decisions on material matters are reserved by the Board. The Board meets at least four times annually and more frequently if circumstances or decisions require.

Standing subcommittees of the Board have been appointed, details of which are set out below, while ad hoc subcommittees are created as and when necessary. The Board has also adopted, and regularly reviews, an authority policy governing the authority delegated to the management of the Group and setting out which matters are retained for decision by the Board.

No executive director has a service contract exceeding three years. Generally, directors have no fixed term of appointment but retire by rotation every year and, if available, are considered for re-appointment at the annual general meeting; the CEO is excluded from the rotation system.

Committees of the Board

Governance Committees

 

Operating Committees

Audit Committee

 

Executive Committee

Remuneration, Transformation and Nominations Committee

 

Finance and Investment Committee

Audit Committee

The Audit Committee meets at least semi-annually and will be attended by the DA and / or the reporting accountant. The role of the Audit Committee is to assist the Board by performing an objective and independent review of the organisation’s finance and accounting control mechanisms. The Company maintains accounting and administrative control systems required for the current level of operations. The Audit Committee will review and monitor the following:

Role and responsibility

  • Review of internal and external financial reporting;
  • Monitoring internal control systems;
  • Management of internal audit processes;
  • External audit scope and relationship; and
  • Review of compliance with legislation, regulation and internal policies.

The Audit Committee will set the principles for recommending the use of the external auditors for non-audit services. The Audit Committee will meet at least bi-annually to meet the objectives as set out above. The internal and external auditors have unrestricted access to the Audit Committee and its chairman with a view to ensuring that their independence is not impaired.

Remuneration, Transformation and Nominations Committee

Role and responsibility
  • Development of remuneration philosophy and strategy for the Group;
  • Determination of Group policy regarding executive remuneration;
  • Determination of specific remuneration packages for executive directors and senior management;
  • Review structure, size and composition of the Board and its committees;
  • Evaluate leadership needs of organisation and succession planning;
  • Identify and nominate candidates for Board appointment;
  • Implementation of transformation strategies;
  • Review of BEE legislation/regulations; and
  • Liaison with relevant stakeholders regarding BEE targets.

The Remuneration Committee is chaired by a non-executive director and will be attended by the Designated Adviser and two other non-executive directors. This committee will establish the Group’s remuneration policy, review the terms and conditions of employment of the executive directors and other executives, as well as incentive schemes.

The Board Nomination Committee shall be chaired by the Board Chairperson and shall constitute a majority of independent non-executive directors.

Executive Committee

Role and responsibility
  • Strategic direction;
  • Competitive landscape;
  • Business philosophy and practices;
  • Human resources management;
  • Information systems management;
  • Business plans/annual budget;
  • Operational policies and procedures;
  • Design and monitoring of key performance indicators; and
  • Evaluation of performance against targets.

Finance and investment committee

Role and responsibility
  • Capital raising and administration of banking facilities and relationships;
  • Evaluation of acquisitions and capital expenditure;
  • Setting up required acquisition performance criteria;
  • Monitor and tracking new acquisitions against performance criteria;
  • Determination of budget parameters;
  • Treasury protocol;
  • Accounting policies;
  • Taxation;
  • Dividend policy; and
  • Transaction approval frameworks.