• Reviewing and guiding corporate strategy, major plans for action, risk policy, annual budgets and business plans; setting performance objectives; monitoring implementation and corporate performance; compliance with applicable laws and regulations; and overseeing major capital expenditures, acquisitions and divestitures;
• Monitoring the effectiveness of the company's governance practices and making changes as needed;
• Selecting, compensating, monitoring and when necessary, replacing key executives and overseeing succession planning;
• Aligning key executive and board remuneration with the longer term interests of the company and its shareholders;
• Ensuring a formal and transparent board nomination and election process;
• Monitoring and managing potential conflicts of interest of management, board members and shareholders, including misuse of corporate assets and abuse in related party transactions;
• Ensuring the integrity of the corporation's accounting and financial reporting systems, including the independent audit and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control and compliance with the relevant law, regulations, standards and codes of conduct; and
• Overseeing the process of disclosure and communications.

At least once per year, the board should undertake a systematic evaluation of its work in order to assess whether it has fulfilled its key functions and to identify areas for potential improvement.

1. Composition of the Board:

The board should comprise a majority of non-executive, independent directors, of which the chairperson should be one. The CEO will be an executive member of the board and attend board meetings, if appropriate. However, the CEO should have limited voting rights in respect of the oversight function of the board, particularly with regards to areas which fall within the CEO's own direct mandate. The chairperson may convene meetings of the board without executive directors. The inclusion of the CEO and other executive directors in the board is subject to shareholder approval at an annual general meeting.

When selecting candidates for election as non-executive members of the board, care should be taken to ensure that:

• The proposed candidates are not:
• The CEO;
• Members of the management committee, management, managers, or employees of the company or of a subsidiary, partnership or joint venture of the company;
• Where they have been previously dependent upon the company but are no longer employed that a reasonable period of time has elapsed so as to facilitate their independence;
• Already members of 5 or more boards or similar governing bodies. For this purpose, each membership of a governing body of a stock-exchange-listed company or chairpersonship of a board counts double. Where this limit is reached then on an annual basis, approval by the board, based upon criteria of effective performance, should be made, documented and presented at the general meeting of shareholders for approval;
• They are "fit and proper" persons:
• The proposed candidates are persons with the necessary knowledge, competencies, and applicable experience and are sufficiently independent;
• Not insolvents or previous rehabilitated insolvents;
• Not persons with a criminal record or of dubious character;
• They are unlikely to encounter conflicts of interest as a result of their work on the board;
• There are enough members of the board who are not and have not in the past been, dependent on the company; and
• The composition of the board takes into account the scope of any international activity.

The members of the board must have enough time to do their work and must carry out their work carefully and conscientiously. For as long as they serve on the board, they must comply with the criteria that are enumerated above in relation to the selection of candidates for the board concerning independence, conflict of interest and multiple memberships of boards, committees and other governing bodies. They must be loyal to the group in their conduct, they must not accept appointments in competitor companies and they are subject to insider trading rules. It is a matter for the full board to judge whether a company is a competitor or not.

2. Board Committees:

The board has the discretion to establish committees to fulfill specific consultative and or supervisory tasks within its overall remit. The composition and the mandates for such committees need to be carefully formulated, depending on the importance of these functions to the overall role of the board (which depends on the company's business activities) and consequently, their significance in terms of the efficiency of the board.

The key purpose of such committees, subject to legal requirements, is to inform board decisions in specific areas, although certain committees may be delegated responsibilities for action in clearly predetermined circumstances. Minutes should be prepared for each committee's meetings and confirmed by the full board annually. Committee chairpersons should report on the work of their respective committees to the full board on a regular basis.

In appointing the members of the board committees, the board must ensure:

• The suitability of the board committee members concerned in terms of their respective fields of expertise;
• That the board committee members have sufficient time to perform their tasks and responsibilities effectively;
• That subject to its future establishment that any nomination and remuneration committee is chaired, in principle, by the chairperson of the board and comprised of non-executive directors; and
• That subject to its future establishment that the chairperson of the governance, risk and compliance committee is not the chairperson of the board and that the committee is comprised of non-executive directors.
• That subject to its future establishment that the chairperson of the Executive Management Committee shall be the CEO and that the Executive Management Committee shall be comprised of the Executive Directors. The broad function of the Executive Management Committee is to undertake the more routine and regular functions of Board decision making, particularly those relating to execution of strategy and business operations, including approving those transactions and actions of the CEO and or Executive Directors that are above their respective limits of authority. Minutes should be prepared for each committee's meetings and confirmed by the full board at the Boards respective meetings. The Executive Management Committee chairperson should report on the work of the committees to the full board at the Boards respective meetings. Executive Directors carry equal vote and decisions carry based on a simple majority. Should the CEO not be present then another Executive Director may stand in his stead. The board will clearly delegate such matters and its authority in writing and annually approve the limits of authority of the Executive Management Committee, the CEO and of the Executive Directors.

 

3. Conflicts of Interest, Business Transactions and Gifts:

In reaching their decisions, board members must not pursue any interests of their own that conflict with the interests of the group. They must not, for their own benefit or for the benefit of persons with whom (or companies with which) they are connected exploit any business opportunity available to the group. Board members must disclose any conflict of interest to the chairperson of the board in a timely fashion. The chairperson must decide whether the disclosure is to be shared and in appropriate cases, must make preparations for the board to decide, whether the concerned member should participate in upcoming board meetings.

When a conflict exists the concerned board member must not take part in decisions related to his or her conflict of interest. The concerned board member must resign if the conflict of interest is material or is not temporary. The board should define "material" and "temporary" in these circumstances.

Board members must disclose on a timely basis, their planned business transactions (not including transactions of a routine day-to-day nature) with the group to the chairperson of the board. The chairperson of the board must ensure that such transactions are not carried out, except with the board's prior written permission. The board is justified in granting its permission for such a transaction only if the transaction is on conditions that regularly apply in the industry and it is not contrary to the group's interests.

Board members must not accept any gift or other benefit in connection with their work for themselves or for third parties, if doing so could prejudice the interests of the group or its customers. Members of the board must not disclose the group's confidential information or secrets. They must not involve employees or third parties, unless this is essential for the proper performance of their board duties. They must ensure that these employees and third parties also observe the duty of non-disclosure.

Subject to the requirements of the law, if board members breach their duties, they are liable, within the law, to the group for the losses caused.

4. Board Remuneration:

The remuneration of board members is determined in accordance with the business of the company, its industry and must be reasonable and appropriate to members' responsibilities and the scope of their work. The key criteria for determining reasonable and appropriate remuneration are the scope of their tasks (making allowance for the offices of chairperson and or deputy chairperson) and the company's performance.

In order to maintain a proper arm's length relationship to the board's incentive measures, board members must not receive remuneration related to the share price of the company.

Relationship with External Auditors:

For the board, the audit of the financial statements is an independent assurance of openness to the company's stakeholders. The appointed independent public accountant is a supporting independent partner in the process of monitoring the company's financial reporting, controls, compliance and the company's risk management systems.

To ensure the independence of the appointed public accountant, the board must check that the independent public accountant is not subject to any conflict of interest and that not more than 20% of its total revenue derives from engagements with the company or associated group companies.

Before submitting a proposal to the general meeting of shareholders for the appointment of an independent public accountant, the board must obtain a statement from the proposed independent public accountant stating:

• Whether and where applicable, which professional, financial, or other relationships exist between the independent public accountant and their governing bodies and senior partners on the one hand and the company or associated group companies and its governing bodies on the other, that could call the public accountant's independence into question; and
• To what extent the proposed independent public accountant has performed work for the company or associated group companies over the previous fiscal year in addition to the audit of the financial statements and what work of this kind has been contractually agreed for the following year.

Before appointing the proposed independent public accountant, the board must consider whether additional audit issues should be defined that extend the scope and focus of the audit. These should be formally agreed upon and communicated to the proposed independent accountant for their written consent.

In principle, the board should require the rotation of the engagement partner off the company's account no less frequently than every five years.

The board whilst recommending, must support the choice of independent public accountant appointed by the general meeting of shareholders. It should also ensure that the independent public accountant informs the board without delay in respect of:

• Any grounds for disqualification and any outstanding partiality arising during the audit, unless resolved without delay after such criteria arising;
• All facts and events that are significant to the board's tasks that become apparent during the audit; and
• Any breach of the group's principles of corporate governance that become evident to the auditors during the process of the audit.

The chairperson of the board must ensure that:

• Every member of the board receives the audit reports in good time before the pertinent board meetings; and
• The independent public accountant is present at the pertinent board meetings and reports on the principal results of the audit.