Governance framework

The Board regards governance as fundamentally essential to the success of the Company’s business and is committed to applying the principles of good governance in directing and managing the Company to achieve its strategic objectives. The Board is the focal point for, and custodian of, the Company’s governance framework through its committee structures, relationship with management, shareholders and other stakeholders of the Company. The Board remains ultimately accountable for the performance and affairs of the Company.

Governance framework

Governance framework

The governance framework facilitates a balance between the Board’s role of providing direction and oversight with accountability to support acceptable risk parameters, consistent compliance with regulations, standards and codes relevant to the Group while encouraging entrepreneurial and innovative spirit which remain key drivers of Group performance. Governance processes in the operating subsidiaries are aligned with the governance framework established by Blue Label. Each subsidiary company has its own board of directors and their strategy, business plan and performance criteria are clearly defined. The strategy and business plan of each subsidiary are presented to the Blue Label Board by the subsidiary’s management on an annual basis. Subsidiary boards comprise executive and non-executive directors, some of whom are executive and non-executive directors of Blue Label.

Application of King III

Blue Label is committed to the governance principles of King III and continues to develop its governance policies, practices and procedures in line with an integrated governance, risk and compliance framework. It is the responsibility of the Board to ensure the application of the principles contained in King III. The JSE Listings Requirements further stipulate compulsory adherence to certain specific requirements of King III. A summarised table of Blue Label’s application of King III is available on the Company’s website at

Role of the Board

The Board conducts its business in accordance with the principles of King III, which includes exercising discipline, independence, responsibility, fairness, social responsibility, transparency and the accountability of directors to all stakeholders. The Board remains ultimately accountable for the performance of the Company and oversees processes which ensure that each business segment is responsible for acting in accordance with sound governance principles. The Board has a charter which sets out its role and responsibilities. Key responsibilities are summarised as follows:

Provide effective leadership based on an ethical foundation.
Ensure that the Company has an effective and independent audit, risk and compliance committee.
Contribute towards and approve the strategic direction of the Company.
Satisfy itself that the strategy and business plans proposed for the achievement of the Group’s objectives do not give rise to risks that have not been thoroughly assessed by management.
Ensure that the strategy will result in sustainable outcomes taking into account financial, environmental and social objectives as approved by the Board.
Ensure the integrity of the Company’s integrated annual report.
Define levels of authority, define areas of materiality and approve a framework for delegated authority.
Report on the effectiveness of the systems of internal controls.
Be responsible for the governance of risk through effective risk management practices, including regularly reviewing and evaluating risks to the Company and ensuring the existence of an effective risk-based internal audit as well as appropriate internal controls.
Be responsible for IT governance, including but not limited to monitoring and evaluating significant IT investments and expenditure as well as management of information assets.
Ensure that Blue Label is and is seen to be a responsible corporate citizen.
Identify, manage and monitor the gap between stakeholder perceptions and the performance of the Company so as to manage Blue Label’s reputation.

The Board acts in the best interests of the Company by ensuring that individual directors:

adhere to the legal standards of conduct set out in the Act;
are permitted to take independent professional advice in connection with discharging their duties following an agreed procedure;
disclose real and perceived conflicts to the Board annually and prior to each Board meeting; and
deal in securities only in accordance with the Dealings in Securities Policy adopted by the Board.

The Board is kept appraised of the Group’s going concern status and monitors the solvency and liquidity of the Company and Group on a regular basis.

Composition of the Board

Blue Label has a unitary Board presently consisting of 10 Directors. The four Executive Directors are the two joint Chief Executive Officers, the Finance Director and the Chief Operating Officer. The remainder of the Board comprises two Non-Executive Directors and four Independent Non-Executive Directors. The Chairman is elected by the Board on an annual basis and his role is formalised in the Board Charter.

All Directors are subject to retirement by rotation every three years in terms of the MOI. In this regard Messrs KM Ellerine, JS Mthimunye and LM Nestadt will be retiring at the forthcoming Annual General Meeting and, being eligible, have made themselves available for re-election. A brief curriculum vitae of each Director appears on pages 21 to 25.

The Board, on the recommendation of the RNC, assessed the independence of the Non-Executive Directors at its meeting held in June 2013 and confirmed the categorisation of directors, as listed on page 102.

Appointment, development and assessment of the Board

The Board on the advice of the RNC ensures that it possesses the required number of Directors with the correct skills, expertise, diversity in demographics and mix of personalities, appropriate for conducting the business of the Board effectively. Board candidates are selected and appointed by the Board based on the recommendation of the RNC.

Induction for new Directors is tailored based on the knowledge and experience of the Director in a listed environment. Focus is placed on providing information on the Board structure, business operations and Group strategy. Ongoing training and development of Directors involve ad hoc presentations to the Board by professional advisers and Senior management to ensure that the Board is kept abreast with governance, regulatory and operational developments.

Assessment of the performance of the Board collectively and the Directors individually will be conducted on an annual basis. The Board is assessed in terms of the following categories, effectiveness and composition, Board dynamics in terms of number of meetings, agendas, time allowed for meetings and committee structures as well as risk management, succession planning, ethical leadership and corporate citizenship. The results of the assessment is summarised in a report to the chairman who provides relevant feedback to the Board.

Company Secretary

The Company Secretary is responsible for the effective and efficient administration of the Group in accordance with the Act, King III and the JSE Listings Requirements. In addition, providing the Directors collectively and individually with guidance as to their duties, responsibilities and powers and, ensures that all Directors have full and timely access to all information that may be relevant to the proper discharge of their duties and obligations. Directors and Senior management have direct access to the guidance and assistance of the Company Secretary.

The Board’s formal assessment of the competence, qualifications and experience of the Company Secretary was not completed in the review year, as the Company Secretary resigned with effect from 30 April 2013. Ms Janine van Eden was appointed Company Secretary with effect from 1 June 2013 and it is intended that the Board’s formal assessment will take place in 2014.

The Company Secretary is not a Director of the Board or of any subsidiary boards.

Board committees

The Board has delegated certain functions to well-structured committees without abdicating its own responsibilities. The committees, its members and principal functions are set out below:

Committee Members and attendees Principal activities
  MS Levy (C)
EC de Villiers*
BM Levy
MV Pamensky
DB Rivkind
DA Suntup
Implement strategies and policies of the Group
Manage the business of the Group
Senior management appointments and performance management
Prioritise the allocation of capital, technical and human resources
Review and approve acquisitions, disposals and investments of up to R40 million per transaction.


Audit, Risk and
  JS Mthimunye (C)
EC de Villiers*
GD Harlow
NN Lazarus SC
BM Levy*
MS Levy*
DB Rivkind*
DA Suntup*
JS Vilakazi
  More information on the activities and responsibilities of the committee is included on pages 58 to 62.
and Nomination
  NN Lazarus SC (C)
EC de Villiers*
KM Ellerine
GD Harlow
BM Levy*
MS Levy*
DB Rivkind*
Determine and agree with the Board, the framework or broad policy for the remuneration of the Executive Directors, Non-Executive Directors and any other members of executive management or as it is designated to consider
Review, for recommendation to the Board, the design of and targets for the Group’s Forfeitable Share Plan
Determine annually whether awards are to be made under the Forfeitable Share Plan and the overall and individual amounts of such awards
Recommend to the Board the remuneration of Non-Executive Directors for approval by shareholders
Identify and nominate candidates for the approval of the Board, to fill vacancies as and when they arise
Recommend the appointment of new Executive and Non-Executive Directors, including recommendations on the composition of the Board and the balance between Executive and Non-Executive Directors and any adjustments that are deemed necessary.

More information on the activities and responsibilities of the RNC is included on pages 52 to 57.
Social, Ethics and Transformation
  JS Vilakazi (C)
MJ Campbell*
EC de Villiers*
KM Ellerine
GD Harlow
IJ Hindley*
NN Lazarus SC*
BM Levy (alternate
DB Rivkind)
The main function of the committee is to monitor the Group’s activities and compliance with legislation relating to equality, black economic empowerment, good corporate citizenship, the environment, health, public safety and consumer and labour relations, as well as to advise the Board of Directors, where necessary and appropriate
The Group’s ethical business conduct, including any activity on the ethics hotline, is reviewed by the committee.

The report of the committee is on page 63.
Investment (ad hoc, minimum 2)   GD Harlow (C)
EC de Villiers*
DR Hilewitz
NN Lazarus SC
BM Levy
MS Levy
JS Mthimunye
MV Pamensky
DB Rivkind
DA Suntup
Review acquisitions, investments and disposals made within the Executive Committee’s mandate
Review, consider and approve proposed acquisitions, investments and disposals of the Group recommended by the Executive Committee ranging from between R40 million and R100 million per transaction
Recommend to the Board acquisitions and investments of the Group above R100 million
Review the performance of each investment and acquisition made.

C – chairman
*attends by invitation

Attendance at Board and committee meetings

      Board   Board
Risk and
Ethics and
  Number of meetings held for the year   4   1   4     2     2   4  
Directors, members and attendees
Number of meetings attended
  LM Nestadt   4   1   NM     NM     NM   NM  
  KM Ellerine   3   1   NM     2     2   NM  
  GD Harlow   4   A   4     2     2   4  
  BM Levy   4   1   2 Tick   1   1   3  
  MS Levy   4   1   4   2   NM   4  
  NN Lazarus SC   4   1   4     2     A   4  
  JS Mthimunye   4   1   4     NM     NM   3  
  MV Pamensky   3   1   NM     NM     NM   4  
  DB Rivkind   4   A   4   2   NM *   4  
  JS Vilakazi   3   1   2     NM     2   NM  
  MJ Campbell   NM   NM   NM     NM     2   NM  
  DA Suntup   NM   NM   4   NM     NM   4  
  IJ Hindley   NM   NM   NM     NM     2   NM  
  DR Hilewitz   NM   NM   NM     NM     NM   4  

NM – Not a member
A – Apology
* Alternate to BM Levy

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