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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

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 www.bluelabeltelecoms.co.za.

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:

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

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
Executive (weekly)		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 Compliance (quarterly)		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.
Remuneration and Nomination (bi-annually)		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 (bi-annually)		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 (Consultant) 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 strategy		Audit, Risk and Compliance			Remuneration and Nomination			Social, Ethics and Transformation		Investment
	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			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
Attendee