King III summary

Summary of the application of King III principles

It is the responsibility of the Board to ensure the application of the principles contained in the King III Code, without diluting the Group’s focus on sustainable performance. Where relevant, Blue Label’s approach and application of King III is explained below.

The table below summarises Chapter 2 of the principles of King III and Blue Label’s application thereof (the complete register is available on the website

Chapter and principle Comments on application
Chapter 2 – Board and directors
The Board should act as the focal point for and custodian of corporate governance   The Board Charter sets out the Board’s role, powers and responsibilities both in terms of the latest governance developments as well as the requirements for its composition, meeting procedures and work plan. A review of the Board Charter is under way to ensure alignment to governance requirements.
The Board should appreciate that strategy, risk, performance and sustainability are inseparable   The Board is active in forming the strategy of the Group, ensuring appropriate alignment with the purpose and mandate of the Group. The Board appreciates that strategy, risk, performance and sustainability are inseparable.
The Board and its directors should act in the best interests of the Company   The Board Charter requires the Directors to act in the best interest of the Company by ensuring that individual Directors:

adhere to the standard of Directors’ conduct as set out in the Companies Act;
recognise that his/her primary fiduciary duty is towards the Company as an entity and to exercise such with the best interests of the Company at heart;
are permitted to take independent advice necessary to carry out their duties following an agreed procedure;
disclose real or perceived conflicts to the Board and deal with them accordingly;
deal in securities only in accordance with the policy adopted by the Board.
The Board should consider business rescue proceedings or other turnaround mechanisms as soon as the Company is financially distressed as defined in the Act   No business rescue proceedings were required.
The Board should elect a Chairman of the Board who is an Independent Non-Executive Director. The CEO of the Company should not also fulfil the role of Chairman of the Board   The Chairman of the Board is an experienced Independent Non-Executive Director elected by the Board.
The Board should appoint the Chief Executive Officer and establish a framework for the delegation of authority   The Board approved the role of joint Chief Executive Officers and has formalised the role and function of the joint Chief Executive Officers including the adoption of a Governance Guideline and Delegation of Authority framework.
The Board should comprise a balance of power, with a majority of Non-Executive Directors. The majority of Non-Executive Directors should be independent   The Board comprises:

Four Executive Directors
Two Non-Executive Directors
Four Independent Non-Executive Directors.
Directors should be appointed through a formal process   A RNC is in place and assists in identifying suitable members that will address the Board’s requirements in terms of knowledge, skills and resources. All appointments are made in compliance with the Companies Act, JSE Listings Requirements and the Company’s Memorandum of Incorporation.
The induction and ongoing training and development of directors should be conducted through formal processes   Induction programmes for new Directors are tailored based on the knowledge and experience of the Director and focus on providing information on the Board structure and the Group’s strategy and operations. Ad hoc presentations are made to the Board by professional advisers and Senior management to ensure that the Board is up to date with governance, regulatory and operational developments. This programme will be formalised further in the coming year.
The Board should be assisted by a competent, suitably qualified and experienced Company Secretary   The role and function of the Company Secretary is in line with the requirements of the Act, governance principles and Listings Requirements.
The evaluation of the Board, its committees and the individual Directors should be performed every year   A Board evaluation was not undertaken during the past year. A questionnaire has been developed as a basis for evaluating the Board’s performance in terms of composition, roles, relationships, stakeholder engagement and meetings. The evaluation will be conducted on an annual basis from 2014.
The Board should delegate certain functions to well-structured committees but without abdicating its own responsibilities   The Board has appointed five subcommittees to assist it in its duties:

Investment Committee
Social and Ethics Committee
A governance framework should be agreed between the Group and its subsidiary boards   The governance framework is applied by subsidiary boards and will be further formalised.
Companies should remunerate directors and executives fairly and responsibly   A RNC is in place and assists the Board in ensuring the Group’s remuneration policy attracts, retains and motivates top-quality people in the best interests of the Group.
Companies should disclose the remuneration of each individual Director and Prescribed officer   The disclosure of Directors’ and Prescribed officer’s remuneration meets the requirements of the Act and this governance principle.
Shareholders should approve the Company’s remuneration policy   Approved at the Annual General Meeting on 29 November 2012.
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