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 Blue Label’s application of the principles of King III (the complete register is available on the
website at www.blts.co.za):
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Chapter and principle |
|
Comments on application |
 |
|
|
|
| |
Chapter 1 – Ethical leadership and corporate citizenship |
| |
The Board should provide effective leadership
based on an ethical foundation |
|
Blue Label Telecoms formed a Social, Ethics and Transformation
Committee with a clear mandate to monitor social, ethical and
transformation activities and to report matters within its mandate
to the Board as appropriate. The committee monitors the Group’s
activities with regard to the environment, health and safety
including the impact of the Group’s activities and that of its
products and services. Blue Label has communicated its
commitment to ethical leadership through stated values.
Continued effort is being made to further formalise the
committee’s activities and monitoring of ethics and conduct.
(Refer to governance framework on page 38 of the 2014
Integrated Annual Report.) |
| |
The Board should ensure that the Company is
and is seen to be a responsible corporate
citizen |
|
| |
The Board should ensure that the Company’s
ethics are managed effectively |
|
| |
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. The
Board Charter has been reviewed 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; and |
|
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. See
Chairman’s curriculum vitae on page 21. |
| |
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; and |
|
four independent non-executive directors. |
|
| |
Directors should be appointed through
a formal process |
|
The RNC is a committee of the Board and assists in
identifying and selecting suitable members who will meet
the Board’s requirements in terms of knowledge, skills and
resources. All appointments are made in compliance with
the Companies Act, Listings Requirements and the
Company’s MOI. |
| |
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. |
| |
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 |
|
In line with business best practice and King III, an
appraisal of the performance of the Board, its committees
and individual directors was completed during May 2014.
The appraisal was undertaken by means of a selfassessment
questionnaire. There was 100% participation
by all the directors. In general, the appraisals revealed that
the Board and committees were performing well. Areas
identified as requiring development were acknowledged
and discussed at Board level. Board and committee
assessments are conducted annually in the form of written
responses and tabled at the Board for review and
implementation of follow-up actions to improve on
identified weaknesses. |
| |
The Board should delegate certain
functions to well-structured committees
but without abdicating its own
responsibilities |
|
The Board has appointed the following committees to
assist it in its duties:
|
ARCC |
|
Investment Committee |
|
RNC |
|
Social, Ethics and Transformation Committee |
|
Exco |
|
| |
A governance framework should be agreed
between the Group and its subsidiary
boards |
|
The governance framework is applied by subsidiary
boards. |
| |
Companies should remunerate directors
and executives fairly and responsibly |
|
The 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 2013. |
| |
Chapter 3 – Audit committees |
|
|
| |
The Board should ensure that the Company
has an effective and independent audit
committee |
|
The committee comprises three non-executive directors. |
| |
The Audit Committee members should be
suitably skilled and experienced independent
non-executive directors |
|
The members of the Audit, Risk and Compliance Committee have
experience in audit, accounting, commerce, economics, law,
corporate governance and general industry, as is evident from the
curriculum vitae of each of the members contained in the
Integrated Annual Report. |
| |
The Audit Committee should be chaired by an
independent non-executive director |
|
The Audit, Risk and Compliance Committee is chaired by an
independent non-executive director. |
| |
The Audit Committee should oversee
integrated reporting |
|
The Audit, Risk and Compliance Committee reviews the
full Integrated Annual Report and recommend approval to the
Board. |
| |
The Audit Committee should ensure that a
combined assurance model is applied to
provide a coordinated approach to all
assurance activities |
|
The ARCC reviews the co-operation and co-ordination between
the internal and external audit functions. This will be further
formalised through a Combined Assurance facilitation. |
| |
The Audit Committee should satisfy itself of the expertise, resources and experience of the
Company’s finance function |
|
The finance function has been evaluated and found suitable. |
| |
The Audit Committee should be responsible
for overseeing of internal audit |
|
The Group’s internal audit function is outsourced to KPMG
Services Proprietary Limited and operates with the required
independence and resources, budget, standing and authority
within the Group to discharge its functions. |
| |
The Audit Committee should be an integral
component of the risk management process |
|
The Audit, Risk and Compliance Committee has accepted the
responsibility for risk management assigned to it by the Board and
appointed an Internal Audit, Risk and Compliance Committee, a
subcommittee of the Audit, Risk and Compliance Committee. |
| |
The Audit Committee is responsible for
recommending the appointment of the
external auditor and overseeing the external audit process |
|
The Audit, Risk and Compliance Committee recommends the
appointment of the external auditor annually and oversees the
external audit process. |
| |
The Audit Committee should report to the
Board and shareholders on how it has
discharged its duties |
|
See Audit Committee report on page 67 of the 2014 Integrated
Annual Report. |
| |
Chapter 4 – The governance of risk |
|
|
| |
The Board should be responsible for the
governance of risk |
|
See governance of risk report on page 49 of the 2014 Integrated
Annual Report. |
| |
The Board should determine the levels of risk
tolerance |
|
| |
The Risk Committee or Audit Committee
should assist the Board in carrying out its risk
responsibilities |
|
| |
The Board should delegate to management
the responsibility to design, implement and
monitor the risk management plan |
|
| |
The Board should ensure that risk assessments
are performed on a continual basis |
|
| |
The Board should ensure that frameworks and
methodologies are implemented to increase
the probability of anticipating unpredictable
risks |
|
| |
The Board should ensure that management
considers and implements appropriate risk
responses |
|
| |
The Board should ensure continual risk
monitoring by management |
|
| |
The Board should receive assurance regarding
the effectiveness of the risk management
process |
|
| |
The Board should ensure that there are
processes in place enabling complete, timely,
relevant, accurate and accessible risk
disclosure to stakeholders |
|
| |
Chapter 5 – The governance of information technology |
|
| |
The Board should be responsible for
information technology (IT) governance |
|
See technology governance report on page 50 of the 2014
Integrated Annual Report. |
| |
IT should be aligned with the performance
and sustainability objectives of the Company |
|
|
| |
The Board should delegate to management
the responsibility for the implementation of
an IT governance framework |
|
|
| |
The Board should monitor and evaluate
significant IT investments and expenditure |
|
|
| |
IT should form an integral part of the
Company’s risk management |
|
|
| |
The Board should ensure that information
assets are managed effectively |
|
|
| |
A Risk Committee and Audit Committee
should assist the Board in carrying out its
IT responsibilities |
|
|
| Chapter 6 – Compliance with laws, rules, codes and standards |
| |
The Board should ensure that the Company
complies with applicable laws and considers
adherence to non-binding rules, codes and
standards |
|
See compliance report on page 51 of the 2014 Integrated Annual
Report. |
| |
The Board and each individual director should
have a working understanding of the effect of
the applicable laws, rules, codes and standards
on the Company and its business |
|
| |
Compliance risk should form an integral part
of the Company’s risk management process |
|
| |
The Board should delegate to management
the implementation of an effective compliance
framework and processes |
|
| |
Chapter 7 – Internal audit |
|
|
| |
The Board should ensure that there is an
effective risk-based internal audit |
|
The role of internal audit is outlined in the terms of reference of
the Audit, Risk and Compliance Committee, as well as the
internal audit charter. The internal audit plan is approved annually
by the Audit, Risk and Compliance Committee and progress
against the plan is monitored on a quarterly basis by the
committee. |
| |
Internal audit should follow a risk-based
approach to its plan (note 8) |
|
Internal audit is independent from management and the internal
audit plan provide a balance between risk and compliance taking
into account consideration of the strategic risk profile of the
Group, core business processes as defined by management and
the operating and control environment. |
| |
Internal audit should provide a written
assessment of the effectiveness of the
Company’s system of internal controls and risk
management |
|
Internal audit forms an integral part of the combined assurance
model, as internal assurance provider and provides an annual
written assessment to the Board on the effectiveness of internal
controls and risk management. It also provides an annual written
assessment of internal financial controls to the Audit, Risk and
Compliance committee. |
| |
The Audit Committee should be responsible
for overseeing internal audit |
|
The terms of reference of the Audit, Risk and Compliance
Committee outlines the responsibility of the committee with
regard to the internal audit function and reports to the Audit, Risk
and Compliance Committee. |
| |
Internal audit should be strategically
positioned to achieve its objectives |
|
The internal audit function is outsourced and remains
independent. |
| |
Chapter 8 – Governing stakeholder relationships |
|
|
| |
The Board should appreciate that
stakeholders’ perceptions affect a Company’s
reputation |
|
See stakeholder relations page 52. |
| |
The Board should delegate to management to
proactively deal with stakeholder relationships |
|
| |
The Board should strive to achieve the
appropriate balance between its various
stakeholder groupings, in the best interests of
the Company |
|
| |
Companies should ensure the equitable
treatment of shareholders |
|
| |
Transparent and effective communication with
stakeholders is essential for building and
maintaining their trust and confidence |
|
| |
The Board should ensure that disputes are
resolved as effectively, efficiently and
expeditiously as possible |
|
| |
Chapter 9 – Integrated reporting and disclosure |
|
|
| |
The Board should ensure the integrity of the
Company’s Integrated Report |
|
The Audit, Risk and Compliance Committee reviews the
Integrated Annual Report and recommends it to the Board for
approval. |
| |
Sustainability reporting and disclosure should
be integrated with the Company’s financial
reporting |
|
The Integrated Annual Report aims to link material Company
information in such a way that the Blue Label stakeholders obtain
a view of the commercial, social and environmental context
within which the Group operates. |
| |
Sustainability reporting and disclosures should
be independently assured |
|
The Audit, Risk and Compliance Committee reviews the
Integrated Annual Report. |