Board composition, structure and report back

BOARD OF DIRECTORS

The Board directs Blue Label towards and facilitates the achievement of our strategy and operational objectives. It is accountable for the development and execution of Blue Label’s strategy, operating performance and financial results. Its primary responsibilities include determining the purpose and values; providing strategic direction to Blue Label; appointing the joint Chief Executive Officers; identifying key risk areas and key performance indicators of Blue Label’s businesses; monitoring the performance of Blue Label against agreed objectives; deciding on significant financial matters; approving policies and reviewing the performance of the Executive Directors against defined objectives. A range of non-financial information is also provided to the Board to enable it to consider qualitative performance factors that involve broader stakeholder interests.

The Board, which meets at least quarterly, retains full and effective control over all the operations.

Additional ad hoc Board meetings are convened as circumstances require.

BOARD CHARTER

Our Board Charter assists our Board in conducting its business according to legislative requirements and the principles of good corporate governance.

It ensures that each Director is aware of his or her powers, duties and responsibilities when acting on behalf of the Blue Label Telecoms Group. The Board Charter is subject to the provisions of the Companies Act, JSE Listings Requirements, our Memorandum of Incorporation (MOI) and all other applicable legislation. The Board Charter covers the role and function of the Board; its detailed responsibilities; how it discharges its duties; the Board composition; and the establishment of Board Committees.

The Board Charter as well as the terms of reference and work plans of the Board subcommittees are aligned with the requirements of King IV.

The Board has concluded that it has collectively satisfied and fulfilled its responsibilities in accordance with the charter.

A Delegation of Authority Framework has been developed and implemented across all Blue Label companies. The Board is satisfied that the Delegation of Authority Framework contributes to role clarity and the effective exercise of authority and responsibilities.

Following the acquisition of Cell C, the Blue Label Board has been actively monitoring and advising on the alignment of governance structures and processes at Cell C with those of Blue Label.

BOARD COMPOSITION

Blue Label has a unitary Board structure comprising nine Directors; with the majority being Independent Non-executive Directors. This is incorporated into our Board Charter, which promotes power and authority at Board of Directors level, to ensure that no one Director has unfettered powers of decision-making. A biography of each Director appears on Board of Directors

In line with King IV, the roles of the Chairman and the joint CEOs are separate. The Board is led by Larry Nestadt, an Independent Non-executive Chairman. The joint CEOs are Brett Levy and Mark Levy.

The Chairman’s role includes setting the ethical tone for the Board and ensuring that the Board remains efficient, focused and operates as a unit. The Chairman provides overall leadership to the Board, without limiting the principle of collective responsibility for Board decisions. He also facilitates appropriate communication with shareholders and enables constructive relations between the Executive and Non-executive Directors.

The joint CEOs’ principal roles are to provide leadership to the executive team in running Blue Label’s businesses. The Board defines Blue Label’s levels of authority, reserving specific powers for the Board, while delegating others to senior management. The collective responsibility of management vests with the joint CEOs who regularly report to the Board on Blue Label’s progress in delivering its objectives and strategy.

Blue Label’s Financial Director is Dean Suntup. The ARCC is satisfied that he has the appropriate expertise and experience for this position.

Blue Label has implemented a holistic succession planning process at Board, top level management and subsidiary management levels. The succession plans are reviewed and approved by the appropriate bodies annually and documented accordingly.

Furthermore, the business continuity plan for Blue Label has been drafted such that it incorporates the subsidiary succession plans. Blue Label has influential joint CEOs who co-founded the business, both of whom have a vested interest in the long-term future of Blue Label.

However, in unforeseen circumstances, Blue Label has robust succession planning in place for both CEOs.

Blue Label recognises the value of diversity and our Board in turn is committed to promoting gender and race equality. This policy is available online at www.bluelabeltelecoms.co.za. Our talent management processes, together with our policy, will enable us to improve diversity within Blue Label.

On an ongoing basis, the Board considers its structure, its gender, race and size composition, as well as the relationship between Executive and Non-executive Directors. It is committed to making sustainable progress towards ensuring that the Board has the necessary depth having regard to the strategic direction of Blue Label. The Board has a policy focusing on the promotion of broader diversity at Board level, specifically addressing the promotion of the diversity attributes of gender, race, culture, age, field of knowledge, skills and experience. No specific targets have been set in relation to the Board diversity policy, however, we have partnered with subject matter experts to do a gap analysis on our ESG compliance, including diversity.

The Board is actively pursuing the appointment of additional Independent Non-executive Directors to further enhance independence and diversity of skills, race and gender at Board level. The Remuneration and Nomination Committee (RNC) annually debates the independence of its Independent Non-executive Directors who have served on the Board for a period of nine years or more. Laurence Nestadt, Joe Mthimunye and Jerry Vilakazi have been assessed in this regard. The Committee has found them suitably independent, with continuing strong contributions, considering their experience within Blue Label and the sector, and they are considered to continue operating independently and objectively and have no conflicts of interest.

Mr SJ Vilakazi was due to rotate off the ARCC in 2022, however, the Board took the decision that he should continue in his role on the Committee.

The Board wishes to assure all stakeholders that the tenure and independence of Non-executive Directors is vigorously debated and tested and that all Board meetings are robust in terms of their deliberation.

Given the complexity of the industry within which Blue Label operates and the complexity of Blue Label itself, the Board believes that long-term knowledge and understanding of the issues surrounding the business are invaluable. The RNC is managing the succession plan at Board level to ensure that a pipeline of new Independent Non-executive Directors is established and that the succession plan will be seamless and maintain a mixture of new appointees with experienced Directors.

BOARD APPOINTMENTS

During the period we appointed Ms LE Mthimunye effective 1 November 2022 and Ms H Masondo effective 1 August 2023.

One-third of the Directors retire by rotation every three years in terms of the MOI. If eligible, available and recommended for re-election by the RNC, their names are submitted for re-election at the AGM. In this regard, Messrs JS Mthimunye and BM Levy, and Ms NP Mnxasana will be retiring at the forthcoming AGM and, being eligible, have made themselves available for re-election. A brief biography of each Director appears on Board of Directors.

The RNC assists the Board with the assessment, recruitment and nomination of new Directors, subject to the whole Board approving these appointments.

Board members are also invited to interview potential appointees.

A formal and transparent procedure applies to all new Board appointments, which are subject to approval by shareholders at the first AGM following that Director’s appointment. Prior to appointment, candidates are required to complete a fit and proper test, as per the JSE Listings Requirements.

A policy requiring Directors to observe a “cooling-off” period before accepting appointments to other Boards, which may present a conflict of interest, has been included in the Board Charter.

Our Board subcommittees are structured and attendance at meetings during FY23 is presented as follows:

Attendance at meetings

Board

Special Board

Audit, Risk and Compliance

Special Audit Risk and Compliance

Remuneration and Nomination

Social, Ethics and Transformation

Investment

Total number of meetings held during the year

5

2

5

1

4

3

1

Actual attendance/possible maximum attendance of meetings

LM Nestadt

5/5

1/2

—

—

4/4

—

—

KM Ellerine

4/5

*

2/2

*

—

—

—

3/3

*

0/1

*

GD Harlow

2/2

**

2/2

**

2/2

**

—

**

3/3

**

1/1

**

1/1

**

BM Levy

5/5

2/2

4/5

***

1/1

***

3/4

***

1/3

1/1

MS Levy

5/5

2/2

5/5

***

1/1

***

3/4

***

—

1/1

NP Mnxasana

5/5

1/2

5/5

1/1

—

—

—

JS Mthimunye

5/5

1/2

5/5

1/1

4/4

—

1/1

SJ Vilakazi

5/5

2/2

5/5

1/1

4/4

3/3

—

DA Suntup

5/5

2/2

5/5

***

1/1

***

4/4

***

—^

1/1

DR Hilewitz

—

—

—

—

—

—

1/1

PL Zim

3/5

****

1/2

****

—

—

2/4

****

—

—

LE Mthimunye

3/3

*****

—

*****

3/3

*****

1/1

*****

—

1/2

*****

0/0

*****

*	Resigned 5 June 2023
**	Resigned 19 October 2022
***	Attendee
****	Resigned 22 February 2023
*****	Appointed 1 November 2022
^	Alternate to BM Levy

 

SUBCOMMITTEE STRUCTURE AND REPORT BACK

The Board remains accountable for all matters where it has delegated responsibility to its subcommittees. The committees, their members and principal functions and focus areas are set out below:

EXECUTIVE COMMITTEE

Members

MS Levy (Chair)

G Levin

BM Levy

J Newman

M Nyawane

D Rama

S Ramdhani

A Roberts

M Shaik

D Simba

DA Suntup

The Executive Committee was reconstituted in June 2022.

KEY OBJECTIVE AND TERMS OF REFERENCE

Blue Label’s Executive Committee is augmented beyond the Executive Directors, by the inclusion of operational and functional management to provide a forum for the dissemination of strategies and policies to operating subsidiary levels and to provide oversight and feedback from operations on strategic matters in a combined forum. Blue Label’s strategic and policy decisions are typically formulated by the Executive Directors and approved by the Board. The Committee has moved from a monthly to a quarterly meeting format, in line with its primary function of acting as an oversight forum and reporting structure between the Board, Executive Directors and subsidiary management.

Certain Blue Label Executive Committee members are represented on boards of operating subsidiaries and act as liaisons with operating subsidiary CEOs and/or management.

The Executive Committee has concluded that it has fulfilled its responsibilities in accordance with its terms of reference.

• monitoring the overall performance of Cell C; concentration on new revenue streams, products and services that are less susceptible to margin compression;
• cost conscious culture;
• strategic deployment of treasury resources;
• continuing with the inculcation of outcomes-based family values in Blue Label; and
• compliance with policies and controls.

AUDIT, RISK AND COMPLIANCE COMMITTEE

Members and attendees	Number of meetings	Meeting attendance (%)
JS Mthimunye (Chair)	5/5	100
LE Mthimunye**	3/3	100
N Mnxasana	5/5	100
SJ Vilakazi	5/5	100
BM Levy*	4/5	80
MS Levy*	5/5	100
DA Suntup*	5/5	100
GD Harlow***	2/2	100

*	Attendee by invitation.
**	Appointed on 1 November 2022.
***	Resigned on 19 October 2022.

 

KEY OBJECTIVE AND TERMS OF REFERENCE

The primary objective of the Committee is to assist the Board of Directors in fulfilling its oversight responsibilities for the financial and non-financial reporting process, the system of internal control, the audit process, the risk management process and the organisation’s process for monitoring compliance with laws and regulations and the code of conduct.

The ARCC concluded that it has fulfilled its responsibilities in accordance with its terms of reference.

Refer to governance of risk, governance of sustainability, information and technology governance, combined assurance and to the ARCC reports for further details.

• monitor the financial performance of Cell C post recap;
• continue to improve governance and compliance processes throughout the Group;
• review fraud mitigation strategies and internal controls; and
• adopting an ESG Oversight and Responsibility Framework.

REMUNERATION AND NOMINATION COMMITTEE

Members and attendees	Number of meetings	Meeting attendance (%)
SJ Vilakazi (Chair of Remuneration Committee)	4/4	100
LM Nestadt (Chair of Nomination Committee)	4/4	100
GD Harlow**	3/3	100
JS Mthimunye	4/4	100
PL Zim***	2/4	50
BM Levy*	3/4	75
MS Levy*	3/4	75
DA Suntup*	4/4	100

*	Attendee by invitation
**	Resigned on 19 October 2022.
***	Resigned on 22 February 2023.

 

KEY OBJECTIVE AND TERMS OF REFERENCE

Ensure competitive remuneration and incentive policies align with the strategy to drive performance and value creation that attract and retain the right talent. Review design and targets of incentive schemes and remuneration packages; Executive and Non-executive Director appointments and succession planning; annual evaluation of independence of Non-executive Directors and composition of the Board and its Committees.

The Remuneration and Nomination Committee (RNC) assists the Board with overseeing and making recommendations to the Board for its consideration and final approval on remuneration policies and incentives, Board composition, structure and size, succession planning in terms of key positions and the identification and nomination of suitable candidates to fill Board vacancies as and when they arise.

Key roles of the Committee include:

• Ensuring competitive remuneration and incentive policies align with the strategy to drive performance and value creation that attract and retain the right talent;
• Reviewing the design and targets of incentive schemes and remuneration packages;
• Executive and Non-executive Director appointments and succession planning; and
• Annual evaluation of the independence of Non-executive Directors and composition of the Board and its Committees.

The RNC concluded that it has fulfilled its responsibilities in accordance with its terms of reference.

The RNC continues to ensure that total rewards are set at levels that are competitive and drive performance in the short and long term, ensuring alignment with shareholder interests and at the same time promoting an ethical culture and responsible corporate citizenship.

The Committee is mandated by the Board to continually assess the executive remuneration market and governance framework.

The Committee will consider current market conditions, Blue Label’s strategy and operational performance.

• Attracting and retaining key talent to deliver our strategic goals and shareholder returns;
• Continued benchmarking against best practice, refining where appropriate (for example, ensuring our growth targets are realistic given current economic conditions in the country);
• Succession planning across all levels in Blue Label, with a focus on transformation;
• Best practice reviews of ESG goals, to ensure that there are measurable set targets in place which are able to be achieved;
• Continued annual engagement with our institutional shareholders for their input and advice;
• Continuing our policy of gender and equity pay parity and the need to drive to achieve our targets in the next two years;
• Continuing to identify and develop future leaders through the leadership development programme; and
• Market alignment of variable pay quanta and pay-mix following the stratification of employee-wide pay bands and reviewing our allocation methodology under our variable remuneration structures.

SOCIAL, ETHICS AND TRANSFORMATION COMMITTEE

Members and attendees	Number of meetings	Meeting attendance (%)
SJ Vilakazi (Chair)	3/3	100
KM Ellerine*	3/3	100
GD Harlow**	1/1	100
BM Levy (DA Suntup alternate to BM Levy)	1/3	33
LE Mthimunye***	1/2	50

*	Resigned on 5 June 2023.
**	Resigned on 19 October 2022.
***	Appointed on 1 November 2022.

 

KEY OBJECTIVE AND TERMS OF REFERENCE

The role of the Committee is to assist the Board with the oversight of transformation, social and ethical matters relating to Blue Label and its subsidiary companies. Responsibilities include monitoring Blue Label’s activities and compliance with legislation relating to equality, black economic empowerment, good corporate citizenship, the environment, health, public safety, consumer and labour relations, as well as advise the Board where necessary and appropriate. Review of the ethical business conduct, including any activity on the ethics hotline.

The Social, Ethics and Transformation Committee concluded that it has fulfilled its responsibilities in accordance with its terms of reference.

Refer to the human capital report, the Social, Ethics and Transformation Committee report, the effective and ethical leadership report and stakeholder relations sections for further details.

• Retain compliance level for BBBEE scorecard at level 4;
• Build leadership for the future through our leadership development programme by increasing our number of managerial employees enrolled on management programmes;
• Balance gender representation towards our target of 50%/50% overall by 2026;
• Support the job creation project within Trust Blu through the U-Belong initiative and external funding to support this project. Create 200 new jobs and absorb 1% at the end of the financial year;
• Improve management control by a further two points to support and improve our three-year equity plan, of which one year has lapsed already; and
• Appoint one more Black candidate on Blue Label Board in the African Female category.

INVESTMENT COMMITTEE

Members and attendees	Number of meetings	Meeting attendance (%)
LE Mthimunye (Chair)***	0/0	0
GD Harlow*	1/1	100
KM Ellerine**	0/1	0
DR Hilewitz	1/1	100
BM Levy	1/1	100
MS Levy	1/1	100
JS Mthimunye	1/1	100
DA Suntup	1/1	100

*	Resigned on 19 October 2022.
**	Resigned on 5 June 2023.
***	Appointed as Chair on 1 November 2022.

 

KEY OBJECTIVES AND TERMS OF REFERENCE

• Review for approval the proposed acquisitions, investments and disposals of Blue Label recommended by the Executive Committee;
• Review, consider and recommend acquisitions and investments of Blue Label to the Board;
• Annually review the performance of each investment and acquisition made over the past five years; and
• Review and update the Capital Allocation Policy of Blue Label.

The Investment Committee concluded that it has fulfilled its responsibilities in accordance with its terms of reference.

• Monitor the maturity of the Capital Allocation Framework;
• Monitor the performance of the Cell C investment; and
• Monitor past acquisitions to ensure that they are performing in line with expectations.