Key elements of our corporate governance

In alignment with the Companies Act and the JSE Listings Requirements, our Board considers the following:

Board
composition1
(independence,
diversity – gender
and race – and
tenure)

Our Board has 17 members, 10 of whom are independent and four of whom are now executive directors – with the appointment of a new Financial Director and a second Deputy Chief Executive Officer. On 24 March 2016, shareholders were advised that lead independent director, Trevor Munday, would step down as director in the second half of 2016. However, on 8 November 2016, we announced that as a result of the increased demand on the Board due to the Barclays PLC sell-down, his departure has been postponed to provide continuity on our key committees.

Francis Okomo-Okello, the former Chairman of Barclays Bank of Kenya Limited, retired from that board on 7 October 2016. As indicated in previous reports, Francis has been regarded as independent in relation to Barclays Africa throughout.

12 of our 17 Board members are South African, of whom four are black and four are women. We aim to improve women representation on our Group Board. In 2016, we met our target of 25%, and we aim to reach 26%2 in 2017. Women make up 33% of our country bank boards, and 25% of our South African subsidiary boards – both figures are up year-on-year.

Barclays PLC is reconsidering its nominees to our Board. These changes are subject to Board and regulatory processes and will be announced when finalised.

In accordance with King III, all directors serving on the Board for longer than nine years are assessed to determine the level of their independence and the quality of their contribution. Yolanda Cuba and Trevor Munday have been assessed in this regard, and the Board has found them suitably independent, with continuing strong contributions.

No individual director or group of directors has unfettered powers of decision-making.

Tenure Executive directors Independent non-executive directors Non-executive directors
0 – 3 years Jason Quinn Alex Darko
Daisy Naidoo
Francis Okomo-Okello
Paul O’Flaherty
Wendy Lucas-Bull
René van Wyk
Mark Merson
4 – 6 years Peter Matlare3 Colin Beggs Ashok Vaswani
Patrick Clackson
7 – 9 years David Hodnett
Maria Ramos
Mohamed Husain
> 9 years Trevor Munday
Yolanda Cuba
1 As at 20 March 2017 and includes René van Wyk appointed in February 2017.
2 This is down from our previously reported target of 30% for 2017. This is as a result of the need to ensure Board continuity through the sell-down and separation processes, and includes the need to retain Barclays PLC nominees on the Board at this stage.
3 In his first year as an executive director (appointed 1 August 2016), having served as a non-executive director for the four-and-a-half years since December 2011.
Board
appointments
To govern a group of this magnitude and complexity, we appoint directors with appropriate regard to their education, diversity, expertise and experience in order to enhance the required collective set of skills, to ensure robust governance, keen commercial decision-making and strong technical inputs. Directors are appointed through a formal and transparent process which is facilitated by the Directors’ Affairs Committee on behalf of the Board. The Board as a whole approves all appointments on recommendation by the Directors’ Affairs Committee. The Directors’ Affairs Committee comprises only independent non-executive directors, and is chaired by the Group Chairman.
Group
Company Secretary
Our Board remains satisfied with the competency and experience of Nadine Drutman (BCom, LLB, LLM), our Group Company Secretary. She maintains an arm’s length relationship with the Board, providing guidance to Board members on the execution of their duties, and she maintains her knowledge of developments in corporate governance best practice and regulation. All Board members have unhindered access to her services in all aspects of the Board’s mandate and the operations of the Group.
Board evaluation In January 2017, the Board members evaluated the performance of the Board and the members, in respect of the 2016 year. The Board was found to be performing well. Identified areas of improvement will receive attention through the 2017 Board meeting cycle.
Applying King III principles
(King III fact sheet)

With the exception of the two areas below, the Group has applied all the principles of King III:

  • Remuneration: Although deferred bonus awards are not subject to financial performance conditions, the exposure to share price and malus provisions in the plan provides appropriate links to performance and risk adjustment. This structure is in accordance with the requirements of the UK’s Financial Stability Board’s principles for sound compensation practices. It generally subjects our incentive awards to higher levels of deferral than found elsewhere in the local market.
  • Information Technology Committee: The Chairman of the ITC is not an independent director. Our Board believes that Patrick Clackson has been well-placed to chair this committee, given his experience in banking and related systems as well as his ability to engage with and provide challenge to management on this topic.
Transition to
King IV

Following the launch of King IV on 1 November 2016, we conducted an assessment of our Board Charter and committee terms of reference against the principles and recommended practices of King IV. Our view is that we are well positioned in terms of King IV and, in the main, already apply most of its recommended practices.

Key considerations to enhance our application of practices under King IV and to respond to the subsequent related JSE amendments include the following:

  • The JSE introduced mandatory separate non-binding advisory votes by shareholders of the issuer at the annual general meeting on the remuneration policy and the implementation report (as described in King IV). We intend to include the second vote as part of our notice of annual general meeting in 2018. The Board notes that the consequences of not passing the non-binding advisory vote will require disclosure and engagement with shareholders.
  • King IV recommends that in relation to stakeholder relationships, the governing body should approve policy that articulates and gives effect to its direction on stakeholder relationships. We disclose our material issues in relation to stakeholders and will work towards an appropriate policy.
  • While we believe our level of disclosure is in line with current best practice, the specific disclosure obligations introduced by the recommended practices in King IV could lead to potential extensive additional disclosures in the form of our explanation of how we applied the principles.

    King IV recommends that the board of the holding company should ensure the agreed group governance framework is implemented across the group, and the subsidiaries must form part of the governance arrangements for the group and must agree to all the policies of the group. We have approximately 145 subsidiary entities and will supplement our existing arrangements so as to strengthen our governance in respect of all active entities.

Changes to governance

During the year, we established an Ad hoc committee of the Board dedicated to provide oversight and advice to management in respect of the Barclays PLC sell-down and its impact on the Group. This committee met frequently, and provided guidance to management and feedback to the Barclays Africa and Absa Bank Boards.

We work with the country boards to continuously improve skill sets, governance practices and quality of reporting. This year saw heightened feedback to the country boards through their chairmen on the matter of the separation to maintain open communication. This empowers the country boards to engage with their regulators. This process is ongoing with regular interactions at board and management level.

The Group Remuneration and Human Resources Committee changed its name to the Group Remuneration Committee (RemCo) following a review of its terms of reference. Consequently, it is more focused on remuneration matters, together with executive succession, attraction and retention. All other human resources matters were confirmed to be within the purview of the Social and Ethics Committee.