Board Committees

 

 

 

While the whole board remains accountable for the performance and affairs of the company, it delegates certain functions to subcommittees and management to assist in discharging its duties. Appropriate structures for those delegations are in place, accompanied by monitoring and reporting systems.

Each subcommittee acts within agreed, written terms of reference. The chair of each subcommittee reports at each scheduled board meeting.

The chair of each subcommittee is a non-executive director and is required to attend annual general meetings to answer questions.

Two Naspers directors serve on the Media24 safety, health and environmental committee.

The established board subcommittees are detailed below.

Executive Committee

This committee comprises a majority of non-executive directors, one being the chair of the board, who also serves as the chair of the executive committee, plus two executive directors. The executive committee acts for the board in managing urgent issues when the board is not in session, subject to statutory limits and the board’s limitations on delegation. This committee met three times during the financial year. Details of attendance at meetings are provided here.

Audit Committee

This committee, chaired by Mr Boetie van Zyl, comprises only non-executive independent directors. All members are financially literate and have business and financial acumen.

The committee held four meetings during the past inancial year. Details of attendance are provided here. The chief executive and inancial director attend committee meetings by invitation.

Both internal and external auditors have unrestricted access to the committee through the chair. The internal and external auditors also report their indings to the committee with members of executive management not in attendance.

The chair of the board is not a member of the audit committee, but may attend meetings by invitation.

This committee’s main responsibilities, in addition to its responsibilities in terms of the Companies Act, are as follows:

  • Review and approve the company's integrated annual report, annual financial statements, interim and provisional reports, and any other press releases with material finiancial or internal control impacts. Final approval rests with the board.
  • Review the viability of the company and the group on a going-concern basis, making relevant recommendations.
  • Receive all audit reports directly from the external auditor.
  • Annually review and report on the quality and effectiveness of the audit process, including assessing the external auditor’s independence.
  • Evaluate the lead partner of the external auditor, who will be subject to rotation as required by regulations.
  • Present the committee’s conclusions on the external auditor to the board, preceding the annual request to shareholders to approve the appointment of the external auditor.
  • Approve the external auditor’s terms of engagement and remuneration. Evaluate and provide commentary on the external auditor’s audit plans, scope of indings, identified issues and reports.
  • Develop a policy for the board to approve non-audit services performed by the external auditor. Approve non-audit services provided by the external auditor in accordance with this policy.
  • Receive notice of reportable irregularities (as deined in the Auditing Profession Act) that have been reported by the external auditor to the Independent Regulatory Board for Auditors.
  • Evaluate the effectiveness of internal audit, including its purpose, activities, scope, adequacy and costs, and approve the annual internal audit plan and any material changes.
  • Satisfy itself it has appropriately addressed:
    • financial reporting risks
    • internal financial controls
    • fraud risk as it relates to financial reporting, and
    • IT risks as these relate to financial reporting.
  • Evaluate the nature and extent of the formal documented review of internal financial controls to be performed annually by internal audit on behalf of the board. Weaknesses in internal inancial controls that are considered material (individually or in combination with other weaknesses) and that resulted in actual material financial loss, fraud or material errors, to be reported to the board and in the integrated annual report.
  • Approve for recommendation to the board the internal audit charter, which must be reviewed annually.
  • Conirm the appointment or dismissal of the head of the group’s internal audit function and periodically review his/her performance. Ensure the internal audit function is subject to a periodic independent quality review.
  • Review internal audit and the risk committee’s reports to the audit committee.
  • Review compliance with the requirements of the JSE Limited, the United Kingdom Listing Authority (UKLA) and the London Stock Exchange.
  • Review procedures in light of the King Code on Corporate Governance.
  • Monitor compliance with board-approved group levels of authority.
  • Evaluate:

    • legal matters that may affect the financial statements
    • matters of significance reported by the internal and external auditors, and any other parties, including implied potential risks to the group and recommendations on appropriate improvements
    • major unresolved accounting or auditing issues, and
    • progress on completion of matters reported by the internal and external auditors.
  • Establish procedures for the receipt, retention and treatment of complaints received on accounting, internal control, auditing matters,
  • risk management and management of other fraudulent activities, including procedures for conidential, anonymous reporting by employees.
  • Annually evaluate the performance and appropriateness of the expertise and experience of the financial director and the inance function, and disclose the results in the integrated annual report.
  • Ensure a combined assurance model is applied to provide a coordinated approach to all assurance activities, monitoring the relationship between external providers and the company. Coordination between internal and external auditors must be evaluated.
  • Report to shareholders at the annual general meeting on fulfulling its duties in terms of the Companies Act during the financial year.
  • Execute assignments commissioned by the board.
  • Annually assess its charter and recommend any required amendments for approval by the board.
  • Annually review the charters of significant subsidiaries’ audit committees, and review their annual assessment of compliance with these charters to establish if the Naspers committee can rely on the work of the subsidiary companies’ committees.
  • Perform an annual self-assessment of its effectiveness, reporting these findings to the board.
Human Resources and Remuneration Committee

The main objective of this committee is to fulfil the board’s responsibility for the strategic human resources issues of the group, particularly the appointment, remuneration and succession of the most senior executives. The committee comprises a minimum of three independent non-executive directors. Its responsibilities are outlined in the remuneration report.

Risk Committee

The committee comprises a minimum of three independent non-executive directors, as well as the chief executive and financial director. The chair of the board may not serve as chair of this committee.

Members of the committee are individuals with risk management skills and experience.

The committee’s responsibilities include:

  • Review and approve for recommendation to the board a risk management policy and plan developed by management. The risk policy and plan are reviewed annually.
  • Monitor implementation of the risk policy and plan, ensuring an appropriate enterprise- wide risk management system is in place with adequate and effective processes that include strategy, ethics, operations, reporting, compliance, IT and sustainability.
  • Make recommendations to the board on risk indicators, levels of risk tolerance and appetite.
  • Monitor that risks are reviewed by management, and that management’s responses to identified risks are within board-approved levels of risk tolerance.
  • Ensure risk management assessments are performed regularly by management.
  • Issue a formal opinion to the board on the effectiveness of the system and process of risk management.
  • Review reporting on risk management that is to be included in the integrated annual report.
  • Review annually the charters of the group’s significant subsidiary companies’ risk committees, and their annual assessment of compliance with these charters to establish if the Naspers committee can rely on the work of these risk committees.
  • Perform an annual self-assessment of the effectiveness of the committee, reporting these indings to the board.