The Board leads ethically and effectively
Resilient’s Board is its governing body. The Board leads with integrity, competence, responsibility and accountability, in line with principle 1 of King IV. The directors hold one another accountable for decision-making and ethical behaviour.
The chairman is tasked with monitoring this as part of his duties. Resilient has a documented code of conduct which is reviewed on an annual basis by the Social and Ethics Committee and recommended to the Board for approval.
The Board is responsible for ensuring that the Group’s ethics policies are appropriate and that they are enforced. This responsibility is discharged through the Social and Ethics Committee.
The Board evaluates its own performance as well as that of its sub-committees, its chairman, its individual members and the company secretary through a formal process that is led by the Nomination Committee. The purpose of the evaluations is to ensure continued improvement in the performance and effectiveness of the Board.
The Board governs the ethics of Resilient in a way that supports the establishment of an ethical culture
The Board has a fiduciary duty to act in good faith, with due care and diligence and in the best interests of the Group and its stakeholders. It is the primary body responsible for the corporate governance values of the Group. While control is delegated to management in the day-to-day management of the Group, the Board retains full and effective control over the Group. A formal board charter, as recommended by King IV, has been adopted.
The Board forms the core of the values and ethics subscribed to by the Group. The code of conduct is applicable to each director as well as the employees of Resilient and requires all employees to adhere to ethical business practices in their relationships with each other, suppliers, investors and all other stakeholders. It stipulates, among other things, that all stakeholders are expected to act in good faith, that bribery in any form is not tolerated, all conflicts of interest need to be declared in compliance with the Company’s Conflict of Interest Policy and that compliance with all legislation is of utmost importance. The code of conduct and the Conflict of Interest Policy is provided to each employee on employment and is available on the Company’s intranet. As at the reporting date, there were no conflicts of interest.
The Group has a “no tolerance” policy towards fraud within the Group or with any of the counterparties the Group chooses to engage with. Resilient has implemented a whistle-blower hotline where any instances of fraud or other breaches of ethical behaviour may be reported. The whistle-blower hotline is externally managed to ensure the anonymity of whistle-blowers and reports directly to the chairman of the Board and the chairman of the Audit Committee. The whistle-blower hotline is accessible by means of a dedicated email address as well as a dedicated toll-free telephone number, the details of which are published on Resilient’s website. All incidents are investigated appropriately.
The Board is not aware of any transgressions of the code of ethics during the financial period. No issues of non-compliance, fines or prosecutions have been levied against Resilient.
The Board ensures that Resilient is and is seen to be a responsible corporate citizen
The Board has delegated to the Social and Ethics Committee the responsibility for monitoring and reporting of social, ethical, transformational and sustainability practices that are consistent with good corporate governance.
The Board appreciates that Resilient’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process
The Board acknowledges that it is responsible for ensuring the following functions as set out in the board charter:
- Good corporate governance and implementation of the code of corporate practices and conduct as set out in King IV;
- That the Group performs at an acceptable level and that its affairs are conducted in a responsible and professional manner; and
- The Board recognises its responsibilities to all stakeholders.
The Board’s responsibility is to ensure that Resilient creates value for its shareholders. In so doing, it considers the legitimate interests and expectations of stakeholders, which include the present and potential future investors in Resilient.
The Board approves and monitors the implementation of the strategy and business plans. Assisted by the Risk Committee, the Board reviews key risks and opportunities impacting on the achievement of its strategic objectives.
This Integrated Report demonstrates how performance is achieved through the strategic initiatives. Resilient sets and achieves its strategic initiatives with reference to risks and opportunities. The Board assesses both the positive and negative outcomes resulting from its business model continuously.
The Board ensures that reports issued by Resilient enable stakeholders to make informed assessments of Resilient’s performance and its short-, medium- and long-term prospects
The Board is responsible for formulating the Group’s communication policy and ensuring that spokespeople of the Group adhere to it. This responsibility includes clear, transparent, balanced and truthful communication to stakeholders.
The Board is assisted by the Audit Committee in reviewing and approving the Integrated Report. The report is prepared in line with IFRS, the International Integrated Reporting Council’s Integrated Reporting Framework, the reporting principles contained in King IV, the JSE Listings Requirements and Debt Listings Requirements.
In its interim and annual reports to stakeholders, Resilient details both its historical performance and future outlook. This, together with further information in those and other communications, enables stakeholders to make informed assessments of Resilient’s prospects.
The Board serves as the focal point and custodian of corporate governance in Resilient.
Ultimate control of the Group rests with the Board while executive management is responsible for the operational management of the Group. To achieve this, the Board is responsible for establishing the objectives of the Group and setting a philosophy for investments, performance and ethical standards.
Although quarterly board meetings are scheduled every year, additional meetings are called should circumstances require it. During the six-month reporting period ended 31 December 2021, three board meetings were held. The additional meeting was as a result of the need to approve the investment in a 25% interest in four shopping centres in France through RPI.
While certain responsibilities are delegated to committees or management executives, the Board acknowledges that it is not discharged from its obligations regarding these matters.
The Board acknowledges its responsibilities as set out in the board charter in the following areas:
- Ensuring that it acts in the best interests of the Company;
- The adoption of strategic plans and ensuring that these plans are carried out by management;
- Monitoring of the operational performance of the business against predetermined budgets;
- Monitoring the performance of management at both operational and executive level;
- Endeavouring to ensure that the Audit Committee and the internal audit function remain effective and independent;
- Annually assessing the independence of every non-executive director including those with tenures exceeding nine years;
- Ensuring that the Group complies with all laws, regulations and codes of business practice;
- Ensuring that the remuneration of directors is disclosed fully and individually;
- Obtaining approval from shareholders at each AGM for non-executive directors’ fees in respect of the ensuing financial year;
- Seeking approval from shareholders at the AGM, by way of a non-binding advisory vote, of Resilient’s Remuneration Policy and Remuneration Implementation Report; and
- Ensuring a clear division of responsibilities at board level to ensure a balance of power and authority in terms of Group policies.
The Board’s role and responsibilities and the way that it executes its duties and decision-making are documented and are set out in the board charter which is reviewed on an annual basis.
Before each board meeting, an information pack, which provides background information on the performance of the Group for the year to date and any other matters for discussion at the meeting, is distributed to each board member. At meetings, the Board considers both financial and non-financial, or qualitative, information that might have an impact on stakeholders.
The Board is satisfied that it has fulfilled its responsibilities in accordance with its charter.
The Board comprises the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively.
Resilient has a unitary board with an independent non-executive director as chairman. The Board comprises four executive directors and seven independent non-executive directors. All directors serve for a maximum period of three years and are subject to retirement by rotation and re-election by shareholders in general meeting. Non-executive directors who have served on the Board for a tenure exceeding nine years are required to stand for re-election on an annual basis. Board appointments are made in terms of the policy on nominations and appointments as applied by the Nomination Committee. Such appointments are subject to final approval by the Board and shareholders.
The Board, with the assistance of the Nomination Committee, considers, on an annual basis, its composition in terms of balance of skills, experience, diversity, independence and knowledge and whether this enables it to effectively discharge its role and responsibilities.
Barry van Wyk has served on the Board for more than nine years. The Nomination Committee and the Board have assessed his independence and are satisfied that he is independent and able to exercise objective judgement free from undue influence.
The Board is satisfied that its composition has the necessary balance of skills, experience, diversity, independence and knowledge needed to discharge its role and responsibilities.
The Board’s independence from the executive management team is ensured by the following:
- Separation of the roles of chairman and chief executive officer, with the chairman being independent;
- The Board comprising a majority of independent non-executive directors;
- All sub-committees having a majority of independent directors;
- Non-executive directors not holding service contracts;
- All directors having access to the advice and services of the company secretary; and
- With prior agreement from the chairman, all directors are entitled to seek independent professional advice concerning the affairs of the Company at the Company’s expense.
No director has an automatic right to a position on the Board. All directors are required to be elected by shareholders at an AGM. In a general meeting, the shareholders may appoint any person to be a director, subject to the provisions of the Memorandum of Incorporation.
The roles of chairman and chief executive officer are separate and the composition of the Board ensures a balance of authority, precluding any one director from exercising unfettered powers of decision-making.
The Board is committed to actively managing diversity as a means of enhancing the Company’s performance by utilising the contribution of the diverse skills and talents of its directors. The Board has an approved policy on broad diversity at board level which requires the Nomination Committee to consider a broad and diverse pool of talent when considering board appointments. The need for diversity must be balanced with the need to appoint individuals with the necessary skills and experience to serve on the Board.
The Board has not established diversity targets for appointments to the Board. The policy is reviewed on an annual basis to ensure that it continues to facilitate the principles of broad diversity at board level.
The Board ensures that its arrangements for delegation within its own structures promote independent judgement and assist with the balance of power and the effective discharge of its duties.
The Board has established six sub-committees to assist the directors in fulfilling their duties and responsibilities.
Each committee has a formal charter and reports to the Board at regular intervals. The charters, which set out the objectives, authority, composition and responsibilities of each committee, have been approved by the Board. All the committees are free to take independent outside professional advice, as and when required, at the expense of the Company.
Membership of the committees is as recommended in King IV. The composition of the committees of the Board and the distribution of authority between the chairperson and other directors is balanced and does not lead to instances where individuals dominate decision-making within governance structures or where undue dependency is caused.
The Board maintains the following sub-committees:
- Audit Committee;
- Investment Committee;
- Nomination Committee;
- Remuneration Committee;
- Risk Committee; and
- Social and Ethics Committee.
King IV recommends practices which promote effective collaboration among committees with minimal overlap and division of duties.
Each year the Nomination Committee reassesses the composition of each sub-committee to ensure that each sub-committee has the appropriate level of skills and experience to be able to effectively execute its function.
Directors’ interests
A full list of directors’ interests is maintained and directors certify that the list is correct at each board meeting. Directors recuse themselves from any discussion and decision on matters in which they have a material financial interest.
Dealing in securities by the directors
Dealing in the Company’s securities by directors and Company officials is regulated and monitored as required by the JSE Listings Requirements and Debt Listings Requirements. In addition, Resilient maintains a closed period from the end of a financial period to the date of publication of the financial results and during any period when the Company’s shares are trading under a cautionary announcement.
Internal financial and operating controls
A framework of financial reporting, internal and operating controls has been established by the Board to ensure reasonable assurance as to accurate and timeous reporting of business information, safeguarding of Group assets, compliance with laws and regulations, financial information and general operation.
The Board reviewed and was satisfied with the effectiveness of the internal financial and operating controls, the process of risk management and the monitoring of legal governance compliance within the Group.
The Board ensures that the evaluation of its own performance and that of its sub-committees, its chair and its individual members support continued improvement in its performance and effectiveness
The Board evaluates its own performance as well as that of its sub-committees, its chairman, its individual members and the company secretary through a formal process that is led by the Nomination Committee. The purpose of the evaluations is to ensure continued improvement in the performance and effectiveness of the Board.
The results of the Board evaluation indicated that the Board is confident that the governance of the Board and its sub-committees is adequate and they are functioning correctly. Moreover, the directors believe that the Board is performing according to its agreed standards and expectations.
The Board is satisfied that the evaluation process undertaken is improving its performance and effectiveness. The Board confirms that it has executed its responsibilities under the Board Evaluation Policy.
The Board ensures that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities.
In terms of its formal charter, the Board’s responsibilities include the appointment of the chief executive officer and the approval of corporate strategy, risk management and corporate governance. The Board reviews and approves the business plans and monitors the financial performance of the Group and implementation of the strategies.
The Board recognises that management is an integral part of the risk management and governance structure and to this end, the Board relies on regular management reports and updates. The Board recognises that delegating authority does not reduce its statutory and common-law fiduciary duties.
Board members have full and unrestricted access to management and all Group information and property. They are entitled, at the cost of the Group, to seek independent professional advice in the fulfilment of their duties. Directors may meet separately with management, without the attendance of executive directors.
The chief executive officer has an employment contract that can, subject to fair labour practices, be terminated upon three months’ notice. The Board has approved that the chief executive officer serves on the board of directors of Lighthouse as a representative of Resilient. In addition, the Board approved that he serves on the board of Hammerson plc, a company in which Lighthouse has a significant interest. Other than these board appointments, the chief executive officer does not have any work commitments outside of Resilient and its related companies. A succession plan for the chief executive officer is in place.
The Board is satisfied that the delegation of authority framework contributes to role clarity and the effective exercise of authority and responsibilities.
Company Secretary
The company secretary is appointed on a full-time basis with the requisite knowledge, experience and stature. All directors have unlimited access to her services and she is responsible to the Board for ensuring that proper corporate governance principles are adhered to. This includes signing off on the disclosure of membership of board structures, the number of meetings of the Board and each sub-committee and attendance at each meeting as well as the overall content of the committee information and reporting in the public domain.
The Board has considered the competence, qualifications and experience of the company secretary who is deemed fit to continue in the role as company secretary. The company secretary is not a director of Resilient and has an arm’s length relationship with the Board.
The Board governs risk in a way that supports Resilient in setting and achieving its strategic objectives.
The Risk Committee assists the Board with the governance of risk. The Board is aware of the importance of risk management as it is linked to the strategy, performance and sustainability of Resilient. The role of the Risk Committee is to ensure that the Company has implemented an effective policy and plan for risk management which enhances the Company’s ability to achieve its strategic objectives.
The Risk Committee implements a process whereby risks to the sustainability of the Group’s business are identified and managed within acceptable parameters. The Risk Committee delegates to management the responsibility to continuously identify, assess, mitigate and manage risks within the existing and ever-changing risk profile of Resilient’s operating environment. Mitigating controls are formulated to address the risks and the Board is kept up to date on progress on the risk management plan.
Des Gordon is a common member of the Audit Committee and the Risk Committee ensuring that there is co-ordination in respect of the evaluation and reporting of risks.
The Board governs technology and information in a way that supports Resilient in setting and achieving its strategic objectives.
The Risk Committee assists the Board with the governance of technology and information. The Board is aware of the importance of technology and information as it is inter-related to the strategy, performance and sustainability of Resilient.
The Risk Committee is responsible for information and technology governance in accordance with King IV. The Committee oversees the implementation of IT governance mechanisms and standards to ensure the effectiveness and efficiency of the Group’s information systems. Resilient’s IT function is outsourced to a third-party service provider and is governed by a service level agreement. Compliance with the service level agreement is monitored by management. The external IT specialists assist in governing technology and information and their terms are reviewed on a regular basis.
The Board governs compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that supports Resilient being ethical and a good corporate citizen.
The Board is responsible for the Group’s compliance with applicable laws and recognises that compliance is an ethical imperative. The Board has delegated the responsibility for implementing compliance to management. The Board is assisted by the Risk Committee in monitoring compliance.
There were no material regulatory penalties, sanctions or fines for contraventions of, or non-compliance with, statutory obligations.
The Board is not aware of any material contraventions of laws and regulations by either the Company or any of its directors.
The Board ensures that Resilient remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term.
Resilient remunerates fairly, responsibly and transparently so as to promote the creation of value in a sustainable manner. The objective of the Group’s remuneration strategy is to attract and retain key talent and to motivate and reward employees appropriately to ensure they achieve key organisational objectives.
Resilient has implemented an employment equity plan and supports the promotion of equal opportunities. Resilient’s focus is on developing its employees such that there are suitable internal candidates to lead the Group in the future. The Group encourages its employees to attend job-related training such as industry-specific conferences and courses. The Training and Employment Equity Committee meets on a regular basis and approves the employment equity plan, the workplace skills plan and annual training report. The Committee is chaired by a member of senior management.
The Board ensures that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of Resilient’s external reports
Resilient implements a combined assurance model that is overseen by the Audit Committee.
The Board has delegated to the Audit Committee oversight of, inter alia, effectiveness of the Group’s assurance services with focus on combined assurance including external audit, internal audit and the finance function as well as the integrity of the Integrated Report and the annual financial statements. The Board is satisfied that assurance results in an adequate and effectively controlled environment and integrity of reports for better decision-making.
External audit
A key factor that may impair the auditor’s independence is a lack of control over non-audit services provided by the external auditor. The external auditor’s independence is deemed to be impaired if the auditor provides a service which:
- results in auditing of own work by the auditor;
- results in the auditor acting as a manager or employee of the Group;
- puts the auditor in the role of advocate for the Group; or
- creates a mutuality of interest between the auditor and the Group.
The Company addresses this issue through three primary measures, namely:
- disclosure of the extent and nature of non-audit services;
- the prohibition of selected services; and
- prior approval by the Audit Committee of non-audit services.
Other safeguards encapsulated in the policy include:
- the external auditor is required to assess periodically, in their professional judgement, whether they are independent of the Group;
- the Audit Committee ensures that the scope of the auditor’s work is sufficient and that the auditor is fairly remunerated; and
- the Audit Committee has primary responsibility for making recommendations to the Board on the appointment, reappointment and removal of the external auditor.
The Audit Committee reviews audit plans for external audits and the outcome of the work performed in executing these plans. It further ensures that items identified for action are followed up. The external auditor reports annually to the Audit Committee to confirm that they are and have remained independent from the Group during the reporting period.
In the execution of its governance role and responsibilities, the Board adopts a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of Resilient over time.
Establishing and maintaining effective stakeholder relationships are not only essential to sustain the growth of the Company but also an essential component of sound governance. Resilient has identified its stakeholder groups and actively balances their legitimate and reasonable needs, interests and expectations.
The Board ensures that responsible investment is practised by Resilient to promote good governance and the creation of value by the companies in which it invests
Resilient ensures, through active participation and representation, that it exercises its rights and obligations with regard to its investee companies.