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GOVERNANCE > King III Principles

KING III
Principles

Every year we consider the 75 corporate principles of King III. We have provided an update below of our actions in terms of the principles we listed in 2016 as not yet fully applied by Taste. A comprehensive assessment of all of the 75 principles can be found on our website under the governance section.

Area

Requirements

Status

Comments

1. Ethical leadership and corporate citizenship

1.1

Requirements: The board should provide effective leadership based on an ethical foundation

Status: Applied

Comments: The board operates in accordance with a clearly defined board charter that defines all aspects of effective and ethical leadership.

1.2

Requirements: The board should ensure that the company is and is seen to be a responsible corporate citizen

Status: Applied

Comments: Company is required to operate in accordance with approved code of ethics.

1.3

Requirements: The board should ensure that the company's ethics are managed effectively.

Status: Applied

Comments: Included under the ambit of the Social, Ethics & Transformation committee. Will be considered annually in terms of committee's annual work plan.

2. Boards and directors

2.1

Requirements: The board should act as the focal point for and custodian of corporate governance

Status: Applied

Comments: Principles of good corporate governance are addressed in the board charter. The board meets at least quarterly and corporate governance forms a standard agenda item in terms of the annual work plan. The board provides a comprehensive corporate governance report to stake holders in their integrated report, annually.

2.2

Requirements: The board should appreciate that strategy, risk, performance and sustainability are inseparable

Status: Applied

Comments: The company's strategy is approved by the board annually. The strategy also takes cognisance of inherent risks and the need to achieve sustainable outcomes.

2.3

Requirements: The board should provide effective leadership based on an ethical foundation

Status: Applied

Comments: Addressed in Board Charter

2.4

Requirements: The board should ensure that the company is and is seen to be a responsible corporate citizen

Status: Applied

Comments: Included under the ambit of the Social, Ethics & Transformation committee.

2.5

Requirements: The board should ensure that the company’s ethics are managed effectively

Status: Partially Applied

Comments: Code of Ethics of company will be annually reviewed and approved by Social & Ethics Committee

2.6

Requirements: The board should ensure that the company has an effective and independent audit committee

Status: Applied

Comments: All members of the committee are independent non-executive directors.

2.7

Requirements: The board should be responsible for the governance of risk

Status: Applied

Comments: Assisted by the Audit & risk committee

2.8

Requirements: The board should be responsible for information technology (IT) governance

Status: Explain

Comments: This is included under ambit of Audit & Risk committee and will be addressed in terms of annual work plan.

2.9

Requirements: The board should ensure that the company complies with applicable laws and considers adherence to non-binding rules, codes and standards

Status: Applied

Comments: Company Secretary and Company lawyer keep the board updated

2.10

Requirements: The board should ensure that there is an effective risk- based internal audit

Status: Explain

Comments: Internal audit function for the whole group remains under review of the executive committee and the board

2.11

Requirements: The board should appreciate that stakeholders' perceptions affect the company's reputation

Status: Applied

 

2.12

Requirements: The board should ensure the integrity of the company's integrated report

Status: Applied

Comments: The board approves the integrated report upon recommendation of the audit committee

2.13

Requirements: The board should report on the effectiveness of the company's system of internal controls

Status: Applied

 

2.14

Requirements: The board and its directors should act in the best interests of the company

Status: Applied

 

2.15

Requirements: The board should consider business rescue proceedings or other turnaround mechanisms as soon as the company is financially distressed as defined in the Act

Status: Not applicable

 

2.16

Requirements: The board should elect a chairman of the board who is an independent non-executive director. The CEO of the company should not also fulfill the role of chairman of the board.

Status: Applied

 

2.17

Requirements: The board should appoint the chief executive officer and establish a framework for the delegation of authority

Status: Partially applied

Comments: The board has appointed the CEO. A delegation of authority framework has been practically implemented, but needs to be formalized into a formal document for approval by the board.

2.18 Composition of the board

Requirements: The board should comprise a balance of power, with a majority of non-executive directors. The majority of non-executive directors should be independent

Status: Applied

Comments: Three executive directors and seven non-executive directors of which five are independent.

2.19 Board appointment process

Requirements: Directors should be appointed through a formal process

Status: Applied

Comments: Formal policy in place

2.20 Director development

Requirements: The induction of and ongoing training and development of directors should be conducted through formal processes

Status: Explained

Comments: An induction process exists for executive directors but not a formal development program. Legislative changes are briefed to the Board by the Company Secretary. Our board charter encourages our directors to seek Independent advice funded by Taste Holdings.

2.21 Company secretary

Requirements: The board should be assisted by a competent, suitably qualified and experienced company secretary

Status: Applied

Comments: The company consists over relevant qualification an experience to discharge duties

2.22 Performance assessment

Requirements: The evaluation of the board, its committees and the individual directors should be performed every year

Status: Explained

Comments: The board and board committees were assessed.

2.23 Board committees

Requirements: The board should delegate certain functions to well- structured committees but without abdicating its own responsibilities

Status: Applied

Comments: Implemented accordingly

2.24 Group boards

Requirements: A governance framework should be agreed between the group and its subsidiary boards

Status: Applied

Comments: All subsidiaries are wholly owned – adequately dealt with in board charter.

2.25 Remuneration of directors and senior executives

Requirements: Companies should remunerate directors and executives fairly and responsibly

Status: Applied

Comments: Annual retainer for board members and per committee meeting. Full disclosure in annual/integrated report

2.26

Requirements: Companies should disclose the remuneration of each individual director and certain senior executives

Status: Applied

Comments: Non-executive and executive directors' emoluments are disclosed in annual integrated report

2.27

Requirements: Shareholders should approve the company's remuneration policy

Status: Applied

Comments: Approved by way of ordinary resolution at last AGM.

3. Audit committees

3.1 Membership and resources of the audit committee

Requirements: The board should ensure that the company has an effective and independent audit committee

Status: Applied

 

3.2

Requirements: Audit committee members should be suitably skilled and experienced independent non-executive directors

Status: Applied

Comments: All members are independent non- executive members. Committee collectively has sufficient skills to discharge its responsibility efficiently

3.3

Requirements: The audit committee should be chaired by an independent non-executive director

Status: Applied

 

3.4 Responsibilities of the audit committee

Requirements: The audit committee should oversee integrated reporting

Status: Applied

Comments:

3.5

Requirements: The audit committee should ensure that a combined assurance model is applied to provide a coordinated approach to all assurance activities

Status: Applied

Comments: The terms and reference of the committee requires the committee to ensure that a combined assurance model is implemented

3.6 Internal assurance providers

Requirements: The audit committee should satisfy itself of the expertise, resources and experience of the company's finance function

Status: Applied

Comments: Done annually in terms of committee's work plan

3.7

Requirements: The audit committee should be responsible for overseeing of internal audit

Status: Explain

Comments: Internal audit function for the whole group remains under review of the executive committee and the board

3.8

Requirements: The audit committee should be an integral component of the risk management process

Status: Applied

Comments: Risk management is included in the annual work plan of the audit & risk committee

3.84(a)

Requirements: There must be a policy detailing the procedures for the appointment to the board.

Appointments must be formal and transparent and a matter for the board as a whole, assisted where appropriate by a nominations committee.

If a nominations committee is appointed, such committee must only constitute non-executive directors and the majority must be independent. The committee must be chaired by the chairman of the board.

Status: Applied

Comments: Our directors are appointed by means of a transparent and formal procedure, governed by the mandate and terms of reference of the remuneration and nominations committees and the board charter. The board adheres to a formal board policy in this regard.

The nominations committee responsibilities include setting the criteria for board nominations, identifying, evaluating and recommending to the board suitable candidates for appointment to the board, as well as succession planning.

The members of the remuneration and nominations committees are all independent non-executive directors and the nominations committee is chaired by the chairman of the board.

3.84(b)

Requirements: There must be a policy evidencing a clear balance of power and authority at board level to ensure that no one director has unfettered powers.

Status: Applied

Comments: Our board charter demonstrates that there is a clear balance of power and authority at board level and that no one director has unfettered powers. Decisions, if not unanimous, are taken by a simple majority with one vote per director. The chairman does not have a casting vote.

3.84(c)

Requirements: Issuers must have a CEO and a chairman and these positions must not be held by the same person.

The chairman must either be an independent director or the issuer must appoint a lead independent director as defined in the King Code.

Status: Applied

Comments: The CEO and chairman positions in Taste are held by different people and the chairman is an independent non-executive director. This principle is documented in the board charter.

3.84(d)

Requirements: Issuers must appoint an audit committee in compliance with the King Code.

Status: Applied

Comments: Taste has a combined audit and risk committee. Its membership is set out on page 82 of this integrated annual report. The committee currently has three members all of whom are independent non-executive directors, as set out in the King Code.

Requirements: Issuers must appoint a remuneration committee in compliance with the King Code.

Status: Applied

Comments: The board has appointed a remuneration committee, which has three members all of whom are independent non-executive directors.

Requirements: Where appropriate, issuers must appoint a risk and nominations committee.

Status: Applied

Comments: The company does not have separate risk. Risk is combined into the audit and risk committee. The board has appointed a nominations committee which is chaired by the chairman of the board.

Requirements: The composition of such committees, a brief description of their mandates, the number of meetings held and any other relevant information must be disclosed in the annual report.

Status: Applied

Comments: Brief descriptions of the mandates of these committees and the number of meetings held during the year are available on pages 81 to 86 of this integrated annual report.

3.84(e)

Requirements: Brief CV of each director standing for election or re-election must accompany relevant notice of meeting.

Status: Applied

Comments: Information appears on pages 76 to 78 of this integrated annual report.

3.84(f)

Requirements: Capacity of directors in relation to executive, non-executive and independent must be categorised and disclosed in the relevant documentation.

Status: Applied

Comments: This information is also contained in the curriculum vitaes mentioned in 3.84(e). The composition of our committees is in accordance with the requirements of the Companies Act and the King Code.

3.84(g)

Requirements: Issuers must have a full-time executive financial director.

Status: Applied

Comments: Taste Holdings has a full-time Chief Financial Officer who does not hold any other position nor does he have any other commitments that could be considered as full- or part-time employment.

3.84(h)

Requirements: The audit committee must consider, on an annual basis, and satisfy itself of the appropriateness of the expertise and experience of the financial director and report thereon in the annual report.

Status: Applied

Comments: Our audit and risk committee annually considers and satisfies itself of the appropriateness of the expertise and experience of the Chief Financial Officer and has reported on its findings in its audit and risk committee report on page 99 of our annual financial statements.

3.84(i)

Requirements: The provision deals with the competence, qualifications and experience of the company secretary and the board of directors’ responsibility in relation thereto.

Status: Applied

Comments: We refer you to page 87 of this integrated annual report where the company secretary’s competence, qualifications and experience are set out, as are the board’s assessment of her abilities to carry out her responsibilities.

3.84(j)

Requirements: The provision deals with the arm’s length relationship between the board of directors and the company secretary and the board of directors’ responsibility in relation thereto.

Status: Applied

Comments: We would also refer you to page 87 of this integrated annual report where it is stated that the company secretary maintains an arm’s length relationship with the executive team, the board and the individual directors.

3.9 External assurance providers

Requirements: The audit committee is responsible for recommending the appointment of the external auditor and overseeing the external audit process

Status: Applied

Comments:

3.10 Reporting

Requirements: The audit committee should report to the board and shareholders on how it has discharged its duties

Status: Applied

Comments: Audit committee gives feedback to board in terms of standard agenda item of Board.

4. The governance of risk

4.1 Management’s responsibility for risk management

Requirements: The board should determine the levels of risk tolerance

Status: Explain

Comments: Included under Audit & Risk Committee work plan

4.2

Requirements: The risk committee or audit committee should assist the board in carrying out its risk responsibilities

Status: Applied

Comments: Falls within ambit of Audit& Risk Committee's terms and reference

4.3

Requirements: The board should delegate to management the responsibility to design, implement and monitor the risk management plan

Status: Applied

Comments: Monitored by Audit & Risk committee

4.4 Risk assessment

Requirements: The board should ensure that risk assessments are performed on a continual basis

Status: Applied

Comments: Terms and reference of the Audit & Risk committee requires that risk assessments are performed regularly

4.5

Requirements: The board should ensure that frameworks and methodologies are implemented to increase the probability of anticipating unpredictable risks

Status: Partially Applied

Comments: Covered in risk register and monitored by the audit & risk committee

4.6 Risk response

Requirements: The board should ensure that management considers and implements appropriate risk responses

Status: Applied

Comments: Covered in risk register

4.7 Risk monitoring

Requirements: The board should ensure continual risk monitoring by management

Status: Applied

Comments: Formal risk register is reviewed at each board meeting.

4.8 Risk assurance

Requirements: The board should receive assurance regarding the effectiveness of the risk management process

Status: Explain

Comments: The Audit & Risk committee reviews the risk management processes and reports to the board at each board meeting.

4.9 Risk disclosure

Requirements: The board should ensure that there are processes in place enabling complete, timely, relevant, accurate and accessible risk disclosure to stakeholders

Status: Applied

Comments: The Audit & Risk committee is required to disclose in the integrated annual report any undue, unexpected or unusual risks and the committee's view on the effectiveness of the risk

5. The governance of information technology

5.1

Requirements: The board should be responsible for information technology (IT) governance

Status: Applied

Comments: Falls within ambit of Audit & Risk committee’s terms and reference

5.2

Requirements: IT should be aligned with the performance and sustainability objectives of the company

Status: Applied

 

5.3

Requirements: The board should delegate to management the responsibility for the implementation of an IT governance framework

Status: Applied

Comments: Management reports to chairman of the Audit & Risk committee directly on this matter

5.4

Requirements: The board should monitor and evaluate significant IT investments and expenditure

Status: Applied

 

5.5

Requirements: IT should form an integral part of the company's risk Management

Status: Applied

Comments: Included under ambit of the Audit & Risk committee's terms and reference

5.6

Requirements: The board should ensure that information assets are managed effectively

Status: Applied

Comments: This is included under ambit of Audit & Risk committee and will be addressed in terms of annual work plan.

5.7

Requirements: A risk committee and audit committee should assist the board in carrying out its IT responsibilities

Status: Applied

 

6. Compliance with laws, rules, codes and standards

6.1

Requirements: The board should ensure that the company complies with applicable laws and considers adherence to non-binding rules codes and standards

Status: Applied

Comments: Included under ambit of the Audit & Risk committee's terms and reference

6.2

Requirements: 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

Status: Applied

Comments: The directors to the board are all suitably skilled individuals with sufficient experience regarding applicable laws, rules, and codes. In addition to this ongoing training updates are done from time to time.

6.3

Requirements: Compliance risk should form an integral part of the company's risk management process

Status: Applied

 

6.4

Requirements: The board should delegate to management the implementation of an effective compliance framework and processes

Status: Explain

Comments: Although practically implemented it is not documented in a formal document.

7. Internal audit

7.1 The need for and role of internal audit Internal audit’s approach and plan

Requirements: The board should ensure that there is an effective risk based internal audit

Status: Explain

Comments: The internal audit function for the whole group remains under review by the executive committee and the board.

7.2

Requirements: Internal audit should follow a risk based approach to its plan

Status: Explain

Comments: The internal audit function for the whole group remains under review by the executive committee and the board.

7.3

Requirements: Internal audit should provide a written assessment of the effectiveness of the company's system of internal controls and risk management

Status: Explain

Comments: The internal audit function for the whole group remains under review by the executive committee and the board.

7.4

Requirements: The audit committee should be responsible for overseeing internal audit

Status: Explain

Comments: The internal audit function for the whole group remains under review by the executive committee and the board.

7.5 Internal audit’s status in the company

Requirements: Internal audit should be strategically positioned to achieve its objectives

Status: Explain

Comments: The internal audit function for the whole group remains under review by the executive committee and the board.

8. Governing stakeholder relationships

8.1

Requirements: The board should appreciate that stakeholders' perceptions affect a company's reputation

Status: Applied

 

8.2

Requirements: The board should delegate to management to proactively deal with stakeholder relationships

Status: Applied

Comments: Both the CEO and Financial Director make themselves available for telephonic and in-person interactions with stakeholders and the CEO makes himself available to various media and press to ensure that the broader public have the companies point-of-view on matters.

8.3

Requirements: The board should strive to achieve the appropriate balance between its various stakeholder groupings, in the best interests of the company

Status: Applied

 

8.4

Requirements: Companies should ensure the equitable treatment of shareholders

Status: Applied

 

8.5

Requirements: Transparent and effective communication with stakeholders is essential for building and maintaining their trust and confidence

Status: Applied

 

8.6 Dispute resolution

Requirements: The board should ensure that disputes are resolved as effectively, efficiently and expeditiously as possible

Status: Applied

 

9. Integrated reporting and disclosure

9.1 Transparency and accountability

Requirements: The board should ensure the integrity of the company's integrated report

Status: Applied

Comments: Board approves integrated report on recommendation of Audit & Risk committee

9.2

Requirements: Sustainability reporting and disclosure should be integrated with the company's financial reporting

Status: Applied

Comments: Done

9.3

Requirements: Sustainability reporting and disclosure should be independently assured

Status: Explained

Comments: This will be considered once integrated reporting has reached a mature state.

 

 

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