AFRICAN COMPASS INTERNATIONAL

(“ACI/the company”)

BOARD CHARTER

1 COMPOSITION OF THE BOARD

The company subscribes to a unitary board, consisting of non-executive and executive directors, which both leads and controls the company.

The board will preferably consist of a majority of non-executive directors, but as a minimum will consist of a balance of non-executive directors and executive directors. A majority of the non-executive directors will be independent, as defined in the King Report on Corporate Governance for South Africa – 2002 (“King II”).

The chair of the board shall not be an executive director and shall preferably be independent and representative of all shareholders. He shall not be a member of the Audit and Risk Committee.

The composition of the board shall reflect the need to protect the interests of all the company’s shareowners, as well as the demographics of the country.

2 MEMBERSHIP

Appointments to the board shall be dealt with by the board as a whole.

In order to qualify as a board member, proposed candidates should have adequate strategic, analytical, communication and knowledge competencies. In general, he/she should:

  • have the ability to make informed decisions;
  • be entrepreneurial;
  • be able to appreciate the wider business picture and perspective;
  • have integrity in personal and business dealings; and
  • be objective at all times about what is in the best interest of the company.

3 SIZE OF THE BOARD

The board membership shall be large enough to ensure a wide range of skills, knowledge, views and experience to achieve the balance necessary to meet its strategic objectives.

The board shall regularly consider whether its size, diversity and demographics make it effective.

4 PERIOD OF OFFICE

New directors shall only hold office until the next meeting at which they will retire and become available for re-election. Non-executive directors shall be subject to retirement by rotation and re-election by shareowners at least every three years. Only executive directors shall be engaged by means of service/employment contracts. Termination of service/employment contracts of executive directors shall automatically include their resignation from the board.

Any non-executive director is at liberty to accept other board appointments provided such appointment is not in conflict with the business of the company and shall not detrimentally affect the director’s contribution. Directors are therefore requested to carefully consider the number of appointments they take in this capacity. Executive directors may not accept other board appointments outside the company without approval from the board.

Retirement age for a non-executive director is 65 years of age, unless otherwise agreed by the board.

5 ROLES AND RESPONSIBILITIES OF THE BOARD

The board accepts that it is ultimately accountable and responsible for the affairs of the company. To this end, the board shall:

  • retain full and effective control of the company;
  • give strategic direction to the company;
  • monitor management in implementing plans and strategies as approved by the board;
  • appoint the chief executive officer;
  • ensure that succession is planned;
  • identify and regularly monitor key risk areas and key performance indicators of the business;
  • ensure that the company complies with relevant laws, regulations and codes of business practice;
  • ensure that the company communicates with shareowners and relevant stakeholders openly and promptly;
  • identify and monitor relevant non-financial matters;
  • establish a formal and transparent procedure for appointment to the board, as well as a formal orientation programme for incoming directors;
  • regularly review processes and procedures to ensure effectiveness of internal systems of control and accept responsibility for the total process of risk management; and
  • assess the performance of the board, its committees and its individual members on a regular basis.

6 BOARD PROCEDURES

The conduct of directors shall be consistent with their accountability to the company and responsibility to all stakeholders.

The board shall be disciplined in carrying out its role, with the emphasis on strategic issues and policy.

The board’s discussions shall at all times be open and constructive. The chair shall seek a consensus in the board but may, where considered necessary, call for a vote in whatever manner the chair, in his sole discretion, decides. Discussions and records shall remain confidential unless with specific direction from the board to the contrary.

The board has sole authority over its agenda. However, any director may request the addition of an item on the agenda. The agenda shall be exercised through the chair.

The directors are entitled to have access, at reasonable times, to all relevant company information and to management. Professional advice shall only be taken as per the approved procedure.

The directors are expected to strictly observe the restrictions to the use and the confidentiality of company information.

At each directors’ meeting, the board shall consider:

  • a report on the management of the affairs of the company;
  • A financial report, including forecasts for the remainder of the financial year;
  • specific proposals for capital expenditure and proposed transactions; and
  • major issues and opportunities for board consideration.At intervals of not more than one year, the board shall:
  • review the company’s goals;
  • review the strategies for achieving the company’s goals;
  • approve the annual budget;
  • approve the annual and half-yearly financial statements, reports to shareowners;
  • approve the directors’ statutory report to be published in the annual report;
  • review the performance of, necessity for, and composition of board committees;
  • review the board’s performance, composition, structure and succession;
  • review the directors’ remuneration;
  • review the chairman’s remuneration;
  • review remuneration policies and practices in general, including superannuation and incentive schemes for management (if in place);
  • review risk assessment policies and controls, including compliance with legal and regulatory requirements;
  • review the company’s code of business conduct and ethical standards;
  • review shareowner and client relations;
  • review donations and sponsorships;
  • review the company’s and the board’s corporate governance performance in general; and
  • settle the following year’s work plan.

7 COMMITTEES

The board is authorised to form committees to assist it in the execution of its duties, powers and authorities.

The board has a standing committee, namely the audit and risk committee. Should the company employ full time employees in an executive capacity, the establishment of a remuneration and nominations committee will also be considered.

Each committee will have formal terms of reference as approved by the board.

8 MATTERS RESERVED FOR BOARD DECISION

The following matters shall be reserved for decision by the board, on the basis of any recommendation as may be made from time to time by the committees of the board:

Financial :

  • the adoption of any significant change or departure in the accounting policies and practices of the company;
  • the raising of incremental borrowing facilities involving amounts in excess of the amounts as included in the approved budget;
  • the approval of the strategy, business plans and annual budgets and of any subsequent material changes in strategic direction or material deviations in business plans;
  • the approval of the annual financial statements, the approval of the interim report, the valuation of investments; and
  • the recommendation to shareowners of any increase, reduction or alteration to the share capital of the company and the allotment, issue or other disposal of shares of the company (except for shares allotted under any share incentive scheme).

 Statutory and Administrative:

  • recommending amendments to the Memorandum or Articles of the company;
  • the appointment, removal or replacement of the external auditor of the company;
  • the frequency of board meetings;
  • the convening of general meetings of shareowner of the company;
  • the prosecution, defence or settlement of legal or arbitration proceedings where material, and except in the ordinary course of business;
  • the appointment of responsible persons as may be required in terms of any Act in South Africa or elsewhere in respect of the company;
  • the granting of general signing authorities pursuant to the Articles of the company;
  • the appointment, removal or replacement of the company secretary;
  • the variation of the rights attaching to shares where such powers are vested in the directors; and
  • the formulation and amendment of the company’s Code of Business Conduct and Ethics.

    Regulatory:

  • the approval of terms and conditions of the company’s rights issues, public offers, capital issues or issues of convertible securities including share or convertible securities issued for acquisitions;

  • the approval and authority to issue circulars to shareowners;

  • the approval of and authority to issue prospectuses, listing particulars, rights offers or takeover or merger documents;

  • recommending to shareowners that they approve any ordinary or special resolutions in respect of the company;

  • recommending that the shareowners take a particular course of action proposed by the company; and

  • any decision to list the company’s shares on any stock exchange or to terminate any such listing.

    Human Resources (as and when applicable):

  • appointments to and removals from the board including the appointment of the chair, any deputy chair, chief executive officer, executive directors and non-executive directors, and the approval of nominations of alternate directors (if any);
  • the appointment, terms of reference and changes in the composition of the remuneration and nominations committee and the audit and risk management committee;
  • any increase of directors’ fees;
  • the approval of any share incentive or general bonus scheme, the rules applicable to any such scheme and any amendment to such rules as recommended by the human resources and nominations committee, for submission to shareowners, if applicable; and
  • the formulation of recommended policies in relation to equal opportunity employment, black empowerment, environment, health, safety and AIDS.

9 BOARD’S RELATIONSHIP WITH SHAREOWNERS
The board shall endeavour to familiarise itself with issues of concern to shareowners.
The board shall evaluate economic, political, social and legal issues on a regular basis, as well as any other relevant external
matters that may influence or affect the development of the business or the interests of the shareowners and, if appropriate,
obtain outside expert advice.
10 MANAGEMENT OF RISK
The board accepts its responsibility for the total process of risk management in the company.
An effective, ongoing process shall be in place to identify risks, measure their impact and proactively manage these. Formal risk assessments shall be undertaken as and when required. The audit and risk committee shall be responsible to assist the board in reviewing the risk management process.
11 REMUNERATION
The remuneration of the non-executive directors shall from time to time be approved by the company in general meeting on recommendation from the board.

No additional fees shall be paid to executive directors as directors other than in accordance with their specific service/employment contracts.

12 MEETINGS – FREQUENCY / QUORUM AND BOARD ATTENDANCES

Meetings of the board shall be held at such time and at such venue virtual or other as the board deems appropriate, but it shall normally meet at least four times a year or at the call of the chair of the board.

The quorum necessary for the transaction of business of the directors shall be as determined by the Articles of Incorporation.

Directors shall use their best endeavours to attend board meetings and to prepare thoroughly. Directors are expected to participate fully, frankly and constructively in board discussions and other activities and to bring the benefit of their particular knowledge, skills and abilities to the board table. Directors who are unable to attend shall advise the chair at an earlier date and confirm this in writing to the company secretary.

13 PROCEEDINGS OF MEETINGS

Unless varied by these terms of reference, meetings and proceedings of the board shall be governed by the company’s Articles.

Except under exceptional circumstances, at least five days’ notice shall be given of a meeting of the board. Such notice shall, where possible, include the agenda and any supporting papers.

Minutes of meetings shall be taken by the company secretary and shall be circulated to all members of the board.

14 PROFESSIONAL OR BUSINESS SERVICES PROVIDED BY DIRECTORS

Non-executive directors should, as a general rule, not provide any such services of an ongoing nature to the company.

The company may, for the purpose of a special assignment, engage the services of a non-executive director (specific field of expertise).

The terms of the engagement must be competitive, clearly recorded and all legal requirements with regards to disclosure must be complied with.

15 BOARD EVALUATIONS

An induction programme aimed at the understanding of the company, the business, the environment and market in which the company operates shall be conducted for all newly appointed directors.

Directors shall receive essential board and company information.

Directors shall keep themselves abreast of changes and trends in the business and company’s environment and markets.

Directors shall also keep abreast of changes and trends in the economic, political, social and legal climate in general.

A formal board evaluation process shall be followed at a regular interval.

16 DECLARATION OF INTERESTS

Directors shall at all times observe the legal requirements in respect of the declaration of interests and do everything reasonably possible to avoid a conflict of interest in the execution of their duties and responsibilities to the company.

Any possible conflict of interest shall at all times be dealt with in terms of the provisions of the relevant board policy and shall be declared up front. The director concerned shall not participate in a discussion, or vote, on the subject matter.

17 DISCLOSURE OF INFORMATION

Directors agree to at all times abide by the provisions of the board policy on the disclosure of information and acknowledge that they have read and understood the provisions thereof.

18 GENERAL

The board, in carrying out its tasks under these terms of reference, may obtain such outside or other independent professional advice, as it considers necessary to carry out its duties.

These terms of reference may from time to time be amended by the board, as and when required.

INITIAL ADOPTION: November 2008

AMENDED: January 2010

REVISED: December 2015

READOPTED: January 2017