Governance

The board of directors recognises that corporate governance is essential to protect the interests of all stakeholders. Business is conducted in accordance with the principles of openness, integrity and accountability, as advocated in the Code of Corporate Practices and Conduct, contained in the 2002 King Report on Corporate Governance for South Africa (The King Report). The board is committed to maintaining high standards of corporate governance, and implementing corporate governance principles, policies and practices within each operation of the Group which will deliver value to all stakeholders.

The board acknowledges its responsibility to ensure that the principles of good governance are observed, and that the directors collectively and individually acknowledge their responsibilities and duties in terms of the JSE Limited Listings Requirements and other relevant legislation.

The corporate governance report included in the annual financial report describes the board’s approach to corporate governance, and outlines the key principles and governance practices of the Omnia Group.

The board constantly reviews the Group’s organisational structures and corporate governance procedures and will make recommendations where necessary, in order to ensure continuous improved compliance with good corporate governance practices. Through this process, all stakeholders can be assured that the Group is being managed according to prudently determined risk parameters, in compliance with generally accepted corporate practices. Monitoring the Group’s compliance with the King Report forms part of the Group audit committee’s mandate.

STATEMENT OF COMPLIANCE

The JSE Limited Listings Requirements require that JSE-listed companies report on the extent to which they comply with the principles set out in the King Report. The board is of the opinion that the Group complies substantially with the King Report and the JSE Limited Listings Requirements, except in the following aspect:

• The chairmen of the risk and remuneration committees are not independent non-executive directors. Mr Neville Crosse, non-executive chairman, and Mr Rod Humphris, Group managing director, chair the remuneration and risk committees respectively.

The board is satisfied that due to the character and judgment of Messrs Crosse and Humphris, the appointments do not impair the governance integrity.

THE BOARD OF DIRECTORS

Omnia Holdings Limited has a unitary board structure, comprising a majority of non-executive directors independent of management.

The board as a whole selects and appoints directors to the board of the company. A formal and transparent procedure applies to all appointments which are confirmed by shareholders at the Annual General Meeting. Prior to any appointment, potential board appointees are subject to a fit and proper test, as required by the listings requirements of the JSE Limited.

To ensure that there is a defined division of responsibilities, the roles of the chairman and the managing director are formalized and clearly separate. The chairman and the managing director do, however, jointly provide leadership and guidance to the Group.

THE CHAIRMAN

The board appointed Mr Neville Crosse as non-executive chairman in 2000. The chairman is responsible for ensuring the integrity and effectiveness of governance practices. He is responsible for providing overall leadership to the board and for representing the board to the shareholders. The chairman’s particular areas of responsibility include strategic planning, relationships with principals, government and customers, corporate relations, top-level contact with regulatory bodies, and advice and guidance on local and overseas acquisitions.

Mr Crosse has been with the Omnia Group for more than 30 years. His energy, enthusiasm and thorough knowledge of the chemical industry have guided the Group to its current success. He held the position of chairman of the Chemical and Allied Industries Association of South Africa (CAIA), the organisation responsible for administering Responsible Care in South Africa.  He consults with and provides strategic input to the Group managing director on a regular basis.

THE MANAGING DIRECTOR

Mr Rod Humphris was appointed as Group managing director in 1999.  His employment contract is subject to six months’ notice by either party. He is accountable to the board, and is responsible for ensuring the implementation of policies and strategies adopted by the board. In addition, he is responsible for developing and recommending to the board a long-term strategy and vision for the Group that will generate stakeholder value, as well as developing and recommending to the board annual business plans and budgets that support the Group’s long-term strategy.

EXECUTIVE AND NON-EXECUTIVE DIRECTORS

Executive directors are responsible for ensuring that the operational decisions and strategies of the board are implemented.

Non-executive directors complement the skills of the executive directors, bringing a diversity of experience, insight and independent judgement on issues of strategy, performance, resources and standards of conduct, They are individuals of high caliber and integrity and provide in-depth wisdom based on knowledge and experience. The independent directors ensure that no individual director has unfettered powers of decision-making.

THE BOARD CHARTER

The board has adopted a charter defining its responsibilities.

In order to uphold their integrity and independence, directors are required on a regular basis to declare interests in other boards and contracts, which are recorded and updated. Board members are required to recuse themselves when participating in deliberations or decision-making processes that could in any way be affected by a conflict of interest.

The board defines levels of materiality, reserving specific powers and delegating other matters with the necessary authority to management. The board has adopted a formal resolution framework that serves as an authority matrix guideline.

Notwithstanding the mandate given to the audit and risk committees, the board is ultimately accountable and responsible for the performance and affairs of the Group. Delegating authority to board committees or management does not in any way mitigate or discharge the board and its directors of their duties and responsibilities.

SELECTION AND APPOINTMENT

In accordance with the Articles of Association, a third of the directors are subject to retirement by rotation and, if eligible, reelection by shareholders each year. The curriculum vitae of directors standing for re-election are contained in the annual report and are submitted at the Annual General Meeting.

Non-executive directors have no service contracts with the company and are appointed for specific terms. The appointment of directors is a matter that is dealt with by the board. Directors are invited to assist in the identification and the nomination of potential candidates. New appointments to the board are ratified at the following Annual General Meeting in accordance with the Articles of Association.

INDUCTION AND DEVELOPMENT

Newly appointed directors undergo an induction programme tailored to meet the specific requirements of all new directors.  The company secretary assists the chairman with the induction and orientation of directors. The directors are provided with all the necessary documentation to familiarise them with issues affecting the board.

The company is committed to the continuing development of directors in order that they may build on their expertise and develop a more detailed understanding of the business and the markets in which the company operates.  In addition, individual directors may, after consulting with the chairman and managing director, seek external independent professional advice on matters concerning the affairs of the Group, and in connection with the discharge of the responsibilities as directors, at the expense of the Group.

BOARD COMMITTEES

The board is assisted in properly discharging its duties by mandated board committees.
Each standing board committee has written terms of reference that are reviewed and updated regularly. Committee chairmen report on the proceedings of their committees at the next meeting of the board. Minutes of board committee meetings are provided to the board for comment and noting.

The chairman of each board committee is required to attend the Annual General Meeting to answer questions raised by shareholders.

THE COMPANY SECRETARY

The company secretary is responsible for providing guidance to the directors, individually and collectively, on the discharge of their duties to the company in terms of the legislative, regulatory and governance requirements.

The company secretary plays a pivotal role in the company’s corporate governance process and ensures that in accordance with the pertinent laws, the proceedings and affairs of the directorate, the company itself and, where appropriate, shareowners are properly administered.  The company secretary acts as the compliance officer and delegated information officer of the Group, and is responsible for the execution of statutory requirements applicable to those positions.

The directors have unlimited access to the advice and services of the company secretary.