Sustainability

Governance

Governance

Edcon is committed to a transparent governance process that provides stakeholders with a high degree of confidence that the Group is being managed ethically, within prudent risk parameters and in compliance with legal and regulatory requirements as well as international best practice. The board considers sound corporate governance as pivotal to delivering responsible and sustainable growth in the interests of all stakeholders. While the board is satisfied with its level of compliance with applicable governance and regulatory requirements, it recognizes that its practices can be improved and accordingly continues to review the Group’s governance framework against best practice and changing regulation.

Edcon has a unitary board structure comprising 11 directors: three executive directors and eight non-executive directors, four of whom are independent. Although half of our non-executive directors are not independent, as recommended by King III, as they represent the majority shareholder, the board is satisfied that the balance of power and objectivity of the board is sufficient. In line with best practice, the roles of chairman and chief executive officer are separate.

Governance structure

The board of directors focuses on the key elements of the corporate governance processes underpinning our operation. More specifically its role includes:

  • Considers and adopts if appropriate, operating budgets and business plans proposed by management for achievement of the Group’s strategic direction;
  • Delegates authority for capital expenditure and evaluates investment, capital, and funding proposals reserved for board approval;
  • Provide oversight of performance against targets and objectives;
  • Provides oversight of reporting on our direction, corporate governance and performance;
  • Ensures ethical behaviour and compliance with relevant laws and regulations, audit and accounting principles and our internal governing documents and codes of conduct;
  • Acts responsibly towards Edcon’s relevant stakeholders;/LI>
  • Committed to the underlying principles of good corporate governance and ensure that compliance with corporate governance principles is reviewed regularly; and
  • Ensures adequate systems of internal control.

The board is responsible for our systems of financial and operational internal control and the executive directors are relied on to ensure that management continues to maintain accounting records and systems of internal control that are appropriate to the achievement of our business strategies.

The chairman, Keith Warburton, is not considered independent as he represents the majority shareholder. Although the chairman cannot be classified as independent in terms of governance best practice criteria, the board is of the view that the chairman brings valuable expertise, experience and skill to the board.

The audit and risk committee evaluates any risk deemed necessary for discussion and evaluation by all directors, under board approved written terms of reference. The chairman of the audit and risk committee reports on the progress of how key risk issues are being addressed to the board while a risk profile is tabled annually at a board meeting. The board supports the following risk management plan structure that management has developed and maintains on an ongoing basis:

Risk Management