Both boards have the same directors, chairman and executive director as chief executive.
The Sanlam and Sanlam Life Board meetings are combined and held concurrently, thereby removing one layer of discussions in the decision-making process. This promotes the productivity and efficiency of the two boards, reduces effort and optimises the flow of information.
The Board’s agenda is centred largely on Group strategy, the execution of capital management, accounting policies, financial results and dividend policy, human resource development, JSE Listings Requirements and corporate governance throughout the Group. The Board is responsible for overseeing the relationship with key stakeholders of the Group.
The Board has the following committees:
PB Hanratty (chairman) (1 December 2017), AD Botha (2 March 2017) and KT Nondumo (1 January 2016).
Group Chief Executive, Financial Director, Chief Actuary, Chief Audit Executive, the heads of business clusters (as required), heads of control functions, as well as expert invitees: CG Swanepoel, JP Möller, D Ladds and AP Zeeman.
This committee is chaired by and comprises only independent non-executive directors. In accordance with the requirements of the Companies Act, individual members of the committee are appointed annually by the shareholders at the AGM for the ensuing financial year. The committee consists of three members with financial, actuarial and other relevant areas of experience (as described in its charter). The external audit partners and other assurance providers attend committee meetings. This committee discharges all (statutory) Audit committee responsibilities in terms of the Companies Act on behalf of the majority of subsidiary companies within the Group.
The committee oversees the preparation of the resilience information provided in the Annual Reporting Suite. To review the assurances obtained regarding the resilience information, the chairman of the Audit committee is also a member of the Social, Ethics and Sustainability committee. Likewise, the chairman of this committee is invited to meetings of the Audit committee when the Resilience Report is addressed.
The following were the key focus areas during the reporting period:
The Audit committee has Board-approved formal terms of reference, and is satisfied that it has discharged its responsibilities as set out in these terms. The role of the Audit committee is to fulfil all functions as set out in the Companies Act, to assist the Board in fulfilling its responsibility regarding financial and auditing oversight, and to oversee their overall quality. It assists the Board with the effectiveness, design and implementation, and the nature and extent of any significant weaknesses in the design, implementation, or integrity of financial and actuarial reporting, and internal control matters that may result in material financial loss, fraud, corruption or error. The Audit committee evaluates the Group’s internal controls annually and has satisfied itself on the effectiveness of the design and implementation and that there were no material breakdowns in internal financial control systems during the year.
The Audit committee, after due consideration, recommends the Annual Reporting Suite to the Board for approval. It performs the prescribed statutory requirements, including those applicable to the external auditor. These include the annual recommendation of the external auditor to the shareholders at the AGM, agreement as to the scope of the audit and budgeted audit fees in the annual audit plan presentation, as well as the approval of the final audit fees.
As required by the Companies Act, the committee reviews the compliance of the external auditor with the non-audit services policy of the Group annually. The Audit committee ensures that a combined assurance model is applied to provide a coordinated approach to all assurance activities. The committee reviews and approves the internal audit charter, reviews the effectiveness of the internal audit structures, and considers the findings of the internal audit. The committee meets with the Chief Audit Executive independently of management.
In terms of the JSE Listings Requirements, the Audit committee performs an annual evaluation of Sanlam’s financial function. The committee executed this responsibility at its meeting in December 2017 and was satisfied that the financial function had appropriate resources, skills, expertise and experience. In December 2017 the committee confirmed that it was and is satisfied that HC Werth, the Financial Director of Sanlam, possesses the appropriate skills, expertise and experience to meet the responsibilities required for this position during his service. The committee reviewed and confirmed its satisfaction with the performance of the Chief Audit Executive. As part of Sanlam’s corporate governance practices, the interim financial results were reviewed by the external auditor.
The Board instituted a policy that governs the level and nature of non-audit services, which requires pre-approval by the Audit committee for all non-audit services. As required by the Companies Act, the committee has, after consideration of the level and types of non-audit services provided and other enquiries and representations, satisfied itself that Sanlam’s external auditor is independent of the Company and has recommended the re-appointment of Ernst & Young Inc. as external auditor for the 2018 financial year, with C du Toit as the designated individual registered auditor who will undertake the audit of Sanlam on behalf of Ernst & Young Inc. The committee is satisfied that the external auditor is independent of Sanlam in relation to significant changes in the management of Sanlam during the external auditor’s tenure, which may mitigate the attendant risk of familiarity between the external auditor and management.
The committee is satisfied that the external auditor has considered significant matters in relation to the Annual Financial Statements and how these were addressed by the committee.
Ernst & Young Inc., as the audit firm, and JC de Villiers, Sanlam’s individual auditor for 2017, have been accredited on the JSE list of auditors in terms of the criteria in the JSE Listings Requirements. The Audit committee’s charter is reviewed by the Board annually. The committee is satisfied it has discharged its legal, regulatory and other responsibilities.
The committee meets at least quarterly.
CG Swanepoel (chairman) (8 June 2011), PB Hanratty (3 April 2017), AD Botha (31 August 2017), HC Werth (1 October 2016) and KT Nondumo (1 January 2016).
Group Chief Executive, Group Chief Risk Officer, Head of Group Compliance, Chief Audit Executive, the heads of business clusters (as required), heads of control functions, and expert invitees JP Möller, D Ladds and AP Zeeman.
This committee is chaired by an independent non-executive director and comprises three other independent non-executive directors, as well as the Financial Director. In view of this committee’s Group-wide role, the external audit partners and other assurance providers attend the committee meetings.
The role of the Risk committee is to advise and assist the Board in fulfilling its responsibility with regard to overseeing the design and implementation of Sanlam’s Group risk assurance framework and responsibilities. The Risk committee assists the Board with, among others:
The committee evaluates risk areas, including:
The committee reviews the performance of Sanlam’s Chief Risk Officer, Head of Risk Management and the Head of Group Compliance annually. The committee’s charter is reviewed annually by the Board to ensure that it aligns with national and international corporate governance best practices. The Risk committee is satisfied with the effectiveness and performance of the Company’s risk management processes and the performance of the Chief Risk Officer, Head of Risk Management and Head of Group Compliance.
The committee meets quarterly.
An actuarial forum was established in November 2015 as an internal committee to assist the Audit and Risk committees in fulfilling their duties regarding actuarially related matters.
AD Botha (chairman) (7 June 2006), PT Motsepe (2 March 2004), KT Nondumo (6 December 2017), J van Zyl (1 March 2016) and MM Bakane-Tuoane (5 December 2007).
Group Chief Executive, Group Human Resources Executive and Financial Director.
This committee is responsible for monitoring and advising on the Group’s human intellectual capital and transformation processes regarding employees.
In particular, the committee approves executive appointments and reviews succession planning, which includes all Group Executive committee members, as well as the position of the Group Chief Executive.
The committee is responsible for the remuneration strategy of the Group, the approval of guidelines for incentive schemes, and the annual determination of remuneration packages for members of the Group Executive committee. The committee takes cognizance of local and international industry benchmarks, ensures that incentive schemes align with good business practice, and ensures excellent performance is rewarded. It makes recommendations to the Board regarding directors’ remuneration (except for the Human Resources and Remuneration committee).
In accordance with the King IV™ recommendations, the Company’s remuneration policy is tabled to shareholders for a non-binding advisory vote at its AGM. This vote enables the shareholders to express their views on the remuneration policies and their implementation. Sanlam supports the benefit of an advisory vote, which is to promote constructive dialogue between Sanlam and its shareholders, and which helps to ensure that directors pay attention to the elements of compensation that matter most to investors, such as linking performance and business strategy. At the 2017 AGM, shareholders endorsed the Company’s remuneration policy.
SA Nkosi (chairman) (5 September 2017), MM Bakane-Tuoane (1 December 2004), J van Zyl (1 March 2016), PT Motsepe (1 July 2006) and KT Nondumo (6 December 2017).
Group Chief Executive.
The committee is responsible for making recommendations to the Board on all new appointments to the Board and its committees. A formal process of reviewing the balance and effectiveness of the Board and its committees, and identifying the skills needed and the individuals to provide such skills in a fair and efficient manner, is required of the committee to ensure the Board and its committees remain effective and focused.
The process includes a regular review of the composition of the Board committees and assists the Chairman with the annual evaluation of Board performance. It is responsible for identifying appropriate Board candidates and evaluating them according to the specific disciplines and areas of expertise required.
The Board approves all interim appointments as final appointments are made by shareholders at the AGM.
The committee is chaired by the Chairman of the Board and meets at least four times a year.
Succession planning is a key focus area within the Group. The Nominations committee considers the composition of the Board and its committees on an ongoing basis. The Board is satisfied that the current talent pool available within the Group and the work being done to strengthen it, provides Sanlam with a pool of candidates that have the necessary skills and experience to fill any vacancies that may arise in the short and long term.
J van Zyl (chairman) (19 January 2016), MM Bakane-Tuoane (1 January 2004), AD Botha (8 March 2006), PB Hanratty (3 April 2017), MV Moosa (3 June 2004), PT Motsepe (1 April 2004), SA Nkosi (8 March 2006), KT Nondumo (4 December 2015), RV Simelane (1 April 2004), CG Swanepoel (28 March 2011) and PL Zim (8 March 2006).
This committee is responsible for the governance and functioning of the Board. The committee gives due consideration to the general requirements of the JSE and King IV™, and ensures that appropriate and balanced corporate governance practices and processes are entrenched within Sanlam. The committee oversees and gives due and careful consideration to the interests of Sanlam and its stakeholder groups objectively and independently.
The committee comprises all non-executive and independent directors. The committee meets subsequent to scheduled Board meetings.
MV Moosa (chairman) (5 September 2006), TI Mvusi (1 January 2010), PB Hanratty (5 December 2017), Y Ramiah (14 December 2012), RV Simelane (5 September 2006) and PL Zim (3 June 2009).
Group Chief Executive Officer, Group Human Resources Executive and heads of business clusters (as required).
The Social, Ethics and Sustainability committee is a committee established in terms of section 72 and Regulation 43 of the Companies Act.
The committee’s statutory functions are set out in the above mentioned regulation and are supplemented as set out in the committee charter, some of which will be elaborated on in this Report. The committee has the responsibility to recommend for approval, monitor and advise on all social, ethics and sustainability material and relevant issues that have a significant impact on the Group and its stakeholders. This committee also addresses transformation, safety, health and environmental matters. In respect of transformation, the committee recommends for approval, monitors and advises on matters pertaining to transformation and black economic empowerment throughout the Group.
With regard to safety, health and environmental issues, the committee’s main responsibility is to recommend for approval, monitor and advise on matters pertaining to such issues throughout the Group.
The committee reviews Sanlam’s social, ethics and sustainability strategy and structures annually. It monitors performance against specific preset targets and objectives. The committee considers Sanlam’s Resilience Report and recommends the approval thereof to the Board.
Suitably qualified persons are co-opted to join the committee to render specialist services, when necessary.
CG Swanepoel (chairman) (3 June 2013), MM Bakane-Tuoane (10 March 2010) and PB Hanratty (7 June 2017).
Group Chief Executive, Chief Actuary and selected members of senior management.
The Sanlam Customer Interest committee reviews and monitors all customer-related decisions and other related matters in the Sanlam Group at a strategic level. The committee’s main function is to act as an advisory body and to provide guidance to the Sanlam Board on strategic issues relating to customers. The committee provides guidance to management on relevant issues when requested to do so.
In general, the committee endeavours to provide guidance on questions that would typically arise in respect of the six fairness outcomes as defined by the FSB under the proposed Treating Customers Fairly (TCF) legislation. These are:
The committee has been established by the Board to monitor how effectively Sanlam meets its obligations to its customers. The committee performs its responsibilities in addition to Sanlam’s existing complaints handling and its internal arbitrator facilities, and will not take on any of the responsibilities of those bodies.
SA Nkosi (Chairman) (25 August 2017), MM Bakane-Tuoane (25 August 2017), AD Botha (25 August 2017), PB Hanratty (25 August 2017), MV Moosa (25 August 2017), KT Nondumo (25 August 2017), CG Swanepoel (25 August 2017) and PL Zim (25 August 2017).
The committee’s responsibilities and duties are to:
The Board has established these permanent standing committees with specific responsibilities, which are defined in terms of their respective charters as approved by the Board, to assist the Board in discharging its duties and responsibilities. The ultimate responsibility resides at all times in the Board and, as such, it does not abdicate this responsibility to the committees and exercise its oversight responsibility accordingly.
There is full disclosure, transparency and reporting from these committees to the Board at each Board meeting, while the chairpersons of the committees attend the AGM and are available to respond to any shareholder questions. For the period under review, all committees conducted their annual self-assessments to evaluate their effectiveness and procedures. The committee members confirmed that they are satisfied that they have fulfilled their responsibilities in accordance with each committee’s terms of reference.
The Sanlam Life Board is responsible for statutory matters across all Sanlam businesses, monitoring operational efficiency and operational risk issues throughout the Group, and ensuring compliance with the requirements set out in the Long-term Insurance Act, 52 of 1998.
The responsibility for managing all Sanlam’s direct subsidiaries was formally delegated to the Sanlam Life Board. The Sanlam Life Board has the following committees:
The Sanlam business clusters are each managed by a chief executive, supported by an executive committee and support functions that are appropriate to their particular operational needs. These chief executives form part of the Sanlam Group Executive committee and are the designated prescribed officers.
The clusters function within the strategy approved by the Sanlam Board according to a set of tight management principles established by the Group Office. Cluster boards (not all statutory) exist for each of the clusters. Each of these boards has committees (or forums) with specific responsibilities for the operation of that particular business cluster: Each has its own financial and risk, as well as human resources and remuneration (HRRC) committee/forum.
The cluster boards consist of non-executive and executive directors. Non-executive directors include members of the Sanlam Life Board and, where appropriate, expert external appointees. The majority of the operating business decisions are made by these boards and committees working together with the management of that particular cluster. These structures are responsible for the generation of memoranda and matters for consideration by the Sanlam Life Board.
Individual business units have their own boards and executive committees that structure their activities within appropriately delegated authority levels. Where required, the various business unit boards will also act as statutory boards of subsidiaries, joint ventures and associated companies.
The Sanlam Board is making strong progress in its diversity and inclusion objectives and continues to be determined and focused on diversity across its businesses. Sanlam’s diversity policy reinforces transformation as an enabler of the Sanlam Group strategy. Sanlam recognises and embraces the benefits of a diverse board. Targets to increase the numbers of female Board members are set and reviewed annually by the Nominations committee and the Board, with the target of at least 22% of the Board made up of women by the end of 2018. Non-executive and executive directorships are included in the targets.
Board diversity and experience profile