The Sanlam Board is overseeing a group of companies that has been in business for more than a century. Its role includes safeguarding this legacy and ensuring that the Group continues to create value for generations to come. The Board is the accountable custodian of corporate governance at Sanlam. It is committed to ensuring, collectively and individually, that sound governance principles are fully integrated into all aspects of the business. As a result, Sanlam’s policies and procedures are controlled and executed according to a structured and formal system. This encompasses maintaining a balance between sometimes competing expectations of the Group’s stakeholders.
Read more about all governance aspects in the full Governance Report.
The Board held seven meetings during 2018, of which two were special Board meetings to, among other things, approve the following major transactions concluded during the year:
Further focus areas during the year included:
Our governance structures enable us to consider and balance the needs of all of our stakeholders. We believe that this creates sustainable value and trust.
The Board’s approach to ethical and effective leadership is directed by the Sanlam Group Business Philosophy. It explains in detail how the Group acts and conducts its business as a single entity and at the same time, positions the Group as “One Brand”. It includes a summary of Sanlam’s culture, its values and responsibilities, thereby encapsulating the way in which it does business and allocates resources. The Group Business Philosophy is underpinned by the Group’s Code of Ethical Conduct which in turn, underpins Sanlam’s core values.
We have an “owner-manager” culture, which is underwritten by key concepts such as entrepreneurship, empowerment and accountability. Sanlam attracts, recruits, supports and develops entrepreneurial and intrapreneurial self-starters that have a passion for what they do. We empower them, hold them accountable and reward them appropriately.
The essence of our culture is captured in traditional values such as honesty, hard-working and ethical behaviour, commitment, innovation, stakeholder value and strong ties with business partners.
To attract and retain clients, Sanlam provides innovative financial solutions along the full extent of the wealth creation, management and protection value chain. To develop these solutions, we invest in and value diversity in our people, particularly for their contribution to innovative thinking.
We only seek win-win relationships with stakeholders, characterised by traditional values that follow the spirit and mutual intent rather than the letter of agreements.
We seek long-term, mutually beneficial relationships with business partners. When acquiring new businesses, Sanlam’s general preference is for majority equity control.
To generate revenue, a loyal and satisfied client base is of pivotal importance. This includes a value proposition that incorporates tailored financial product and service offerings, continuous appropriate advice delivery and an omni-channel presence. One of the fundamental underlying principles informing our approach to clients is based on the Treating Customers Fairly (TCF) regulatory framework.
We provide innovative financial solutions along the full extent of the wealth creation, management and protection value chain. Effective services, product development and pricing, distribution and branding can only occur if it serves the needs of the selected target market.
The five clusters are largely autonomous in their management of the business units within a framework of tight principles. Synergy and cooperation amongst the clusters are maintained and supported by the Group Office. Interdependence and collaboration are clearly understood in the effort to generate maximum sustainable value and return on capital employed.
To support and develop mature governance and ethics structures and processes in the emerging markets where Sanlam operates, all companies across the Group are expected to adhere to as well as confirm compliance with Sanlam’s governance principles in their respective annual board representation letters. In addition, the Group conducts ongoing risk management maturity assessments over time. There also continues to be a strong focus on increasing awareness, capacity and knowledge of the non-negotiable role ethical conduct plays in the success of Sanlam among SEM employees and management, as well as subsidiary companies.
The Board is satisfied that, during 2018, every effort was made to apply and explain all aspects of King IV™, as appropriate. The Risk and Compliance, Audit, Actuarial and Finance, Human Resources and Remuneration, and Social, Ethics and Sustainability committees are all satisfied that Sanlam has complied with the King IV™ principles during 2018 and is taking steps to ensure continued adherence to the obligations placed upon the Group in this regard.
The Group regularly assesses its compliance levels to ensure that all areas requiring improvement have been appropriately identified and addressed. A register with a summary of the principles and references to more information per principle is available on the Sanlam investor relations website.
Sanlam Limited (Sanlam) is the holding company with a primary listing on the JSE and secondary listings on the Namibian Stock Exchange as well as A2X. Sanlam Life Insurance Limited (Sanlam Life) is a wholly owned subsidiary of Sanlam Limited conducting mainly life insurance business. The directors of Sanlam also serve on the Board of Sanlam Life. The two boards function as an integrated unit, in practice, as far as possible. Both boards have the same directors, Chairs, executive directors and Group 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 centres 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 also responsible for overseeing the relationship with key stakeholders of the Group. The Board has the following committees:
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 Prudential Standards under the Insurance Act, 2017.
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:
Sanlam’s decentralised business approach requires that each of its business clusters operates in concert with its underlying business units. However, all entities within the Group are required to endorse the spirit and principles of King IV™ by putting measures in place to ensure good corporate governance business practices. All businesses and governance structures in the Group are supported by clear approval frameworks and agreed- upon business principles, which ensure a coherent and consistent application of the Group’s governance approach across the businesses.
The Nominations committee follows a formal process to review the balance, effectiveness and diversity of the Board and its committees. It identifies the skills required and those individuals that are seen to provide such skills in a fair and thorough manner. The committee also considers other commitments of directors and whether each director has sufficient time to fulfil his/her responsibilities as director. If the Nominations committee believes that a director is over-committed or has an unmanageable conflict, the Chair will meet with that director to discuss the resolution of the matter to the satisfaction of the committee. At the end of 2018, the Board comprised 13 members.
Sanlam recognises and embraces the benefits of a diverse Board. Targets to increase the number of female Board members are reviewed on an annual basis by the Nominations committee and recommended to the Board. The target that had been set for the 2018 financial year was 35% for female representation. Non-executive and executive directorships were included in the mentioned race and gender diversity targets. The Board made progress in advancing diversity by appointing Mathukana Mokoka and Shirley Zinn.
For 2019 the Board aims to retain existing talent and continuously improve on the Group’s transformation and diversity deliverables.
The independence of each non-executive director is reviewed annually. Their independence in character and judgement, as well as the presence of any relationships or circumstances which are likely to affect, or could appear to affect, their objectivity, are taken into consideration. Each director has the opportunity to declare any interests that might occur at each Board meeting. This is documented, and the relevant director is recused from the meeting.
Based on the recommendation of the Nominations committee, the Board is comfortable that each of the non-executive directors met the requisite fit and proper requirements which include the criteria for independence. This assertion, however, excludes Patrice Motsepe, Rejoice V Simelane and Johan van Zyl owing to their involvement in Ubuntu-Botho. Ian Kirk, Heinie Werth and Temba Mvusi are executive directors.
The Chair of the Board is therefore not independent. The Board considered the governance deviation in the appointment of the Board Chair but agreed that the Chair’s long-term association with Sanlam combined with his industry experience and expertise, ensured that he would add value to the Board as well as the Group’s future growth.
Consequently, in the spirit of promoting good governance and to continuously evaluate the Board’s performance and effectiveness in executing its governance responsibility, the Board has appointed a lead independent director as well as an Independent Non-Executive Director committee. The lead independent director serves as a sounding board for the Chair and acts as an intermediary between the Chair and other members of the Board, if and when necessary.
Every year, a collective Board effectiveness evaluation is conducted under the auspices of the Chair. For 2018, this assessment was performed with the assistance of an external service provider. The Nominations committee considered the results of the evaluation process and made recommendations to the Board where deemed appropriate. These assessments are transparent and documented. The Board Chair’s own performance is appraised by the Board under the direction of the lead independent director. The evaluation (which was a combination between a detailed questionnaire and interviews) confirmed that the Board and its committees were functioning effectively and that there were no material matters to report.
Following the release of King IV™, the SES committee charter was updated to align with the recommended practices, which include assisting the Board with responsible investment. This includes the promotion of good governance and value creation in all entities in which Sanlam invests.
The Board exercises its oversight responsibility, rights and obligations through elected representatives in the various companies in which it has invested. The Sanlam and Sanlam Life Board has the ultimate responsibility to ensure that Sanlam promotes good governance by investing responsibly. The Board achieves this through its Group executive committee and the respective governance structures within each of the cluster businesses. The cluster executive committees have the responsibility to ensure that Sanlam investments are managed in accordance with the policies and investment mandates. The Board requires that these governance practices promote responsible investment, achieve good governance, promote ethical culture, and enhance effective control, good performance and legitimacy.
Examples of responsible investment include investing in support of economic growth and financial stability, for example in funding provided to government and private enterprises, as well as liquidity provided to the banking system.
SIG subscribed to the Code for Responsible Investing in South Africa (CRISA) in 2011 and is committed to integrating its five principles into its investment approach.
In addition, SIG subscribes to the United Nations Principles for Responsible Investments (UNPRI), upon which CRISA is based. SIG annually assesses its policy framework and implementation against the CRISA principles to compare its progress with that of its international peers.
Read more about Sanlam and responsible investment.
The full profiles of our Board members, including their date of appointment, age, skills and expertise are available on the investor relations website. Below are the Board members as at 31 December 2018 with their independence status and membership of the respective Sanlam Board committees.