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Compliance

The board of directors believe that companies within the group endorse the principles as set out in the Protocol on Corporate Governance, and where applicable, the King Report on Corporate Governance for South Africa 2002 (King II) and has endeavoured to comply with the principles incorporated in the Code of Corporate Practices and Conduct.

Governing bodies

Board of directors: Separate boards of directors for the holding company and each of the operating subsidiaries are appointed. The board of directors of CEF consists of seven non-executive directors and one executive director. At least four board meetings are held during a year. The framework for the payment of directors' remuneration is approved by the Minister of Minerals and Energy.

The board of directors of the holding company and the operating subsidiaries have appointed the following two sub-committees to assist in carrying out their responsibilities.

Board audit and risk management committees: The board audit and risk management committees consists of non-executive directors and sometimes independent members. Each committee has agreed terms of reference as approved by the board of directors. The report of the CEF board audit and risk committee is included in the group annual financial statements. The report sets out the responsibilities covered by this committee.

Board human resources committees: This committee consists of non-executive directors and an executive member and are chaired by a non-executive director appointed by the respective board of directors. The committees review and recommend annual staff remuneration increases, terms and conditions of employment, the payment of incentives and bonuses, general fringe benefits, remuneration policies and the appointment of senior staff.

Chief executive officer: The chief executive officer of the holding company and those of the operating subsidiaries are appointed by the board of directors of each company. They are held accountable for implementing the strategies of the board of directors and managing the business of the respective companies in accordance with the approved corporate plan and budget.

Terms of reference for each chief executive officer are approved by the appropriate board of directors.

Materiality and significant framework

A materiality and significant framework is in place. Its purpose is to regulate the disclosure of material facts to the Minister of Minerals and Energy, disclosure in the group annual financial statements and approval from the Minister for participation in certain transactions.

Internal Audit

The internal audit departments, headed by internal audit managers, are accountable to the board audit and risk management committees.

The internal audit department functions in terms of an internal audit charter that is approved by the board of directors. The internal audit charter defines the purpose, authority and responsibility of the internal audit function. The internal audit function carries out its work in terms of an approved internal audit work plan based on the risk framework of the company. The head of the internal audit department has full access to the chairpersons of the boards of directors and the chairpersons of the board audit and risk management committees.

Management reporting

Comprehensive management reporting disciplines are in place, which include the preparation of an annual corporate plan, and budget approved by the board of directors. Monthly and quarterly results are reported against the approved budget to the executive committees and the boards of directors for review.

Ethics

The group has a code of ethics that requires employees to observe the highest ethical standards thereby ensuring that business practices are conducted in a manner that is beyond reproach.

Non-financial information

Black economic empowerment: CEF is committed to ensuring that it meets the objectives of the government’s broad-based economic empowerment strategy. In support of this, a working group has been established to consider, among others, a policy and procedure on procurement by CEF from black suppliers.

Other group companies have policies on preferential procurement to support black economic empowerment that have been approved by their boards of directors. Supplier development programmes are in the process of being implemented to support affirmative procurement initiatives.

Corporate social investment: The group’s corporate social investment programme covers the group’s involvement in the community through the support, financial or in kind, of deserving causes, organisations, institutions for projects.

The programme is designed to support socially constructive projects, giving preference to those on which it will have a long-term multiplier effect. Increasing participation by employees from all sectors of the group in meaningful community activities will contribute towards improving the standard of living of all South Africans.

Worker participation: CEF has instituted the Sandton Forum as the primary vehicle that promotes employee participation and consensus seeking with respect to matters that relate to people policies, procedures and practices. The constitution of the forum has been revised and approved by management. The management representatives have been nominated along with all other representatives and the forum meets four times a year to address issues of common interest. The forum will also act as a “watchdog” for employees with respect to issues such as employment equity, development of employees, social responsibility initiatives, promotion of values, skills development and learnership progress.

Other group companies have participative structures at various levels for handling issues that affect employees directly and materially. These structures, which have been set up in consultation with employee representatives, are designed to achieve good employer/employee relations and uphold company values through effective sharing of relevant information, consultation and the identification and resolution of conflict.