Accountability and sustainability

Corporate Governance

Stor-Age is committed to maintaining and upholding sound ethical standards and applying the principles of corporate governance recommended in King III. The principles of integrity, trust and transparency form the foundation of the company’s approach to governance. The board is ultimately responsible for the group’s governance and recognises the responsibility to conduct business with integrity, transparency, and accountability within an appropriate framework of governance and oversight to ensure the safeguarding of stakeholder interests.

In regularly reviewing the company’s governance structures, the board exercises and ensures effective and ethical leadership, always acting in the best interests of the company, while at the same time ensuring the sustainability of its business operations.

The company has therefore applied the requirements of King III in full. As required by the JSE, the application of King III is set out in the annexures here, and it is also available on our website – www.stor-age.co.za.

Governance structure

The board

The board is responsible for the strategic direction and control of the company. While overall responsibility for managing the company rests with the board as a whole, the board has appointed sub-committees as set out in the governance structure to assist in fulfilling its responsibilities. The board exercises control through a governance framework that includes the review and implementation of detailed reporting presented to it and its sub-committees, and the implementation of a continuously updated risk management programme.

There is a clear division of responsibilities at board level.

The board comprises seven directors of which three are executive and four are non-executive directors, three of whom are independent.

The board is ultimately accountable for the effective governance and direction of the group. It is supported by appropriate internal governance practices and procedures that promote an efficient, objective and independent decision-making culture considering the interests of all stakeholders.

The terms of reference of the board and its committees deal with such matters as corporate governance, directors’ dealings in securities, declarations of conflicts of interest, board meeting documentation and procedures for the nomination, appointment, induction, training and evaluation of the directors.

The board consists of an appropriate mix of individuals to ensure that there is an adequate level of knowledge, skills and expertise which enables them to contribute meaningfully to the management of the company.

There is an appropriate balance of power and authority on the board so that no individual has unfettered powers of decision-making and no individual dominates the board’s deliberations and decisions. The board regularly reviews the decision-making authority given to management as well as those matters reserved for decision-making by the board.

The role and responsibilities of the chairman and the CEO have been clearly defined and are distinct. The CEO is fully responsible and accountable for the overall operations of the group and implementation of the strategy and objectives adopted by the board.

The independent chairman is responsible for ensuring proper governance of the board and its committees, ensuring that the interests of all stakeholders are protected and facilitating constructive relations between the executive and the board. The chairman holds no other listed company chairman positions.

Board processes

Directors disclose their personal financial interests at the start of every board or committee meeting and are asked to recuse themselves from any discussions and decisions where they have a material financial interest. Board meetings take place quarterly to consider the strategic issues and key operational matters, to approve financial results and budgets, to monitor the delegated responsibilities and to set risk parameters. At these meetings, the executives and the various committees provide feedback on key performance indicators, progress on strategic objectives and various other reports.

A written company policy on share dealings is in place and formal notification is sent to all staff and directors upon commencement of a closed period.

A self-evaluation of the board was not conducted during the reporting period but will be undertaken in the 2017 financial year.

Directors are encouraged to take independent advice at the cost of the company for the proper execution of their duties and responsibilities. The board has unrestricted access to the external auditors, professional advisors, the services of the company secretary, the executives and the staff of the company at any given time.

Directors and committee members are supplied with comprehensive information that allows them to properly discharge their responsibilities. The sponsor is responsible for ongoing director development.

The board undertakes the role of a nomination committee and the selection, appointment and approval of new directors is therefore undertaken by the board as a whole in a formal and transparent manner, free from any dominance of any one particular shareholder. Any new appointees are required to possess the necessary skills to contribute meaningfully to the board’s deliberations and to enhance the board’s composition in accordance with recommendations, legislation, regulations and best practice. An induction programme is provided for new directors by the company’s sponsor.

A third of the non-executive directors must resign and stand for re-election at each annual general meeting. Details of directors making themselves available for re-election at the forthcoming annual general meeting are set out on page 55 of the integrated report.

Board and committee meetings

The table below sets out the board and committee meetings held during the reporting period and the attendance at each:

Company secretary

The board is assisted by a suitably qualified company secretary, Henry Steyn, CA(SA) who has adequate experience, is not a director of the company and who has been empowered to fulfil his duties. The company secretary advises the board on appropriate procedures for management of meetings and ensures the corporate governance framework is maintained.

The directors have unlimited access to advice and services of the company secretary. Nothing has come to the attention of the board that indicates non-compliance by the company with applicable laws and regulations.

Given that the company secretary is not a director or an associate of a director of Stor-Age, the board is satisfied that an arms-length relationship is maintained between the board and company secretary.

The board will satisfy itself on an annual basis on the competence, qualifications and experience of the company secretary.

During the 2016 financial year, the board considered Mr Steyn’s qualifications, experience and performance and following this review, the board confirms that it is satisfied as to the competence, qualifications and experience of Mr Steyn as company secretary.

IT governance

The board believes that the IT governance policy is appropriate. Use is made of external specialists when this is considered necessary.