| Principle |
|
Board requirement |
Comment |
Applied/
partially
applied/
not
applied |
|
| Chapter 2: Boards and directors |
|
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|
 |
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The board should act as the
focal point for and custodian of
corporate governance. |
In line with its charter, the board acts as the focal point for and
custodian of corporate governance by conducting its relationship
with management, shareholders and other stakeholders along sound
corporate governance principles. No one director has unfettered
powers of decision making. |
Applied |
|
 |
|
The board should appreciate that
strategy, risk, performance and
sustainability are inseparable. |
The board, in line with its charter, is responsible for aligning the
strategic objectives, vision and mission with risk and performance.
The group’s formal risk management process considers the full
range of risks including strategic and operational risk, encompassing
performance and sustainability. A social and ethics committee is
responsible for sustainability issues. |
Applied |
|
 |
|
The board should provide effective
leadership based on an ethical
foundation. |
In line with its charter, the board is the guardian of the values and
ethics of the group and provides effective leadership on an ethical
foundation. The group’s code of ethics sets out its commitment
to the highest level of ethical conduct, fair dealing and integrity in
business practice as an operational imperative. |
Applied |
|
 |
|
The board should ensure the
company is and is seen to be a
responsible corporate citizen. |
See 2.3. |
|
|
 |
|
The board should ensure the
company’s ethics are managed
effectively. |
The board ensures Hyprop’s ethics are managed effectively. The
social and ethics committee assists the board in overseeing social
and ethical matters for the group. Hyprop’s code of ethics, to which
all members of the board, management and employees are required
to adhere, promotes ethical business practices. Employees and the
public can report any acts of fraud and unethical behaviour on a
confidential fraud hotline. |
Applied |
|
 |
|
The board should ensure the
company has an effective and
independent audit committee. |
The audit committee comprises three independent non-executive
directors in line with King III. Members are elected by shareholders at
the annual general meeting. |
Applied |
|
 |
|
The board should be responsible for
the governance of risk. |
The risk committee is responsible for overseeing the group’s risk
management programme. It reports to the board which retains
ultimate responsibility for the control and management of risk.
The risk committee is responsible for reviewing and assessing the
company’s risk control systems and ensures that risk policies and
strategies are effectively managed. Specifically the role of the
committee is to assist the board in ensuring that:
 |
The company has implemented an effective policy and plan for
risk management that will enhance its ability to achieve its strategic
objectives |
|
Disclosure on risk is comprehensive, timely and relevant. |
|
Applied |
|
 |
|
The board should be responsible for
IT governance |
The board, through the risk committee, is responsible for effectively
managing relevant IT risks. |
Applied |
|
 |
|
The board should ensure that
Hyprop complies with applicable
laws and considers adhering to non-binding
rules, codes and standards. |
In line with its charter, the board ensures Hyprop complies with
applicable laws and considers adherence to non-binding rules and
standards, assisted by the risk committee. |
Applied |
|
 |
|
The board should ensure there is an
effective risk-based internal audit. |
The outsourced internal audit service provider offers an
independent, risk-based internal audit function. The internal auditor
reports directly to the audit committee and is invited to attend all
audit committee meetings. |
Applied |
|
 |
|
The board should appreciate that
stakeholders’ perceptions affect the
company’s reputation. |
The board recognises that engaging with appropriate individuals or
groups enhances our operations and enables us to manage risk and
reputation. Investor relations and stakeholder engagement are key
focus areas for the board. |
Applied |
|
 |
|
The board should ensure the
integrity of the company’s
integrated report. |
The audit committee oversees integrated reporting and is responsible
for recommending the board to approve this report. |
|
|
 |
|
The board should report on the
effectiveness of the company’s
system of internal controls. |
The audit committee oversees internal audit, including the
appointment of this function, monitoring its performance and
approving the internal audit plan. It ensures the internal audit
function is subject to an independent quality review, as the
committee deems appropriate. Internal audit is outsourced and
independent. It assists management in assessing whether systems of
internal control are adequate and effective. Internal audit prepares a
plan aligned to Hyprop’s key risks. |
Applied |
|
 |
|
The board and its directors should
act in the best interests of the
company. |
The board acknowledges its role as trustee on behalf of shareholders.
In terms of its charter, it acts in the best interests of the group by
ensuring individual directors adhere to legal standards of conduct;
are permitted to take independent advice in connection with their
duties following an agreed procedure; disclose real or perceived
conflicts to the board and deal with them accordingly; and deal in
securities only in line with the policy adopted by the board. |
Applied |
|
 |
|
The board should consider business
rescue proceeding or other
turnaround mechanisms as soon as
the company is financially distressed
as defined in the Act. |
The board is responsible for initiating business rescue proceedings if
warranted. The audit committee reviews the going-concern principle,
as well as the solvency and liquidity principle, as set out in the
Companies Act. |
Applied |
|
 |
|
The board should elect a chairman
who is an independent non-executive
director. The chief
executive officer (CEO) should not
also fulfil the role of chairman of
the board. |
The chairman of Hyprop is an independent non-executive director.
His role is to provide strategic guidance as well as encourage and
allow adequate debate at board level. The company’s MoI provides
for one-third of directors to retire by rotation after a three-year
term of office. |
Applied |
|
 |
|
The board should appoint the
CEO and establish a framework for
delegation of authority. |
The board appointed Pieter Prinsloo as CEO and has approved a
framework for delegation of authority. The CEO is responsible for
strategy execution and the oversight of day-to-day operations. |
Applied |
|
 |
|
The board should comprise a
balance of power, with a majority
of non-executive directors. The
majority of non-executive directors
should be independent. |
The majority (nine) of directors are non-executive, with six
categorised as independent. |
Applied |
|
 |
|
Directors should be appointed
through a formal process. |
There is a formal and transparent process for appointment of
directors. The remuneration and nomination committee assists with
the process of identifying suitable candidates to be proposed to
shareholders. |
|
|
 |
|
The induction, and ongoing training
and development, of directors
should be conducted through
formal processes. |
There is a formal induction programme for new directors.
Inexperienced directors are developed through mentorship
programmes. Continuing professional development programmes are
implemented to ensure directors receive regular briefings on changes
in risks, laws and the environment. |
Applied |
|
 |
|
The board should be assisted by a
competent, suitably qualified and
experienced company secretary. |
CIS Company Secretaries Proprietary Limited, an independent
company secretarial practice, was appointed in compliance with the
Companies Act, JSE Listings Requirements and recommendations of
King III. The board deems its representative, Neville Toerien, to be
suitably qualified. The company secretary operates on an arm’s-length
basis from the board and is not a member of the board. |
Applied |
|
 |
|
The evaluation of the board, its
committees and individual directors
should be performed every year. |
The board was evaluated in July 2014. |
Applied |
|
 |
|
The board should delegate certain
functions to well-structured
committees, but without abdicating
its responsibilities. |
Without abdicating its own responsibilities, the board delegates
certain functions to specific committees:
|
Audit committee |
|
Risk committee |
|
Investment committee |
|
Remuneration and nomination committee |
|
Remuneration and nomination committee |
Each committee has a formal charter approved by the board and
reviewed regularly. |
Applied |
|
 |
|
A governance framework should be
agreed between the group and its
subsidiary boards. |
All policies and procedures are followed by subsidiary boards. |
Applied |
|
 |
|
Companies should remunerate
directors and executives fairly and
responsibly. |
The board is responsible for ensuring Hyprop has an appropriate
remuneration strategy. The remuneration and nomination committee
has an independent role, making recommendations to the board for
its consideration and final approval to ensure the group remunerates
directors (including fees for non-executive directors) and executives
fairly and responsibly; and that disclosure of directors’ remuneration
is accurate, complete and transparent. Remuneration is set out in the
remuneration report. Fees for board and committee members are
approved annually at the annual general meeting. |
Applied |
|
 |
|
Companies should disclose the
remuneration of each individual
director and prescribed officers. |
The remuneration of directors and prescribed officers is disclosed
and applied in of the financial statements. |
Applied |
|
 |
|
Shareholders should approve the
company’s remuneration policy. |
Details of the remuneration policy are on page 66. The remuneration
policy is submitted to shareholders to consider and endorse by way
of a non-binding advisory vote at the annual general meeting. |
Applied |
|
