Our system of corporate governance is based on the values and principles that underpin the day-to-day activities of our group, including responsiveness, collaboration, transparency, integrity and accountability. This approach encompasses a commitment to excellence in corporate governance standards that we regard as fundamental to the sustainability of the group’s performance.

Applying governance principles

The board is committed to applying the recommendations of King III, complying with the JSE Listings Requirements and the Companies Act, as well as incorporating relevant standards of best practice. In line with King III’s “apply or explain” approach, the directors disclose the extent to which Hyprop applies these principles to create and sustain value for stakeholders over the short, medium and long term, and explain any instances of non-compliance. The King III application is in our online report. Hyprop has elected to participate in the Institute of Directors Southern Africa’s (IoDSA) governance assessment instrument, achieving the highest application score of AAA. There is scope to improve our application in terms of independent assurance.


Using the IoDSA online tool, we are able to:

Evaluate the implementation of governance structures and processes recommended by King III
Track progress on implementing King III
Provide a simplified framework for the board for a risk-based review of applying King III
Facilitate a meaningful scoring mechanism for our adoption of King III
Provide a framework for independently assuring corporate governance
Provide an audit programme for internal and external service providers.

This assessment instrument covers main governance categories of:

Board composition
Corporate governance office bearers
Board role and duties
Board committees
Performance assessment.

Please view the full report on compliance to each of the King III principles online.

Hyprop Investments Limited

Ethical leadership and corporate citizenship

Hyprop’s board and management team understand that ethical conduct and good corporate citizenship underpin the King III code, where leadership is expected to direct business strategy and operations to ensure long-term sustainability. In line with its charter, the board is the guardian of the group’s values and ethics. This is achieved by effectively managing corporate ethics and aligning business strategy to corporate values, while considering our impact on the economy, society, stakeholders and the environment.

The board leads by example and embodies the values set out in our code of conduct and ethics, published online. The social and ethics committee of the board monitors compliance with Hyprop’s code of conduct and ethics and other relevant social, ethical and legal requirements, as well as best practice. It reports to shareholders on matters in its mandate at the annual general meeting and via this integrated report.

Ethical behaviour is monitored through the Hyprop whistleblower’s line (0800 555 317), an independent hotline operated by an external provider that provides regular call analysis to enable Hyprop to investigate all allegations promptly. Formal reports on matters that may impact financial performance are submitted to the audit committee. One report was received during the period, which was appropriately addressed.

2015 governance highlights

Participated in IoDSA’s governance assessment for the second time – achieved overall AAA score, indicating the highest application of the principles and recommendations of King III
Audit committee comprises only independent non-executive board members
Majority of the board is independent.

The chairmen of key committees – audit, remuneration and nomination, and social and ethics – are all independent non-executive directors.

View charters of each committee online.

Composition of the board

Hyprop’s board comprises 11 directors: six independent non-executives, three non-executives, and two executive directors.

The diverse experience in commerce and industry of our non-executive directors enables them to make informed and independent decisions. Strategy is evaluated and approved, group performance scrutinised and executive management monitored against key performance indicators. Their guidance and outlook on the group’s financial, audit, corporate governance and risk management systems and controls are especially valuable. Transformation, succession planning and the remuneration process (at senior level) is reviewed to ensure sustainable leadership. Non-executive directors are not involved in the daily operations of the company.

Hyprop has processes in place to ensure all directors have no conflicts of interest in fulfilling their duties, or in the event that conflicts do exist, they are properly declared and dealt with in accordance with relevant regulatory requirements. Constructive debate at meetings contributes to informed decisions.

The chairman, Gavin Tipper, is an independent non-executive director. His role is clearly defined and separated from that of the chief executive officer, Pieter Prinsloo. Similarly, the responsibilities of chief executive officer and financial director are strictly separated from those of non-executive directors to ensure that no single director can make unilateral decisions. The chairman provides leadership and guidance to the board and encourages proper deliberation on all matters requiring directors’ attention, while obtaining input from other directors. The chief executive officer and financial director are responsible for implementing strategy and operational decisions.

Board changes

There were no changes to the board or to its committees during the period under review, save for the appointment of Mike Lewin, an independent non-executive director, as chairman of the social and ethics committee.

Board appointment process

With support from the remuneration and nomination committee, the board is responsible for new appointments, and following a formal and transparent process to identify and select candidates. The board and committee consider the mix of skills and experience required to drive Hyprop’s operational progress and sustainable transformation, as well as other relevant factors, including diversity and regulatory compliance. Induction for new directors includes a briefing by the chairman, chief executive officer, financial director and sponsor, Java Capital. They are also introduced to key senior management at company and shopping centre levels, with site visits to shopping centres.

In terms of the memorandum of incorporation, the appointment of new directors is confirmed by shareholders at the subsequent annual general meeting.

Rotation of directors

Hyprop’s Memorandum of Incorporation stipulates that one-third of directors retire by rotation after a three-year term. If eligible, these directors will offer themselves for re-election.

Directors standing for re-election by rotation at the upcoming annual general meeting are Louis van der Watt, Louis Norval and Thabo Mokgatlha.

Succession planning

The remuneration and nomination committee is responsible for ensuring adequate succession planning for directors and management, and that all committees are appropriately constituted and chaired. The board is satisfied that the depth of skills contributed by current directors meets its succession requirements.

Director development

Directors have access to experts and other parties required to carry out their duties. In addition, they are encouraged to continue their professional development in their personal capacity.

Company secretary

CIS Company Secretaries Proprietary Limited is an independent practice providing services to numerous JSE-listed companies. The board is satisfied that the company secretary and its representative, Neville Toerien, have maintained an arm’s-length relationship with the board and are sufficiently qualified and skilled to act in accordance with, and update directors on, the recommendations of King III and other relevant regulations and legislation.

The board reviews the relationship between the company secretary and the board members on an annual basis. The board has determined that the company secretary is independent from management and does not take on any management or executive duties on behalf of the board of directors or on behalf of any subsidiary companies. The company secretary is not a director of the company or a material shareholder of the company or any of the company’s subsidiaries and has not entered into any major contractual relationships with the company or any director. Accordingly, the board is satisfied that the company secretary maintained an arm’s-length relationship with the board of directors.

The functions of the company secretary includes:

Guiding directors, collectively and individually, on their duties, responsibilities and powers
Providing information on legislation, regulations and matters of ethics and good corporate governance relevant to the company
Recording the minutes of meetings, including attendance registers, resolutions, directors’ declarations of personal and financial interests and all notices and circulars issued by the company
Preparing the notice of the annual general meeting
Assuming responsibility for filing annual and other returns in terms of the Companies Act.

The company secretary updates the board on developments relating to ethics, corporate governance, legislation and regulation. The board then reviews any changes and appropriate measures are implemented to comply with best practice and support sustainable performance.

Performance self-assessment

The board is satisfied that all independent non-executive directors meet the criteria of King III.

Access to information

Directors have unrestricted access to the advice and services of the company secretary and to company records, information, documents and property. Non-executive directors have full access to the external and internal auditors, and to management. All directors are entitled, at Hyprop’s expense, to take independent professional advice on any matters concerning the affairs of the company.

Access to the board

Shareholders can provide recommendations or direction to the board at the annual general meeting, one-on-one meetings, investor presentations and through investor polls.

Dealing in securities

The board complies with the JSE Listings Requirements that restrict trading in Hyprop’s shares by directors, company secretary and employees in defined closed periods. In conjunction with the financial director and sponsor, the board ensures the required disclosure of trades in Hyprop shares is published on SENS. Directors and senior employees with access to the company’s financial results and other price-sensitive information are barred from dealing in Hyprop shares for specified periods before relevant announcements. A notification to all directors and affected staff alerts them that the company is entering a closed period.

Hyprop uses dividend per share as the relevant measure of financial results for the purpose of reporting on trading statements, if any.

Conflicts of interest

As per the code of ethics and conduct, directors must declare to the chairman and company secretary their shareholdings, additional directorships and any potential conflicts of interest.

Board committees

Please see the outline of board committees.

The board is satisfied that all committees have fulfilled their responsibilities during the year as per their approved charters. Each committee’s performance is reviewed annually

The need for additional committees is evaluated regularly. Hyprop’s remuneration and nomination committees are combined. Discussions on agenda items for nomination committee matters are chaired by the board chairman.

There is full disclosure from committees to the board, including verbal reports on recent activities by committee chairmen to the board. Minutes of committee meetings are made available to all board members. In addition, the board chairman and chairmen of each committee attend Hyprop’s annual general meeting to answer questions from stakeholders.

Board and committee meetings

The board meets at least four times a year, with ad hoc meetings when necessary. Relevant notice and information is supplied in advance, ensuring directors can make well-researched and reasoned decisions.

The investment committee meets on an ad hoc basis as necessary.

Attendance at board and committee meetings for the review period (1 July 2014 to 30 June 2015) is reflected below.

  Board Audit Risk Remuneration
and nomination
and ethics
Independent non-executive directors          
GR Tipper (chairman of the board) 4/4 5/5 2/2(e) 2/2 2/2(e)
EG Dube(c) 4/4     2/2  
L Engelbrecht(a) 4/4 5/5 2/2 2/2  
TV Mokgatlha 4/4 5/5      
MJ Lewin(d) 4/4       2/2
LLS van der Watt 2/4        
Non-executive directors          
KM Ellerine 4/4        
L Norval 4/4        
S Shaw-Taylor(b) 4/4   2/2 2/2  
Executive directors          
PG Prinsloo (CEO) 4/4 5/5(e) 2/2 2/2(e) 2/2
LR Cohen (FD) 4/4 5/5(e) 2/2 2/2(e) 2/2(e)
Executives and management          
M de Klerk     2/2(e)    
K Eichhorn     2/2(e) 2/2(e) 2/2(e)
D Nafte     1/2(e)   2/2(e)
S Riley     2/2(e)   2/2(e)
B Frylinck(e)     1/2(e)    
V Watson     1/2(e)   1/2(e)
T Rasiluma 1/4(e) 2/5(e) 2/2(e)   2/2(e)
V Booysen   2/5(e) 2/2(e)   2/2
M Hattingh   4/5(e) 1/2(e)    

Compliance with laws, rules, codes and standards

The national legal executive and executive management ensure Hyprop complies with all current regulations and legislation, liaising closely with the company’s sponsor. If there are areas of non-compliance, these areas will be formally tabled through the risk management process under the supervision of the risk committee.

There were no material compliance issues during the year. The Hyprop board meets ad hoc to monitor progress against the property sector charter, with particular focus on transformation.

Legislations/regulations with which the company is required to comply include:

Property sector charter
Basic Conditions of Employment Act 75 of 1997
Companies Act 71 of 2008
Compensation for Occupational Injuries and Disease Act 130 of 1993
Competition Act 89 of 1998
Employment Equity Act 55 of 1998
Labour Relations Act 66 of 1995
Occupational Health and Safety Act 85 of 1993
Value Added Tax Act 89 of 1991
Financial Intelligence Centre Act 38 of 2001
Consumer Protection Act 68 of 2008
Financial Markets Act 19 of 2012
Income Tax Act 58 of 1962
Promotion of Access to Information Act 2 of 2000
Protection of Personal Information Act 4 of 2013
Protected Disclosures Act 2000
Securities Services Act 36 of 2004

As Hyprop is a listed Real Estate Investment Trust (REIT), it is required to comply with the JSE Listings Requirements and rules that are specific to REITs in South Africa.

Anti-competitive behaviour

Hyprop has not been party to any legal actions for anti-competitive behaviour or monopoly practices during the period.

Policy documents available online

Board charter
Audit committee charter
Investment committee charter
Remuneration and nomination committee charter
Risk committee charter
Social and ethics committee charter
Code of conduct and company policy
Employment equity policy and plan
Memorandum of incorporation


Registration number: 1987/005284/06
2nd Floor, Cradock Heights, 21 Cradock
Avenue, Rosebank, 2196
PO Box 52509, Saxonwold, 2132
Tel: +27 11 447 0090
Fax: +27 11 447 0092


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