KING III INDEX

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Ethical leadership and corporate citizenship

   Effective leadership based on an ethical foundation
Responsible corporate citizen
Effective management of Clover’s ethics
             

Boards and Directors

   The Board should act as the focal point for and custodian of corporate governance   tick The Board should consider business rescue proceedings or other turnaround mechanisms as soon as the company is financially distressed as defined in the Act
tick The Board should appreciate that strategy, risk, performance and sustainability are inseparable   The Board should elect a chairman of the Board who is an independent non-executive director. The CEO of the company should not also fulfil the role of chairman of the Board
    The Board should provide effective leadership based on an ethical foundation   tick The Board should appoint the chief executive officer and establish a framework for the delegation of authority

Exceptions

The Chairman of the Board, WI Büchner, is a Non-executive Director who is not independent insofar as he is a milk producer and supplier of raw milk to the Group. In the opinion of the Board, it is in the interests of the Group to maintain a close relationship with its raw milk suppliers and his appointment serves the long-term interests of the Group. As recommended by the Code, TA Wixley has been appointed as Lead Independent Director to fulfil the functions of the Chairman whenever a conflict arises and in the other circumstances envisaged in the Code. The role of Chairman and Chief Executive vest in two separate individuals as required by the Code.

Until the Group’s sustainability reporting systems have matured sufficiently, it is the opinion of the Board that no purpose will be served by having its Report on Six Capitals fully independently assured. Partial combined assurance has been obtained, refer to here.

   tick The Board should ensure that the company is and is seen to be a responsible corporate citizen   tick 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 Board should ensure that the company’s ethics are managed effectively   tick Directors should be appointed through a formal process
  tick The Board should ensure that the company has an effective and independent audit committee   tick The induction of and ongoing training and development of directors should be conducted through formal processes
  The Board should be responsible for the governance of risk   tick The Board should be assisted by a competent, suitably qualified and experienced company secretary
tick The Board should be responsible for information technology (IT) governance   tick The evaluation of the Board, its committees and the individual directors should be performed every year
The Board should ensure that the company complies with applicable laws and considers adherence to non-binding rules, codes and standards   tick The Board should delegate certain functions to well-structured committees but without abdicating its own responsibilities
tick The Board should ensure that there is an effective risk-based internal audit   tick A governance framework should be agreed between the group and its subsidiary Boards
The Board should appreciate that stakeholders’ perceptions affect the company’s reputation   tick Companies should remunerate directors and executives fairly and responsibly
tick The Board should ensure the integrity of the company’s Integrated Annual Report   tick Companies should disclose the remuneration of each individual director and prescribed officer
The Board should report on the effectiveness of the company’s system of internal controls   tick Shareholders should approve the company’s remuneration policy
tick The Board and its directors should act in the best interests of the company   tick  
             

Audit Committee

   The Board should ensure that the company has an effective and independent audit committee
tick Audit committee members should be suitably skilled and experienced independent non-executive directors
    The audit committee should be chaired by an independent non-executive director
    tick The audit committee should oversee integrated reporting
    The audit committee should ensure that a combined assurance model is applied to provide a coordinated approach to all assurance activities
    tick The audit committee should satisfy itself of the expertise, resources and experience of the company’s finance function
    The audit committee should be responsible for overseeing of internal audit
    tick The audit committee should be an integral component of the risk management process
    The audit committee is responsible for recommending the appointment of the external auditor and overseeing the external audit process
    tick The audit committee should report to the Board and shareholders on how it has discharged its duties
     

The
governance
of risk

   The Board should be responsible for the governance of risk
tick The Board should determine the levels of risk tolerance
The risk committee or audit committee should assist the Board in carrying out its risk responsibilities
tick The Board should delegate to management the responsibility to design, implement and monitor the risk management plan
tick The Board should ensure that risk assessments are performed on a continual basis
tick The Board should ensure that frameworks and methodologies are implemented to increase the probability of anticipating unpredictable risks
The Board should ensure that management considers and implements appropriate risk responses
tick The Board should ensure continual risk monitoring by management
The Board should receive assurance regarding the effectiveness of the risk management process
tick The Board should ensure that there are processes in place enabling complete, timely, relevant, accurate and accessible risk disclosure to stakeholders
       

The governance
of information
technology

   The Board should be responsible for information technology (IT) governance
tick IT should be aligned with the performance and sustainability objectives of the company
The Board should delegate to management the responsibility for the implementation of an IT governance framework
tick The Board should monitor and evaluate significant IT investments and expenditure
IT should form an integral part of the company’s risk management
tick The Board should ensure that information assets are managed effectively
A risk committee and audit committee should assist the Board in carrying out its IT responsibilities
       

Compliance
with laws,
codes, rules
and standards

   The Board should ensure that the company complies with applicable laws and considers adherence to non-binding rules, codes and standards
tick The Board and each individual director should have a working understanding of the effect of the applicable laws, rules, codes and standards on the company and its business
Compliance risk should form an integral part of the company’s risk management process
tick The Board should delegate to management the implementation of an effective compliance framework and processes
       

Internal audit

   tick The Board should ensure that there is an effective risk based internal audit
tick Internal audit should follow a risk based approach to its plan
tick Internal audit should provide a written assessment of the effectiveness of the company’s system of internal controls and risk management
tick The audit committee should be responsible for overseeing internal audit
tick Internal audit should be strategically positioned to achieve its objective
       

Governing
stakeholder
relationships

   tick The Board should appreciate that stakeholders’ perceptions affect a company’s reputation
tick The Board should delegate to management to proactively deal with stakeholder relationships
tick The Board should strive to achieve the appropriate balance between its various stakeholder groupings, in the best interests of the company
tick Companies should ensure the equitable treatment of stakeholders
tick Transparent and effective communication with stakeholders is essential for building and maintaining their trust and confidence
tick The Board should ensure that disputes are resolved as effectively, efficiently and expeditiously as possible
       

Integrated
reporting and
disclosure

   tick The Board should ensure the integrity of the company’s Integrated report
tick Sustainability reporting and disclosure should be integrated with the company’s financial reporting
Sustainability reporting and disclosure should be independently assured