Board mandate

Unitary board structure

The balance of strategic financial, commercial and healthcare skills on the Board provides a mix of perspectives that bring sufficient depth and independence to our strategic leadership and oversight responsibilities.

- JM Kahn, non-executive Chairman

Non-executive directors are re-elected every three years.

Compliance

We are committed to and fully endorse the principles of good corporate governance recommended by King III, and set out in the JSE Listings Requirements. Voluntary codes such as the United Nations Global Compact and the recommendations of the Organisation for Economic Co-operation and Development are also considered.
  • The Group has complied with the amended JSE Listings Requirements.
  • The Group has applied all the King III principles.
  • IT governance is properly managed and aligned to business needs and strategy.

We have reviewed King IV and will ensure appropriate reporting in 2017. Our combined assurance framework is being revised to align to the five-level combined assurance model introduced in King IV.

All business units, departments and subsidiaries are required to comply with all applicable legislation and regulations. The legislative landscape is proactively monitored and the Board is kept informed of regulatory changes and non-binding standards, codes and relevant sector developments that could potentially affect the Group. Where required, changes are implemented within defined timelines.

Compliance risk is monitored by the Risk Committee and managed through the compliance framework. During 2016, a governance, compliance, legislative and contractual risk review was undertaken in each business. The review also evaluated the full regulatory environment impacting the Group and the healthcare sector in SA.

Netcare was not subject to any material penalties, fines or criminal prosecutions during the reporting period.

The Group is suitably resourced to manage legal proceedings, claims and actions instituted against it. The Board is of the opinion that there is no legal action that will materially affect the operations of the Group.

Accountability and control

An appropriate system of internal controls is maintained to safeguard and manage Netcare’s assets, minimise losses arising from fraud and/or other illegal acts, and fairly present financial and operational information. Group Internal Audit fulfils an assurance and consulting function, and is mandated to provide independent and objective assurance over this system of internal controls. Group Internal Audit’s activities provide assurance to our stakeholders that Netcare operates in a responsible manner.

Responsibilities

  • Drives Netcare’s strategy.
  • Accountable to shareholders and other stakeholders for the performance of the Group.
  • Provides effective leadership based on an ethical foundation of responsibility, accountability, fairness and transparency.
  • Endeavours to ensure that Group strategy, risk, performance and sustainability are managed in an integrated way that creates sustainable value for the Group and its stakeholders.
  • Instructs and oversees the organisation’s management and control structure.
  • Sets performance goals, and manages and monitors their achievement.
  • Delegates responsibility for economic, environmental and social issues to governance committees and reviews the management of these issues.

Key activities in 2016

  • Approved the refined strategy for SA.
  • Facilitated the changes required to align to the amended JSE Listings Requirements.
  • Ensured effective governance and risk management processes.
  • Reviewed executive performance and the adherence of governance committees to their Board-approved terms of reference.
  • Ensured that consideration was given to succession planning at Board level.
  • Monitored stakeholder engagement.
  • Considered the restructuring of the rental agreements for 35 BMI Healthcare hospitals in the UK.
  • Considered investment proposals to address growth.
  • Actively contributed to and participated in HMI.

Succession planning

The average age of the Board is 58; therefore succession planning is a key focus area to ensure that skills are retained following the retirement of older members. We seek to balance fresh perspectives from newer members with the experience and institutional knowledge of those with longer tenures.

Evaluation

The performance of the Board, its committees and individual directors is assessed through an internal process overseen by the Chairman’s Forum. Assessments cover the governance of economic, environmental and social issues. The last assessment took place in November 2014 and confirmed that the Board and its committees were operating effectively. In 2015, focus was placed on Board succession planning and an appropriate commitment to diversity, and resulted in the appointment of two directors and Deputy Chair, Thevendrie Brewer. To allow for the appropriate integration of the new Board members and Deputy Chair, the next Board assessment was scheduled for November 2016. An abbreviated evaluation review was proposed to assess individual director performance based on a series of metrics that focus on both personal and substantive issues. The findings will be reviewed in 2017.

The Board and governance committees fully complied with their terms of reference during 2016.

Skills

The Board possesses a wide range of expertise and experience.