|
The directors and management of Bell Equipment are constantly
aware of the need to apply sound principles of corporate governance to all its
operations in South Africa and internationally. Bell Equipment sees its
compliance with the recommendations made in the King II Report as an essential
feature of the way it behaves as a responsible corporate citizen and an integral
part of Bell Equipment’s drive to become world-class. With this concerted
focus on implementing corporate governance best practice, Bell Equipment has
also given due consideration to the principles contained in the King III report
which was released in September 2009 with a view to implementing the
recommendations of this report and will make adjustments where necessary. It
appears from initial assessments that Bell Equipment already complies with most
of the substantive recommendations in this report.
An assessment of Bell Equipment’s compliance with the
recommendations made in the King II Report confirms that it substantially
complied with all material aspects of this report in 2009. It is the policy of
Bell Equipment that the board and management actively review and enhance Bell
Equipment’s systems of control and governance continuously and ensure Bell
Equipment’s business is managed ethically and within acceptable risk
parameters.
The following are aspects upon which additional and specific
comments are made:
|
|
|
| |
| Structure of the Board and
Committees |
|
The roles of the Chairman, who is an
executive director, and Chief Executive are distinct and there are currently
seven non-executive directors. Of these seven nonexecutive directors, four are
independent. The Risk Management and Audit Committee and the Nominations and
Remuneration Committee meetings throughout the year under review were chaired by
independent nonexecutive directors.
Bell Equipment has a unitary board which
meets at least four times per year. The size and diversity of the board is
considered appropriate to Bell Equipment. With the exception of the Chief
Executive all directors are subject to retirement by rotation every three years.
Bell Equipment’s Financial Director serves as an executive director on the
board.
In terms of the shareholders’ agreement
concluded between I A Bell and Company (Pty) Limited and John Deere Construction
and Forestry Company, these two principal shareholder parties are, in terms of
their current shareholding in Bell Equipment Limited, both entitled to nominate
three directors respectively. During the year under review an additional seat
for an independent nonexecutive director was created bringing the total number
of seats for independent non-executive directors to five. Of these five seats
available for independent non-executive directors, four are currently filled and
efforts are underway to recruit an additional independent non-executive director
to fill the remaining vacancy.
Non-executive directors are independent of,
and have unfettered access to management.
Newly appointed directors are briefed on
their fiduciary duties, their legal obligations and Bell Equipment’s history,
operations and key initiatives. If there are areas for strengthening the
performance of individual directors, suitable training will be considered.
The board of directors is ultimately
responsible for ensuring that Bell Equipment is a viable business and to this
end effectively controls Bell Equipment and its subsidiaries, monitors executive
management and takes all decisions that are material for this purpose. The board
has approved and regularly reviews Bell Equipment’s schedule of authorities
which allows for the clear segregation of duties within Bell Equipment.
|
| ...back
to top |
| |
| Company
Secretary |
|
The board considers the company secretary
qualified to perform his duties in accordance with applicable legislation and
fit and proper for the position. All directors have access to the company
secretary and are entitled to seek other independent professional advice with
regard to the performance of their duties. The company secretary ensures
compliance with applicable procedures and legislation and the removal from
office of the company secretary is a matter for the board as a whole.
|
| ...back
to top |
| |
| Directors’ attendance at meetings |
|
During 2009, the board met on five occasions, with attendance
recorded as follows:
| Executive |
| G W Bell |
5 out of 5 |
| H J Buttery (Chairman) |
5 out of 5 |
| K J van Haght |
5 out of 5 |
| D L Smythe* |
4 out of 4 |
| Non-executive |
|
| B W Schaffter |
4 out of 5 |
| D M Gage |
5 out of 5 |
| K Manning |
3 out of 5 |
|
Independent non-executive |
|
| J Barton** |
1 out of 1 |
| M A Mun-Gavin |
5 out of 5 |
| T O Tsukudu |
5 out of 5 |
| D J J Vlok |
5 out of 5 |
| Alternates |
|
| J W Kloet*** |
3 out of 3 |
* Resigned on 2 November 2009
** Appointed on 2 November 2009
*** Attending in the stead of B W Schaffter and K Manning
Mr Derek Smythe resigned as an executive director from the board
with effect from 2 November 2009, while Mr John Barton was appointed as an
independent nonexecutive director from the same date.
The responsibilities of the board include the consideration of
issues related to Bell Equipment’s strategy, business plans, annual budgets,
monitoring the financial and operational performance of group management and
other matters having a material effect on Bell Equipment or required by statute.
The board of directors conducts periodic reviews of its
performance and implements action plans to achieve strengthening and
effectiveness in areas which are identified in this process. The directors have
fully complied with their collective and individual obligations in terms of the
JSE listings requirements, inter alia with regard to disclosures and observance
of closed periods. Particulars of the composition of the board of directors and
its committees appear on pages 10 to 11 of this
report.
|
| ...back
to top |
| |
| Risk Management and Audit
Committee |
|
The Chairman of the Risk Management and Audit Committee is an independent
non-executive director and this committee only has independent non-executive
directors as members. This committee operates in terms of a formally approved
charter, which clearly sets out the terms of reference, roles and
responsibilities of committee members and one of its main tasks is to ensure the
maintenance of and, where necessary, review the effectiveness of internal
controls in Bell Equipment in view of the findings of the external or internal
auditors.
The charter of this committee has been redrafted in accordance with the
additional requirements applicable to audit committees brought about by the
changes to the South African Companies Act (the Act) and it has complied with
the terms of this charter. This committee performed (and was mandated to
perform) the following specific functions for the 2009 financial year:
- nominated for appointment the auditor of the company who, in the opinion
of this committee, is independent of the company;
- determined the fees to be paid to the auditor and the auditor’s terms of
engagement;
- ensured that the appointment of the auditor complies with the Act and any
other legislation relating to the appointment of auditors;
- determined the nature and extent of any non-audit services which the
auditor may provide to the company and its subsidiaries;
- pre-approved any proposed contract with the auditor for the provision of
non-audit services to the company or any of its subsidiaries;
- mandated to receive and deal appropriately with any complaints (whether
from within or outside the company) relating either to the accounting
practices and internal audit of the company or to the content or auditing of
its financial statements, or to any related matter; and
- performed other functions determined by the board.
This committee has confirmed the suitability of the head of Bell Equipment
Internal Audit function and the Financial Director of Bell Equipment. The
external auditors do not perform any internal audit functions, but may perform
certain non-audit services on a periodic basis. The Risk Management and Audit
Committee has set the principles, which have been duly confirmed by the board,
as well as the limitations for making use of the external auditors for non-audit
services.
Other areas that are reviewed include important accounting issues, pending
changes in legislation which will give rise to changes in practice, specific
disclosures in the financial statements and the publication of the interim and
annual reports, as well as reviewing Bell Equipment’s risk management
programme.
ATTENDANCE AT MEETINGS
During 2009, the Risk Management and Audit Committee met on five occasions,
with attendance being as follows:
| Members |
| M A Mun-Gavin
(Chairman) |
5 out of 5 |
| D J J Vlok |
5 out of 5 |
Certain senior executive managers attend meetings of the committee and all
directors are invited to attend its meetings and receive the committee papers.
The audit partner of Deloitte & Touche was invited and attended all meetings
of this committee during the year.
|
| ...back
to top |
| |
| Nominations and
Remuneration Committee |
|
Bell Equipment’s Nominations and Remuneration Committee, which also
operates in terms of a formally approved charter, is chaired by an independent
non-executive director and reviews and approves the remuneration of executive
directors and senior management in line with their individual contributions to
Bell Equipment’s overall performance.
It also reviews the skills, qualifications, suitability, calibre and
credibility of candidates, taking due consideration of diversity and skills, and
makes formal recommendations to the board for appointment of directors. All
members of this committee are non-executive directors and it is chaired by an
independent non-executive director. The committee met on three occasions in the
year, with attendance as shown below. This committee has complied with the terms
of its charter.
|
Members |
|
D J J Vlok (Chairman) |
3 out of 3 |
|
T O Tsukudu |
3 out of 3 |
|
D M Gage |
3 out of 3 |
Certain senior executive managers attend each meeting of the committee.
Bell Equipment’s remuneration philosophy and strategy with regard to
employees and executive directors are refl ected in the Remuneration section of this
report on page 37.
Independent non-executive directors receive basic annual retainers, similarly
based on market surveys, but the bulk of their remuneration comes from
attendance fees for meetings that they attend. The independent non-executive
directors who chair board subcommittees receive a fee premium for this
additional responsibility.
The non-executive directors and their alternates who are appointed by John
Deere in terms of the shareholders’ agreement with I A Bell and Company (Pty)
Limited have elected not to receive remuneration for their services.
Details of the remuneration paid to directors of Bell Equipment are fully
disclosed on page 93 of the financial statements.
|
| ...back
to top |
| |
| Stakeholder Communication |
|
The board is committed to the principles of openness, integrity and
accountability, and to providing timely, relevant and meaningful reporting to
all stakeholders.
Bell Equipment holds annual conferences with its external business partners
(principally suppliers, customers and dealers) and uses this opportunity to
communicate its plans for the year ahead so that these stakeholders are fully
apprised of Bell Equipment’s expectations and requirements. At the same time
Bell receives valuable feedback from its customers with regard to its products
and services and where these can be improved. No one individual has unfettered
powers of decision making.
Bell Equipment produces annual and interim reports as required and publishes
these on Bell Equipment’s investor relations website (www.bellir.co.za).
Bell Equipment’s external website (www.bellequipment.com)
is an important means of effectively communicating with all stakeholders –
keeping them abreast of developments within Bell Equipment and providing
essential information relating to Bell Equipment and its operations. Bell
Equipment produces an annual employee report and has other regular
communications with employees.
The Bell Equipment Intranet also plays an important role in keeping its
employees around the world informed of Bell Equipment’s activities and
facilitates communication amongst its various operations.
|
| ...back
to top |
|
| Code of ethics and
Code of business conduct |
|
Bell Equipment has a code of ethics which commits Bell Equipment and its
employees to the highest standards of ethical and professional integrity and has
the full commitment of the board of directors and the Chief Executive. This code
has been effectively communicated to all Bell Equipment operations worldwide and
covers the interactive relationships between Bell Equipment, its directors,
management and employees amongst themselves and outside stakeholders, customers,
shareholders and society at large.
This code of ethics has been augmented by a code of business conduct, which
has recently been approved by the board and is applicable to all Bell Equipment
employees worldwide. This code deals with a number of aspects and provides a
broad framework on how different stakeholders must be engaged and prescribes the
ethical standards to which employees are expected to adhere.
Bell Equipment realises the importance of a facility for the reporting of any
unethical or improper actions and Bell Equipment has, in conjunction with
Tip-Offs Anonymous, established a reporting facility that is available 24 hours
a day. All stakeholders are encouraged to report any unethical and improper
behaviour via this facility. More information on this reporting facility is
available from Bell Equipment’s official external website.
|
| ...back
to top |
| |
