Our Approach to Governance

Governing structure and delegation

Hulamin views the implementation of good governance practices as integral to its business and recognises the need to conduct its business with openness, integrity and accountability.

The board has delegated, through formal terms of reference, specific matters to a number of committees whose members and chairman are appointed by the Board. There is full disclosure of matters handled by the committees to the Board.

The committees play an important role in enhancing high standards of governance and achieving increased effectiveness within the group. For further information on the core responsibilities and composition of our committees refer to our separate Governance Report available on our website.

In driving the strategy the Executive Committee’s overarching trade-off has been against the objective of generating free cash flow. Below is further context to the considerations the Executive Committee had to make during the 2018 financial-year.

Generating free cash flow to build capability in preparation for a high growth, innovative and green group portfolio 
Understanding the trade-off  The trade-offs made in 2018 
Generating free cash flow for future investment requires forgoing of a myriad of short-term benefits and investment decisions to maximise cash generation. The Executive Committee has needed to make decisions during the current financial year that are cash conscious to ensure that sufficient free cash flow is generated to implement the strategic objectives as set out by the Board.  Improved capital discipline has resulted in lower allocation of funding to manufactured capital. The Executive Committee continues to monitor the performance, age and obsolescence of our manufactured capital to ensure that sufficient capital is made available to maintain operations in the short-term whilst building for new capabilities.

Investment in a working capital optimisation programme has had negative earnings impact during the current financial year but has assisted in unlocking free cash flow. Through the programme the Executive Committee has made decisions regarding optimal safety stock levels, discounts foregone from early settlement discounts and discounts given to our customers.

The Executive Committee believes our people are key to our success and has not traded the skills and expertise of our workforce to improve future free cash flow generation. 
R800 million cumulative free cash flow generated  Related capitals: 
Our strategic intent is further detailed here in this report. 

The Board at a glance 

  Year of appointment  Age  Audit  Risk and SHE*  Remuneration and Nomination  TSE^  Chairman’s Committee 
Independent non-executive directors             
ME Mkwanazi (Chairman)1  2007  64    Member  Member    Chairperson 
TP Leeuw (Chairman)1  2007  55  Chairperson3  Member  Member    Chairperson 
CA Boles  2016  49  Member6    Member     
RL Larson  2017  63    Member7       
N Maharajh  2016  52  Chairperson4  Member10      Member10 
NNA Matyumza  2010  55  Member    Chairperson    Member 
Dr B Mehlomakulu  2016  46    Member8    Member9   
AT Nzimande2  2017  48        Member   
PH Staude  2007  65    Chairperson      Member 
GHM Watson  2011  67    Member  Member    Member 
Non-executive directors               
VN Khumalo  2006  56        Chairperson  Member 
SP Ngwenya  2007  65        Member   
GC Zondi (Alternate) 2016  45           
Executive directors               
RG Jacob (CEO) 2010  53    Member    Member   
AP Krull (CFO) 2016  44    Member       
MZ Mkhize  2007  57    Member       
Directors ages are quoted as at 31 December 2018 
* Safety, Health and Environment. 
^ Transformation, Social and Ethics
1 ME Mkwanazi resigned as Chairman of the Hulamin Board with effect from 30 April 2018, and TP Leeuw was appointed Chairman with effect from 1 May 2018.
2 AT Nzimande resigned with effect from 30 June 2018 from the Hulamin board.
3 TP Leeuw resigned as Chairman of the Audit Committee with effect from 30 April 2018. 
4 N Maharajh was appointed Chairperson of the Audit committee with effect from 1 May 2018. 
5 TP Leeuw was appointed as a member of the Remco with effect from 1 May 2018. 
6 CA Boles was an invitee to the Audit Committee up to 30 April 2018, and appointed as a member of the Audit Committee with effect from 1 May 2018.
7 RL Larson was appointed as a member of the Risk and SHE Committee with effect from 1 April 2018. 
8 Dr B Mehlomakulu was appointed as a member of the Risk and SHE Committee with effect from 1 April 2018.
9 Dr B Mehlomakulu was appointed as a member of the TSE Committee with effect from 1 September 2018. 
10 N Maharajh was appointed as a member of the Risk and SHE Committee and the Chairman’s Committee with effect from 1 May 2018. 

The Transformation, Social and Ethics Committee

The Transformation, Social and Ethics Committee’s key responsibilities are:

  • Recommend to the Board the strategies and policies to be adopted to ensure the group’s Transformation, Social and Ethics targets are achieved.
  • Align the group’s Transformation, Social and Ethics strategy with its overall business strategy.
  • Monitor the implementation and efficacy of the employment equity, black management development, black equity ownership, preferential procurement, skills and enterprise development and socio-economic initiatives of the group.
  • Monitor activities relevant to social and economic development, good corporate citizenship, environment, health and safety and consumer relationships.
  • Review policies and statements on ethical standards, the code of conduct for suppliers and service providers and on whistle-blowing.

Key areas of focus of the committee during the reporting period are set out in Annexure A of the AGM notice.

Key areas of future focus will be to monitor the implementation of the transformation plan.

Further details on this, and other committees, can be found in our governance report at www.hulamin.co.za

VALUE CREATION THROUGH GOVERNANCE

 

For page 36 click here

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