Home / Governance / Policies

Policies

Wescoal’s Board of Directors supports the principles of the code of corporate practices and conduct contained in thereport of the King Commission on Corporate Governance for South Africa (“the Code”), King III and acknowledges theimportance of sound corporate governance and the guidelines set out in the Code.

Statement of compliance

The Listings Requirements of the JSE require that companies report on the ex tent to which they comply with the principlesincorporated in the Code. The Code recommends that the Chairperson be an independent Non-executive Director. It isthe Board’s opinion that as the Chief Executive Officer and the Executive Chairperson’s roles are separate; there is a cleardivision of responsibilities at the head of the Company, which ensures a balance of power and authority, such that no oneindividual has unfettered powers of decision-making.

The Chairperson

The Non-executive Chairperson is Robinson Ramaite. The Board delegates to the Chairperson responsibility forensuring the effectiveness of governance practices. He leads the Board and is responsible for representing the Board toshareholders. As required in terms of the Listing Requirements of the JSE, the role of the Chairperson is separate fromthat of the Chief Executive Officer.

The Board

The Board retains full and effective control over the Company. Apart from regular meetings, additional meetings arearranged when necessary to review strategy, planning, operations, financial performance, risk and capital expenditure,human resource and environmental management. The Board is also responsible for monitoring the activities of theexecutive management.

Composition of the Board

The Board comprises two Executive Directors and four Non-executive Directors. The Non-executive Directors are free tomake their own decisions and judgements. They enjoy no benefits from the Company for their services as Directors otherthan their fees and potential capital gains and dividends on their interests in ordinary shares and options.The Non-executive Directors are high calibre professionals and sufficient in number for their views to carry significantweight in the Board’s deliberations and decisions. The guidelines contained in the Listings Requirements of the JSE wereused to test the category most applicable to each Director.

Board Committees

While the Board remains accountable and responsible for the performance and affairs of the Group, it is assisted in the discharge of its duties by a number of sub-committees as follows:

The Executive Committee

The Executive Committee (“EXCO”) comprises two Executive Directors, together with the Directors of the different business units. The EXCO, which is responsible for the daily running of the Group, regularly reviews current operations in detail, develops strategy and policy proposals for consideration by the Board and then implements its directives. The Board has also established a number of standing committees on which only the Non-executive Directors serve and to which EXCO members are invited. The Chairperson liaises on a regular basis with the Chief Financial Officer and the Chief Executive Officer, with regard to matters raised and to be raised at committee meetings. Four EXCO meetings were held during the year.

The Audit Committee

The Audit Committee is responsible for monitoring and reviewing:

•	the effectiveness of the Group’s information systems and other systems of internal control;
•	the effectiveness of the internal audit function;
•	the reports of both the ex ternal and internal auditors;
•	the annual report and specifically the annual financial statements included therein;
•	the accounting policies of the Group and any proposed revisions thereto;
•	the ex ternal audit findings, reports and fees and the approval thereof; and
•	compliance with applicable legislation and requirements of regulatory authorities.

The external auditors have unrestricted access to the Audit Committee and its Chairperson with a view to ensuring that their independence is not impaired. The Audit Committee is satisfied that the external auditor was independent of the Company. The Audit Committee confirmed that it has satisfied itself with the appropriateness of the expertise and experience of the Financial Director. Although not currently compliant, the Board acknowledges that the Companies Bill 61 of 2008 and King III require that the Audit Committee comprises at least two Independent Non-executive Directors with the Chairman of the Audit Committee being independent of the Chairman of the Board. Three Audit Committee meetings were held during the financial year ended 31 March 2011.

The Remuneration Committee

The Remuneration Committee establishes the Group’s remuneration philosophy and reviews the terms and conditions of employment of the Executive Directors and other executives, as well as incentive schemes. Two remuneration committee meetings were held during the financial year under review.

The Remuneration Committee is mandated to:

•	review the Chairman’s and Directors’ fees as well as the remuneration packages of the CEO andsenior executive;
•	undertake an annual performance assessment as the basis for annual salary adjustments;
•	oversee the decisions and implementation procedures of the CEO as these pertain toremuneration policies;
•	avail itself of the advisory services of independent consultants as may be required in the areas ofoperations and strategy with respect to all issues and policies relating to remuneration;
•	oversee talent management, succession and development planning for key positions;
•	monitor and measure Key Performance Areas and the respective individual Key PerformanceIndicators of senior managers and Directors; and
•	monitor incentive and share schemes.

During the review period, the committee continued to consider remuneration policies and packagesof the Executive Directors and persons discharging managerial responsibilities. Specific attention wasdedicated to the fee structures of consultancies and business advisors hired in the processes of theoperations, compliance and risk divisions.

The knock-on effect of the global economic crisis negatively affected national, regional and localeconomies, compounding the impact on the business sector. With this in mind and bearing in mindthe poor results posted, the Remuneration Committee decided that no salary increases would bepassed for Executive Directors.

Adjustments were made in four exceptional cases at senior management level, based on increasedresponsibilities and outstanding performance beyond the call of duty.The Remuneration Committee supported the CEO’s recommendation to pass a six percentadjustment by way of the annual staff salary increase. This is in keeping with the mining sector’saverage position and takes adequately into consideration cost of living. The decision was ratified bythe Board of Directors.

No incentives or share issues were passed.

Non-executive Directors and the Chairman of the Board will, in the new financial year, receive amodest increase in their fees, roughly in line with inflation. This decision was taken with a view toaligning fees with the broader board fee standards prevalent in the country, applicable to JSE listedjunior companies, since Wescoal was found to be lagging behind.

Future priorities

•	The committee will forthwith call individual performance assessment sessions with members ofexecutive management;
•	The appointment of a reputable, well established Human Resource consultancy was proposedby the Remuneration Committee and approved by the Board;
•	Cognisance was taken of the changing remuneration landscape and the need to attract new talentin the fields of operation, for the purposes of defining changes to the remuneration philosophyand policies going forward;
•	Attention will be paid to the succession strategy and plan, specifically for the CEO position,based on a five year horizon;
•	The need to secure an expanded competitive position through reinforced leadership capabilitywill be actioned;
•	The Remuneration Committee will continue to ensure that reward packages remain appropriatelycompetitive, provide an incentive for performance, and include due regard of the culture, values,business objectives and corresponding strategies and risk management of the Company.

The Company Secretary

CIS Company Secretaries (Pty) Ltd was appointed as company secretary on 9 April 2010. The company secretary is responsible for providing the Board collectively, and each Director individually, with detailed guidance on the discharge of their duties and responsibilities in terms of the specific legislation, regulatory requirements and best practice.

Appointments to the Board

The Board has adopted a policy setting out the procedures for appointments to the Board. Such appointments are formal and transparent and a matter for the Board as a whole. Wescoal made no changes to the Board during the financial year under review.

Retirement and re-election of Directors

In terms of the Memorandum of Incorporation (“MoI”), Directors shall retire at the first annual general meeting of the Company, and thereafter one-third of the Directors shall retire. Directors are subject to election by shareholders at the first opportunity after their initial appointment. The names of all the Directors submitted for re-election are accompanied by brief biographical details to enable shareholders to make an informed decision in respect of their election. In terms of the Company’s MoI, the Directors retire at the age of 75 years.

Share dealings

The Group has a written policy in place where the dealings of Directors are regulated and monitored, and disclosure is made as required in terms of the Listings Requirements of the JSE. This policy is monitored by the company secretary. No trading by Directors is authorised without clearance being first received from the CEO. Should the CEO wish to trade in his shares, clearance must be obtained from the Board prior to any dealing. This policy is reviewed and updated from time to time to ensure that it is compliant with any changes in legislation and regulation.

Relations with shareholders

The Company maintains dialogue with its key financial audiences, especially institutional shareholders and fund managers. Presentations take place at the time of publishing interim and final results. The Company’s website provides the latest as well as historical financial and other information, including the financial reports, and is regularly updated. The Board encourages shareholders to attend its annual general meeting, notice of which is contained in this annual report, where shareholders have the opportunity to put questions to the Board.