The Namibia Breweries Limited Board is committed to the highest standards of corporate governance. Namibia Breweries Limited is subject to all legislation in Namibia as well as the listing requirements of the Namibia Stock Exchange (NSX). The NSX requires NBL to comply with the NamCode which is based on the principles of the King III recommendations and Namibian legislation.
The board is responsible for reviewing and evaluating NBL’s strategic goals, agreeing on performance indicators, and identifying key risks. The senior leadership team, which also includes Executive Directors, is charged by the board with the implementation of all the strategies and objectives of NBL. The Board also holds management accountable for their activities, which are monitored and controlled through regular reports and performance measurements.
The Board of directors
The NBL Board of Directors’ governance philosophy entails keeping the Chairman’s and Chief Executive Officer’s responsibilities separate, as recommended by King III and the NamCode.
NBL Directors are appointed based on their experience, competency, leadership skills and strong business ethics, and it is these attributes that are regarded as the main criteria for appointment. The Board currently consists of two Executive Directors and eight Non-executive Directors, with two alternate Directors.
New Directors are taken through a tailored induction programme that not only briefs them on their duties, but also gives them a thorough understanding of the operations, listing requirements, codes of conduct and other relevant principles according to which the Board and NBL operates. The Board believes that it currently holds an appropriate balance of skills, collective experience, knowledge and skills to operate dynamically and effectively.
There are procedures which ensure that all Directors are obliged to declare any potential conflict of interest before any Board or any other Committee meeting. Directors are required to avoid any direct or indirect interest that conflicts or may conflict with the company’s interest.
The Board of Directors discharges its responsibility through a Board Committee, a Remuneration and Nominations Committee, an Audit Committee, and a Risk Committee. Each of these Committees has a charter which governs its authority. The Audit and Risk Committees meet at least three times a year, while the Remuneration and Nominations Committee meets whenever necessary.
Mr Sven Thieme was re-elected as the Chairman of the Board at the prior year’s Annual General Meeting. Mr Hendrik van der Westhuizen and Mr Graeme Mouton are the two Executive Directors serving on the Board of Directors. At the Annual General Meeting (AGM) held on 18 November 2016, three Directors resigned from the Board, but made themselves available to be re-elected for the next term. All Directors were re-elected by majority vote.
Remuneration and Nominations Committee
The Remuneration and Nominations Committee is a formal NBL Board Sub-committee. During the year, the Remuneration and Nominations Committee held 1 meeting on 3 March 2016.
Composition of the Committee:
For the year ended on 30 June 2016, the following Non-executive Directors were members of the Committee:
The Chairman, Managing Director and the Manager for Human Capital are also invited to meetings in an advisory capacity, except when their own remuneration is discussed. From time to time, independent remuneration consultancies are instructed to provide advice on executive remuneration matters to the Committee. The Committee’s responsibilities are set out below and are in its terms of reference, as approved by the Board.
To monitor the Company’s remuneration policy, including policies relating to:
Parameters used in determining senior leadership remuneration scales
Executive remuneration, including remuneration packages for Senior Management
The structure of the remuneration of Executive Directors, Non-executive Directors, the Chairperson and, where applicable, Board Committee members
The design of Executive incentives, inclusive of the Board criteria on which performance-related elements are based with regard to the trading period, if applicable, and Senior employee recruitment, retention and termination.
To ensure that there is a formal, transparent and objective method to recommend to shareholders regarding Director remuneration packages, including pension benefits.
To ensure that the fees paid to Non-executive Directors are a fair reflection of the contribution they make to the company.
To advise on, and monitor a suitable performance-related formula, inclusive of the Board criteria on which performance related elements are based with regard to the trading period, if applicable, and
To separate the review and recommendation of Non-executive fees from the review and recommendation of Executive remuneration, each with its own motivation and basis for the recommendation.
To ensure a formal and transparent process for the appointment of new Directors to the Board.
The tenure of Non-executive Directors on the Board, and
The reappointment of any Non-executive Director at the conclusion of his or her specified term of office
Approve and, if in the interest of the company, ensure that all employment agreements between the company and the Directors are limited to three- or five year periods, if applicable, provided such agreements are renewable
Action any other duties or responsibilities expressly delegated to the Committee by the Board.
The Audit Committee oversees the internal control and policy function. The Committee is chaired by Mr Habo Gerdes, a Non-executive Director. Mr Peter Grüttemeyer (O&L’s Chief Executive Officer) and Erik van Lokven (Heineken) who are also Non-executive Directors. The external and internal auditors, the Finance Director, and the Managing Director attend Audit Committee meetings by invitation. The Committee invites other members of Management as required. The auditors, both internal and external, attended all Audit Committee meetings during the year.
The Audit Committee is responsible for reviewing financial information and shareholder reporting, including:
monitoring the integrity of financial statements and making recommendations to the Board
ensuring integrated reporting takes place
reviewing and approving the external audit plan and proposed fees
reviewing and monitoring the internal audit plan
monitoring the effectiveness of the risk management process, including fraud and corruption, information-technology-related items, and compliance with risk standards adopted by the Group
monitoring the effectiveness of the Group’s system of internal controls
reviewing the Group’s policies and practices concerning business conduct and ethics, including whistle blowing reports received via the Tip-offs anonymous hotline, and
reviewing internal and external audit reports and monitoring corrective action performed.
The Risk Committee which consists of Executive Directors Mr H Van der Westhuizen and Mr G Mouton, as well as key senior leaders from NBL; reports to the Audit Committee. The Group Risk Manager also serves on this Committee.
The Committee regularly evaluates the company’s exposure and responses to significant business, operational, strategic and financial risks. The Directors are ultimately responsible for the company’s risk management system. The system is designed to manage risk rather than to eliminate it. On a monthly basis, risks are identified, assessed and discussed within the different business functions. These risks are closely managed, monitored and mitigated. The key risks are reported with their respective mitigation plans at each Board meeting as well as at Audit Committee meetings and monthly Business Review meetings.
NBL has a robust controls review process in place. Testing whether the business complies with internal control procedures and policies is achieved by continuous management reviews, a review of internal financial controls, and a review of external parties providing internal audits. Experienced and qualified employees are appointed as control champions throughout the business functions in order to review and evaluate financial as well as technical controls. Any deficiencies are recorded, monitored regularly, and reported to the senior leadership team. This has proven to be a very successful approach to critically evaluate and improve internal control policies and procedures. The internal audit function was outsourced to the auditing firm Ernst & Young. The internal audit programme is founded on a three year risk-based approach. The internal audit plan is reviewed on a regular basis by the NBL Compliance function.
All findings and recommendations are recorded on a tracker and closely monitored by Management. The Risk and Compliance Department is responsible for ensuring that corrective actions are taken and recommendations implemented. Ernst & Young also performs internal follow up audits and reports independently from the Audit Committee and to Management as regards their own findings and the recommendations based thereon. Both the internal and external auditors have unlimited access to the Chairperson of the Audit Committee.
There is a strong drive within NBL to uphold the highest technical and operational standards. Fire and safety policies and procedures are reviewed and tested on a regular basis so that they continue to be compliant with the highest standards. Each Manager within his/ her function is evaluated constantly on the health and safety ratings achieved during these audits. By strictly following this programme, NBL has managed to improve its health and safety standards not only for staff, but also with respect to contractors, suppliers and other providers of service to NBL.
For the last three years, an annual insurance audit has been performed by Alexander Forbes Insurers. The main plant is audited on an annual basis, while depots are audited on a rotational basis. The reporting year saw the Tsumeb, Otjiwarongo and Ruhr Street depots audited. NBL is proud to have maintained its five-star rating – being the highest awarded.
Stakeholder communication, ethics and the Tip -offs Anonymous hotline
NBL engages with its stakeholders on a regular basis. Its interim and final results are announced at analyst presentations. These results are also available on the NBL website and are published in local newspapers. The Audit Committee is responsible for embedding a culture of high ethical standards. Employees have several means to them available to raise their concerns and make recommendations or obtain feedback from the senior leadership teams.
NBL holds a workplace forum within the different functions on a weekly or bi-weekly basis. At these forums, our staff have the opportunity to discuss matters of concern to them. If an employee is not comfortable with airing his or her views at these forums, they can contact the Tip-offs Anonymous hotline. The hotline is administrated by an independent service provider; Deloitte. This is supported by communication of our core value: We do the right things right.
All Directors may seek independent advice at company expense under appropriate circumstances in the discharge of their responsibilities. The Company Secretary is responsible for verifying that all Committees comply with statutory, regulatory and NSE listing requirements. Directors have access to the Company Secretary at all times.