Good corporate governance is fundamental to the success of any organisation and NBL is no exception to this rule. The NBL Board of Directors is committed to corporate governance and has put processes in place to ensure that NBL continuously strives to achieve Namibian and international best practice. The following report outlines the way in which Directors control and govern the Company.
NBL has to comply with all applicable Namibian legislation as well as the Listing Requirements of the Namibian Stock Exchange (NSX). The NSX requires NBL to comply with the Corporate Governance Code for Namibia (NamCode), which is based on the principles and recommendations of South Africa’s 2009 King Report on Corporate Governance (King III) as well as Namibian legislation. NBL has started a process to evaluate compliance with the new King IV Report on Corporate Governance™ for South Africa, 2016 (King IV™)1 with the intention to align governance structures, practices and disclosures to these requirements in future.
|1||Copyright and trademarks are owned by the Institute of Directors in Southern Africa NPC and all of its rights are reserved.|
The NBL Board believes that, while best recommended practice is being applied, further enhancements will be made over time in line with its objective to continuously improve corporate governance.
All members of the Board have a fiduciary responsibility to represent the best interests of NBL and all its stakeholders. The key purpose of NBL’s Board is to ensure the Company’s prosperity by collectively directing its affairs, while considering the appropriate interests of its shareholders and other stakeholders. In addition to business and financial issues, the Board deals with challenges and opportunities relating to corporate governance, corporate social responsibility and corporate ethics.
The Board currently consists of two Executive Directors and eight Non-executive Directors, with two alternate Directors.
Read more about the Directors in their profiles.
|*||Resigned 31 August 2019.|
|**||Resigned 30 June 2019.|
The NamCode recommend that the majority of Directors be independent. In this regard, the NBL Board continues to depart from the recommendation in respect of the number of independent Directors serving on NBL’s statutory committees. NBL Directors, including the Chairperson of the Board, continue to be 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 responsibilities of the Chairperson and the Managing Director remain separate, as recommended by the NamCode. In discharging their responsibilities, and under appropriate circumstances, all Directors are entitled to seek independent advice at NBL’s expense.
Established procedures require all Directors to inform the Board timeously of any actual or potential conflicts of interest they may have in relation to particular aspects of the business. Directors are obliged to recuse themselves from discussions or decisions on matters in which they have a conflict of interest or a potential or perceived conflict of interest. In general, Directors are required to avoid any direct or indirect interest that conflicts or may conflict with the Company’s interest.
Mr Sven Thieme was re-elected as Chairperson of the Board at the prior year’s Annual General Meeting (AGM) held on 27 November 2018.
To assist the Board with properly discharging its duties, it delegates certain functions to the various Board Committees and to the Senior Leadership Team. Each Board Committee acts within agreed, written terms of reference. The minutes of Board Committee meetings are provided to the Board.
The Company Secretary is responsible for verifying that all Board Committees comply with statutory, regulatory and NSX Listing Requirements and best practice. Directors have access to the Company Secretary at all times.
The various established Board Committees are set out below.
The Senior Leadership Team is charged with implementing the Company’s strategies and objectives. This team is also responsible for ensuring that internal controls are in place and function effectively so that the Company can operate and mitigate risk to its operations.
The Board holds the Senior Leadership Team accountable for their activities, which are monitored and controlled through regular reports and performance measurements.
Attendance at Board and Committee meetings was as follows:
|*||Via teleconference||P = Present|
|**||By invitation||A = Apologies|
|#||Committee member but not a Board member|
The Audit Committee is comprised of the following three members:
- H-B Gerdes (Chairperson)
- P Grüttemeyer (O&L representative)
- E van Lokven (Heineken representative)
The NBL Audit Committee continues to depart from the NamCode recommendation in respect of the number of independent Directors serving on the Committee. The Audit Committee members, including the Chairperson, are appointed based on their experience, competency, leadership skills and strong business ethics. These attributes are regarded as the main criteria for appointment.
The Committee’s terms of reference, as set out in an Audit Committee Charter and approved by the Board, is to review the Company’s financial statements, the appropriateness of the Company’s accounting and disclosure policies, compliance with International Financial Reporting Standards, and the effectiveness of internal controls.
The Committee considered and recommended an Internal Audit Charter for approval by the Board.
The Company’s external and internal auditors, Finance Director and Managing Director attend Audit Committee meetings by invitation. The Committee invites other members of the NBL Senior Leadership Team as required. The auditors, both internal and external, attended all Audit Committee meetings.
The Audit Committee’s roles include:
- Monitoring the integrity of financial statements and making recommendations to the Board
- Ensuring that integrated reporting takes place
- Reviewing and monitoring the internal audit plan
- Reviewing internal and external audit reports and monitoring that corrective actions are performed
- Providing a communication channel between the Board, the internal and external auditors and other assurance providers
- Assisting the Board, in conjunction with the Management Risk Committee, to monitor the effectiveness of the risk management process for risks such as information technology-related items, fraud and corruption, and compliance with risk standards adopted by the O&L Group
- Reviewing NBL’s policies and practices concerning business conduct and ethics, including whistleblowing reports received via the Tip-offs Anonymous hotline
- Assisting the Board to discharge its responsibility to:
- safeguard NBL’s assets;
- operate adequate and effective systems of internal control, financial risk management and governance;
- review financial information and shareholder reporting;
- monitor compliance with laws and regulations; and
- provide oversight of the external and internal audit functions and appointments.
The Board is satisfied that the Committee has complied with its legal, regulatory or other responsibilities.
Remuneration and Nomination Committee
The Committee is comprised of the following members:
- R Pirmez (Chairperson and Heineken representative)
- P Grüttemeyer (O&L representative)
- B Mukuahima (O&L representative)
The Remuneration and Nomination Committee’s main responsibilities, as set out in its Board-approved terms of reference, include monitoring the appropriateness of the Company’s Remuneration Policy and ensuring that a formal and transparent process exists in respect of appointing new Directors to the Board. In fulfilling this function, the Committee is required to:
- assess the necessary and desirable competencies of prospective Board members based on merit and objective criteria. In doing so, candidates from a wide range of backgrounds are to be considered, in keeping with the dynamics and diversity of the country;
- review Board nominations from shareholders and provide recommendations to the Board in respect of these nominations;
- ensure that, on appointment to the Board, Non-executive Directors receive a formal letter of appointment setting out clearly what is expected of them in terms of their time commitment, Committee service (if any) and involvement outside Board meetings;
- define and implement procedures for the annual statement of disclosure of any conflict of interest and the annual statement of compliance;
- give full consideration to succession planning in the course of its work, taking into account the challenges and opportunities facing the Company and, therefore, what skills and expertise are needed on the Board in the future;
- keep under review the structure, size and composition (including the skills, knowledge and experience) of the Board, and make recommendations to the Board regarding any changes, subject to the provisions of the Company’s Articles of Association and the Namibia Companies Act, 2004;
- consider and, if appropriate, make recommendations to the Board regarding 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; and
- action any other duties or responsibilities expressly delegated to the Committee by the Board.
Read more about remuneration.
Management Risk Committee
The Management Risk Committee has an independent and advisory role with accountability to the Audit Committee. The purpose of the Management Risk Committee is to assist the Board of Directors to fulfil its responsibilities relating to:
- the governance of risk;
- the assessment and review of credit, market, fiduciary, liquidity, reputational, operational, fraud, strategic, technology, data-security and business-continuity risks; and
- monitoring the overall risk profile.
The Directors who serve on the Management Risk Committee are ultimately responsible for the Company’s risk management system. The system is designed to manage rather than eliminate risk. Every month, risks are identified, assessed and discussed within the different business functions. These risks are closely managed, monitored and mitigated. Reports on the top key risks, along with their respective mitigation plans, are delivered at each Board meeting as well as at Audit Committee meetings and monthly business review meetings. The minutes of this Committee are also made available to and discussed at Audit Committee meetings.
The Management Risk Committee comprised of:
- M Wenk (Chairperson)
- W von Lieres
- NBL Senior Leadership Team
- O&L Head Group Risk Manager
No undue, unexpected or unusual risks were taken in the past year and no material losses were experienced as a result of these risks. The Board is satisfied with the effectiveness of the Company’s risk management processes.
NBL’s internal controls are designed and operated to support the identification, evaluation and management of risks and strategic opportunities affecting the Company, as well as the business environment in which it operates. Internal control systems are in place to provide the Senior Leadership Team and the Board with reasonable assurance as to the integrity and reliability of the financial statements.
Continuous management reviews, a review of internal financial controls and a review of external parties providing internal audits test whether the business complies with internal control procedures and policies. Experienced and qualified employees are appointed as control champions throughout the business functions 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 evaluating and improving internal control policies and procedures. The internal audit function was outsourced to the auditing firm EY. The internal audit programme is founded on a three-year risk-based approach. The internal audit plan is approved by the Audit Committee and regularly reviewed by the Risk and Compliance department.
During the reporting year, the following internal audits were performed:
- Treasury and Revenue
- Fixed Asset Accounting
- Procure to Pay
- Hire to termination and Leave
- Payroll Management
- Corporate Governance
- Quality Control
- Follow-up audits
All findings and recommendations are recorded on an audit tracker and closely monitored by the Senior Leadership Team.
The Risk and Compliance department is responsible for ensuring that corrective actions are taken and recommendations implemented.
EY also performs internal follow-up audits and reports independently to the Audit Committee and then to the Senior Leadership Team on the findings and recommendations it identifies. 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 regularly reviewed and tested so that they remain compliant. 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 for employees, contractors, suppliers and other service providers to NBL.
Since 2015, insurance audits have been conducted by Group Risk using the Marsh methodology to better quantify and manage risk. The main plant is audited on an annual basis, while depots are audited on a rotational basis. During the reporting year, the main plant was audited. NBL received a five-star rating (90%) in respect of its overall compliance with local and international insurance standards.
Stakeholder communication, ethics and Tip-offs Anonymous hotline
NBL’s Board is aware of the importance of communicating the Company’s activities to all stakeholders in a balanced and comprehensive manner. Each key stakeholder group therefore has a business owner – the individual in NBL primarily accountable for managing the relationship and regularly engaging with the stakeholder or stakeholder group concerned.
Shareholder communications take the form of analyst presentations when NBL announces its interim and final financial results. The Company also publishes and reports on details of its performance (including its interim and final financial results) in two local daily newspapers. Other Company notices and publications are published on the website, where the most recent financial and historical information is available. This includes integrated annual reports.
The Audit Committee is responsible for embedding a culture of high ethical standards. The Committee periodically reviews the Company’s Code of Ethics and the Company’s programme to monitor compliance. Employees have several ways in which they can raise their concerns and make recommendations or obtain feedback from the Senior Leadership Team. One such avenue is the workplace forum within the different functions, which is held on a weekly or fortnightly basis. At these forums, employees can discuss matters they are concerned about. If an employee is not comfortable with airing their views at these forums, they can contact the Tip-offs Anonymous hotline. The hotline is administrated by independent service provider, Deloitte & Touche.
NBL invites all shareholders to attend its AGM and also facilitates participation by encouraging shareholders unable to attend to submit proxy forms.
Shareholding analysis for 30 June
|*||Excludes special dividends.|