Board committees

Key responsibilities

The audit committee is a statutory committee which carries out its duties in accordance with the Companies Act.

The committee provides independent oversight in relation to external audit, internal audit and the finance function. It further assists the board in overseeing the integrity of the annual financial statements.

Key focus areas

The key focus areas during the period under review were in line with the committee’s charter and included:

• Overseeing the implementation of new IFRS standards
• Approving the internal audit plan and overseeing the work of internal audit
• Reviewing the audit plan of the external auditors and approving non-audit services
• Assessing the independence and objectivity of the external auditors
• Overseeing regulatory compliance
• Overseeing the integrated reporting process
• Reviewing the expertise, resources and experience of the Company’s financial function and financial director
• Assessing the effectiveness of internal financial controls based on assurance gained from management and written assessment from the internal audit
• Reviewing the decision-making framework

Focus areas for the year ahead

• Overseeing the transition from the current auditor, PricewaterhouseCoopers (PwC) to Ernst & Young Inc. (EY) for the 2024 financial year
• Overseeing the implementation of IFRS 17 for the 2024 financial year

 

The members of the committee are independent non-executive directors. The committee met five times during the year.

The members are financially literate and suitably qualified to perform their role. The remaining non-executive directors attend by invitation. Meetings are also attended by the Chief executive officer, Chief financial officer, Company secretary, Internal audit executive, Chief risk officer and the external auditors.

Key responsibilities

Risk governance is overseen by the risk committee.

The committee reviews the risk profile of the Group on a quarterly basis to ensure that the relevant risks are reflected on the risk profile. The material risks and action plans are disclosed on pages 15 to 18 of the Integrated Report.

Key focus areas

The key focus areas during the period under review were in line with the committee’s charter and year plan, and included:

Reviewing the Company risk profile which includes a review of the following:

• Risk registers;
• Emerging risk register;
• Compliance risk; and
• Risk appetite and tolerance levels;

Monitoring the implementation of the risk management policy and plan

Assessing the effectiveness of the system and process of risk management based on assurance gained from management and written assessment from the internal audit on the effectiveness of internal controls and risk management

Approval of the combined assurance plan

Reviewing and advising on the adequacy of insurance cover for recommendation to the board

Overseeing IT governance and the function of the IT steering committee by:

• Ensuring that an IT charter and policies are established and implemented;
• Ensuring that an IT internal control framework is adopted and implemented; and
• Receiving independent assurance on the effectiveness of the IT internal controls;

Oversight of IT systems development enabling the business to continue to function effectively inclusive of cyber security

Overseeing the implementation of the compliance policy and plan and the effective execution of compliance management

Continuously enhance the business continuity plan and disaster recovery plan

Monitoring compliance with legislation

Focus areas for the year ahead

• Continuously review the risk profile
• Further implementation of the business continuity plan
• Monitoring compliance with protection of personal information legislation
• Enhancement of the disaster recovery plan
• Oversight of IT systems development enabling the business to continue to function effectively inclusive of cyber security

 

The committee consists of six independent non-executive directors and two executive directors. The risk committee met four times during the year.

Meetings are also attended by the Internal audit executive, the Chief risk officer and the IT general manager.

Key responsibilities

The committee is tasked with:

• Establishing a formal process for the appointment of directors
• Overseeing a formal induction programme for new directors and continuing development programmes for all directors
• Ensuring directors receive regular briefings on changes in risks, laws and the environment in which the Group operates
• Ensuring succession plans are developed for the Chief executive officer and senior management
• Confirming annually that none of the directors have become disqualified (fit and proper test)
• Ensuring the board has the required skills, experience and qualities

Key focus areas

The key focus areas during the period under review were in line with the committee’s charter and year plan, and included:

• Reviewing the composition of the Lewis and Monarch boards
• Reviewing the skills and experience of board members
• Overseeing the board evaluation process
• Ensuring that succession planning is in place and confirming that to the board

 

The committee consists of six independent non-executive directors. The Chief executive officer attends meetings at the invitation of the committee. The committee met twice during the year.

Key responsibilities

The committee is tasked with ensuring that a policy is in place which is in line with the Company’s performance-orientated culture and which fairly rewards staff for their contribution in achieving the Group’s strategic, financial and operational objectives.

Key focus areas

The key focus areas during the period under review were in line with the committee’s charter and year plan, and included:

• Reviewing the Remuneration policy and Implementation report
• Reviewing and approving compensation of executive directors, and senior executives
• Recommending non-executive directors’ fees for shareholder approval
• Ensuring executive directors are fairly rewarded based on market trends, surveys, individual performance and contributions
• Reviewing share incentive schemes to ensure continued alignment to the enhancement of shareholder value
• Approving the award of share incentives
• Ensuring employee benefits are suitably disclosed
• Ensuring practices are compliant with relevant legislation and regulation

The current focus areas will remain the focus for the coming year.

 

The committee consists of six independent non-executive directors. The Chief executive officer attends meetings at the invitation of the committee. The remuneration committee met three times during the year.

Key responsibilities

The committee, in addition to its statutory duties, oversees that the Company’s values, strategy and conduct are those of a responsible corporate citizen.

Key focus areas

The key focus areas during the period under review were in line with the committee’s charter and year plan, and included:

• Continued monitoring of the code of ethics, including values and ethics awareness
• Monitoring customer relationships and compliance with consumer laws
• Increasing focus on environmental, social and governance (ESG) reporting, including supporting the board and management with the implementation of the recommendations of the Task Force on Climate-Related Financial Disclosures
• Monitoring employee training and leadership programmes
• Supporting learnerships for disabled and able-bodied learners
• Continue to support initiatives aimed at improving retention rates of branch managers and regional controllers
• Promoting and supporting enterprise and supplier development
• Increasing focus on transformation and diversity
• Continuing support for socio-economic development programmes

Focus areas for the year ahead

Current focus areas will remain for the year ahead.

The social, ethics and transformation committee report is available on Integrated annual reports

 

The committee consists of three independent non-executive directors and one executive director. Meetings are also attended by the Human resources director as well as the senior managers responsible for socio-economic development and finance. The social, ethics and transformation committee meets twice a year. See social, ethics and transformation committee report for more information on www.lewisgroup.co.za/investors/integrated-annual-reports/

Lewis Stores board

Lewis Stores is the main trading subsidiary of the Group and operational responsibility has been delegated to Lewis Stores’ board for the ongoing management of the business.

 

The board consists of five executive directors. Meetings are also attended by the 18 executive committee members.

The board meets three times a year.

Governance committees of Lewis Stores Proprietary Limited

Risk Working Group

The Risk Working Group consists of the CEO, CFO, the chief risk officer and all relevant executives and senior management of the Group.

The Group meets quarterly and reports to the Lewis Stores board as well as to the Lewis Group risk committee and Monarch’s audit and risk committee. Refer to pages 92 to 94 of the Integrated Report for their responsibilities, which are supervised by the Lewis Group risk committee.

Information technology steering committee

The steering committee meets quarterly and comprises the CEO, CFO and IT general manager as well as business systems and IT operations managers. The committee reports into the risk committee.

The committee is responsible for:

• Ensuring that the implementation of the IT policy and plan conforms to the objectives of the IT charter
• Aligning IT with the business needs of the Group
• Prioritising investment decisions relating to IT resources
• Sourcing decisions relating to IT services
• Identifying and exploiting IT opportunities
• Administrative and contractual decisions which have a significant impact
• Monitoring IT costs and capital expenditure
• Monitoring, prioritising and co-ordinating the IT project portfolio
• Reporting to the risk committee on the performance of its duties
• Business continuity planning
• Overseeing the IT control framework and information security management

Monarch board

Monarch’s board consists of four independent non-executive directors, one non-executive director and one executive director. Brendan Deegan attends board meetings by invitation pending approval of his appointment by the Prudential Authority. Once approval is received, Monarch’s board will consist of five independent non-executive directors. The Lewis Group chief executive officer and chief financial officer attend meetings at the invitation of the committee. Monarch’s board meets four times a year.

Monarch is the Group’s insurer. Knowledge and experience of short-term insurance is considered in appointing directors to the board. Robert Shaw, a non-executive director, provides insurance advisory services to Monarch.

A formal report on the investment portfolio by Sanlam Investment Management, who manage the portfolio on Monarch’s behalf, is presented at each board meeting, covering market conditions and expectations, asset allocation, investment returns, review of the investment portfolios and recommendations on the investment strategy.

Key responsibilities

Monarch’s board is tasked with:

• Approving and overseeing strategic plans for the insurer within the parameters of the overall strategic direction of the Group
• Approving budgets
• Providing oversight of performance against targets and objectives
• Providing effective leadership on an ethical foundation
• Overseeing relationships with stakeholders
• Regularly reviewing underwriting criteria
• Adopting asset allocation strategies for the investment portfolio, based on recommendations from Sanlam Investment Management
• Reviewing the performance of the investment portfolio against benchmarks
• Ensuring regulatory compliance
• Overseeing key performance and risk areas
• Ensuring effective risk management and internal control
• Assessing director selection, orientation and evaluation
• Approving significant accounting policies
• Approving the annual financial statements

 

Monarch Audit and Risk Committee

Key responsibilities

The committee is tasked with:

• Reviewing the internal and external audit plans relative to the Group’s audit plan
• Providing guidance on non-audit services
• Considering significant differences of opinion between management and internal or external auditors
• Ensuring regulatory compliance. The committee is also responsible for the Group’s compliance with the Financial Advisory and Intermediary Services Act
• Reviewing the financial reporting system, evaluating and approving accounting policies and approving the financial statements
• Reviewing the adequacy of internal controls and internal financial controls
• Annually reviewing the risk register of strategic and key operational risks. Monitoring implementation of the risk management policy and plan
• Addressing risks specific to the company that have been identified in the Group risk management process
• Assessing the effectiveness of the system and process of risk management based on assurance gained from management and written assessment from internal audit on the effectiveness of internal controls and risk management

The committee consists of two independent non-executive directors. Brendan Deegan attends committee meetings by invitation pending approval of his appointment by the Prudential Authority. Once approval is received, the committee will consist of three independent non-executive directors. The members are financially literate and suitably qualified to perform their role. The remaining non-executive directors, Monarch’s chief executive officer and Lewis Group chief executive officer and chief financial officer attend by invitation. Meetings are also attended by the company secretary, internal audit executive, the chief risk officer and the external auditors.

The Monarch Audit and Risk Committee meets four times a year.

In terms of the Companies Act, non-executive director Robert Shaw is deemed to be a material supplier to Monarch and is therefore precluded from being a member of the audit and risk committee.