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AreaRequirementStatusComments
  1.1 The board should provide effective leadership based on an ethical foundation Applied The board annually, at a special strategy session, considers and determines the short and long term direction and strategy of the company and provides clear guidelines to Management as to the execution of such strategies. This is based on the highest ethical standards whereby the best interests of the company and all its stakeholders are taken into consideration.
  1.2 The board should ensure that the company is and is seen to be a responsible corporate citizen Applied Being a good corporate citizen means that the company respects and complies with the laws of the country and abides by non-binding rules, codes and standards. In this regard it can be safely stated that Sasfin does comply with all applicable laws, rules and codes, and has a fully staffed and experienced compliance monitoring department (also refer to 2.9 below). Being a good corporate citizen further means being there for the communities that Sasfin operates in. To this end, Sasfin is involved in a variety of CSI and other sponsorships and donations. The total donations and sponsorships spend for the year up to June 2012 was approximately R1.7 million. The group endeavours to uplift poverty, improve the quality of life and promote education and development for all South Africans. (Page 23)
  1.3 The board should ensure that the company’s ethics are managed effectively Applied The Board has adopted a formal Code of Ethics which applies to all employees. A Social and Ethics Committee has been established with its own Terms of Reference to ensure that the company’s ethics in its broadest sense are managed effectively
AreaRequirementStatusComments
Role and function of the board 2.1 The board should act as the focal point for and custodian of corporate governance Applied The board fully subscribes to the principles of sound corporate governance and takes its responsibility in this regard seriously. The board is the custodian of corporate governance and how it is being applied in all companies within the whole Group.
2.2 The board should appreciate that strategy, risk, performance and sustainability are inseparable Applied The board has a clear understanding that these elements are fully entwined and take full cognisance of this in determining strategy and direction.
  2.3 The board should provide effective leadership based on an ethical foundation Applied Refer to 1.1 above
  2.4 The board should ensure that the company is and is seen to be a responsible corporate citizen Applied Refer to 1.2 above
  2.5 The board should ensure that the company’s ethics are managed effectively Applied Refer to 1.3 above
  2.6 The board should ensure that the company has an effective and independent audit committee Applied An independent Group Audit & Compliance Committee is in operation in accordance with the requirements of both the Companies Act and the Banks Act, and the composition of the Committee also complies with the King III principles. The committee has comprehensive Terms of Reference to ensure that its mandate is carried out effectively. The effectiveness of the Committee is reviewed annually to ensure that it achieves its objectives.
  2.7 The board should be responsible for the governance of risk Applied The board has adopted a comprehensive Risk Management Framework to manage general company risks but specifically those risks particular to the banking industry. Although the board has delegated the governance of risk to the Group Risk and Capital Management Committee, it remains the board’s responsibility.
  2.8 The board should be responsible for information technology (IT) governance Applied The board has put structures in place to effectively manage information technology governance. An IT Management Committee is in operation and meets monthly and reports into the Group Risk and Capital Management Committee which meets quarterly.
  2.9 The board should ensure that the company complies with applicable laws and considers adherence to non-binding rules, codes and standards Applied The company has a fully staffed and experienced compliance section as part of the Legal, Compliance and Company Secretarial Department, and has put various policies, procedures and mechanisms in place to effectively monitor the company’s compliance with applicable laws and adherence to non-binding rules, codes and standards.
  2.10 The board should ensure that there is an effective risk-based internal audit Applied An independent internal audit function is performed by the Group Internal Audit department headed by a seasoned and experienced Head of Internal Audit who functionally reports to the Chairman of the Audit Committee and administratively to the Chief Executive Officer.
  2.11 The board should appreciate that stakeholders’ perceptions affect the company’s reputation Applied The board is fully aware of how stakeholders’ perceptions can affect the company’s reputation. This risk is appropriately managed as part of the overall risk management framework
  2.12 The board should ensure the integrity of the company’s integrated report Applied                  The Group adopted the “Combined” or “One Report” approach in the development of its first integrated annual report in 2011. In the current year, the Group seeks to enhance the structure and content of the report as part of its journey. In particular, there is a greater focus on financial sustainability reporting across all areas of the business. The Group has adopted a combined assurance approach to assist in maintaining control and oversight of the key material reporting issues (also refer 3.5 below)
                    Further steps are being taken by the Group to enhance its journey towards an all-encompassing integrated annual report.                
  2.13 The board should report on the effectiveness of the company’s system of internal controls Applied The Audit Committee Report as contained in the integrated annual report deals fully with the effectiveness of the Company’s system of internal controls. (Pg.45/46)
  2.14 The board and its directors should act in the best interests of the company Applied The board consists of competent and experienced directors, the majority of whom are non-executive, who collectively always act in the best interests of the company.
  2.15 The board should consider business rescue proceedings or other turnaround mechanisms as soon as the company is financially distressed as defined in the Act Applied The company and its subsidiaries are currently in a sound financial position but will consider business rescue proceedings or other turnaround mechanisms if required, should the company or any of its subsidiaries become financially distressed as defined in the Act.
  2.16 The board should elect a chairman of the board who is an independent non-executive director. The CEO of the company should not also fulfill the role of chairman of the board Applied The board is chaired by an independent non-executive director, and the CEO of the company does not fulfill the role of Chairman of the board.
  2.17 The board should appoint the chief executive officer and establish a framework for the delegation of authority Applied The board has appointed the Chief Executive Officer and a framework for the delegation of authority is in place.
                 Composition of
                    the board                
2.18 The board should comprise a balance of power, with a majority of non-executive directors. The majority of non-executive directors should be independent Applied The board comprises of nine directors, seven of whom are non‑executive and two are executive directors. Of the seven non‑executive directors, six are independent.
Board appointment process 2.19 Directors should be appointed through a formal process Applied The appointment of directors takes place through a formal process through the Directors’ Affairs and Nominations Committee which makes suitable recommendations to the Board, and all appointments are also sanctioned by the South African Reserve Bank. Directors’ appointments / re-election are subject to shareholder approval at the Annual General Meeting.
Director development 2.20 The induction of and ongoing training and development of directors should be conducted through formal processes Applied Non-executive directors are selected through a formal process and when new non-executive directors are appointed, such appointments require confirmation at the next annual general meeting. Non-executive directors are appointed for a specific term and their reappointment is not automatic. The appointment of all directors is subject to Reserve Bank approval. Upon being appointed, non-executive directors are subject to a formal induction program with presentations by all the main operating divisions to bring them up to speed with the nature and extent of the Group’s business environment, its operations and sustainability issues relevant to the business. Although there were no appointments to the board during the period under review, new directors have in the past attended specialised courses at the Gordon Institute of Business Science (GIBS) , and external training is given to directors by means of ad hoc presentations throughout the year. (pg. 26)
Company secretary 2.21 The board should be assisted by a competent, suitably qualified and experienced company secretary Applied The Board is assisted by a competent, suitably qualified and experienced Company Secretary. The current Group Company Secretary is Howard Brown, who is not a director of the Company and is an attorney with over twenty years of experience in the corporate and company law arena, and who also fulfills the statutory role of Group Compliance Officer as required by the Banks Act. (Pg 30)
Performance assessment 2.22 The evaluation of the board, its committees and the individual directors should be performed every year Applied A formal process is followed whereby the effectiveness of the board and individual directors are evaluated each year. For the past few years board effectiveness was evaluated through an internal process but an external board evaluation process will be followed during 2013 and then every third year thereafter. The effectiveness of each committee is evaluated each year by means of a questionnaire completed by both members and invitees (except the external auditors in respect of the Group Audit and Compliance Committee, to preserve their independence) to committee meetings. The results of the questionnaires are submitted to each committee for discussion and noting of any particular comments made by any member or invitee, with a view to constantly enhance the effectiveness of the particular committee. The results of all committee evaluations are also submitted to the Board for noting.
Board committees 2.23 The board should delegate certain functions to well-structured committees but without abdicating its own responsibilities Applied The following Board Committees had been established, each with its own Terms of Reference as their mandates. The Terms of References are reviewed annually by the Board:                                        
  • Group Audit & Compliance Committee (“GACC”);
  • Group Risk and Capital Management Committee (“GRCMC”);
  • Directors’ Affairs and Nominations Committee;
  • Asset and Liability Committee (“ALCO”);
  • Group Human Resources and Remuneration Committee;
  • Social and Ethics Committee;
  • Credit and Investment Committee (“CIC”)
Group boards 2.24 A governance framework should be agreed between the group and its subsidiary boards Applied The same governance framework that is in force for Sasfin Holdings and Sasfin Bank is applied within the subsidiary companies of the Group. The GACC also performs the role of the Audit Committee for wholly-owned subsidiaries.
Remuneration of directors and senior executives 2.25 Companies should remunerate directors and executives fairly and responsibly Applied The board has delegated the responsibility of determining the remuneration of executive directors and senior management to the Human Resources and Remuneration Committee. The Committee aims to give the executive directors and senior management every encouragement to enhance Sasfin’s performance and to ensure that they are fairly, but responsibly rewarded for their individual contribution and performance
  2.26 Companies should disclose the remuneration of each individual director and certain senior executives Applied The remuneration of each individual director and certain senior executives are fully disclosed in the integrated annual report available on the Company’s website (Pages 49 & 95))
  2.27 Shareholders should approve the company’s remuneration policy Applied The Company’s Remuneration Policy, as fully set out in the integrated annual report (Page 36), is tabled to shareholders for a non-binding advisory vote at each Annual General Meeting.
AreaRequirementStatusComments
  3.1 The board should ensure that the company has an effective and independent audit committee Applied Refer 2.6 above
Membership and resources of the audit committee 3.2 Audit committee members should be suitably skilled and experienced independent non-executive directors Applied The GACC consists of three independent non-executive directors and one non‑executive director who are suitably skilled and experienced to effectively execute the Committee’s mandate and terms of reference as required in terms of the Companies Act and the Banks Act.
  3.3 The audit committee should be chaired by an independent non-executive director Applied The GACC is, and has always been, chaired by an independent non-executive director.
Responsibilities of the audit committee 3.4 The audit committee should oversee integrated reporting Applied The GACC oversees integrated reporting and annually considers the draft integrated annual report before submission to the Board for final approval.
3.5 The audit committee should ensure that a combined assurance model is applied to provide a coordinated approach to all assurance activities Applied                  The Group has adopted a combined assurance approach in assisting the board, audit committee and executive management to maintain control and oversight of the key material reporting issues. In addition to independent assurance by external auditors over the Group’s financial statements, the various regulatory bodies including the SARB, FSB, JSE and certain legal experts also provide assurance on the Group's internal controls and compliance (Page 33).
                    The GACC is satisfied that Management, together with internal and external assurance providers and Regulators, are providing sufficient assurance that significant risk areas within the Company are adequately covered and addressed, and that suitable controls are in place to mitigate those risks.                
Internal assurance providers 3.6 The audit committee should satisfy itself of the expertise, resources and experience of the company’s finance function Applied The Company has a fully staffed and experienced Finance function and the GACC is satisfied with the expertise, resources and experience of individual employees within the Finance department and of the Finance function as a whole.
3.7 The audit committee should be responsible for overseeing of internal audit Applied Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It assists the Group to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. The GACC annually considers and approve an Internal Audit Plan for the year and quarterly Internal Audit reports are being submitted to the GACC on its activities for the quarter against the approved internal audit plan.
3.8 The audit committee should be an integral component of the risk management process Applied The GACC is a key element in the overall governance structure of the Group and its subsidiaries which in conjunction with the GRCMC forms an integral part of the risk management process.
External assurance providers 3.9 The audit committee is responsible for recommending the appointment of the external auditor and overseeing the external audit process Applied This responsibility is diligently carried by the GACC and is confirmed in the integrated annual report (page 46).
Reporting 3.10 The audit committee should report to the board and shareholders on how it has discharged its duties Applied A Committee Effectiveness Review is performed annually by means of a questionnaire completed by both members and invitees (except the external auditors, to preserve their independence) to Committee meetings, and the outcome is reported to the Board. A comprehensive Audit Committee Report to shareholders on the functions and activities of the audit committee is included in the company’s integrated report (pages 45 & 46).
AreaRequirementStatusComments
  4.1 The Board should be responsible for the governance of risk. Applied The board’s responsibility for risk governance is expressed in the board charter. The approach to risk management is based on defined governance structures and processes; and reliance on both individual responsibility and collective oversight.
  4.2 The board should determine the levels of risk tolerance Applied The Board has an approved Risk Appetite Framework which clearly defines the Board’s risk appetite and levels of risk tolerance. The Framework includes a risk appetite statement  for each of the following risks:                                        
  • Liquidity Risk;
  • Capital Risk;
  • Credit Risks – including a statement on tolerance levels associated with large exposures to single obligators;
  • Investment Risk – including a statement on tolerance levels associated with large exposures to single initial investments;
  • Market Risk;
  • Operational Risk;
  • Reputational Risk; and
  • Strategic Risk
  4.3 The risk committee or audit committee should assist the board in carrying out its risk responsibilities Applied The Group Risk & Capital Management Committee and, in some respects, also the Group Audit & Compliance Committee, assists the Board in carrying out its risk responsibilities.
                 Management’s responsibility
                    for risk management                
4.4 The board should delegate to management the responsibility to design, implement and monitor the risk management plan Applied The Board has delegated this responsibility to Management who has drafted the Group’s Risk Management Framework, which had been considered and approved by the Group Risk and Capital Management Committee for ratification by the Board.
Risk assessment 4.5 The board should ensure that risk assessments are performed on a continual basis Applied Risk assessments are being performed on a continual basis and reported to the Group Risk and Capital Management Committee quarterly.
4.6 The board should ensure that frameworks and methodologies are implemented to increase the probability of anticipating unpredictable risks Applied Sasfin recognizes that the business of banking and financial services is conducted within an environment of complex interrelated risks. Accordingly, a philosophy of integrated risk management has been established within the Sasfin to ensure that all business and operational risks are managed effectively within acceptable parameters. In this regard, Sasfin has implemented an Enterprise Risk Management approach to break down the silos of individual risks, and enables management to review and understand an overall perspective on risks. The Sasfin Enterprise Risk Management Policy applies to all group companies, divisions and departments of Sasfin Holdings Limited. (Page 31)
Risk response 4.7 The board should ensure that management considers and implements appropriate risk responses Applied A Risk Register is maintained which contains management’s responses to identified risks.  Risk response tends to be based on cost/benefit ratios and looks at processes in place/to be put in place to mitigate identified risks.
Risk monitoring 4.8 The board should ensure continual risk monitoring by management Applied Refer to 4.6 above
Risk assurance 4.9 The board should receive assurance regarding the effectiveness of the risk management process Applied This is included in the Risk Management and Internal Audit processes.
Risk disclosure 4.10 The board should ensure that there are processes in place enabling complete, timely, relevant, accurate and accessible risk disclosure to stakeholders Applied Processes are in place and the outcome is included in the integrated annual report.
AreaRequirementStatusComments
  5.1 The board should be responsible for information technology (IT) governance Applied IT is an integral part of Sasfin's business and is fundamental to the support, growth and sustainability of the Group. IT within the Group is directed by a dedicated Chief Information Officer and the overall responsibility for IT governance lies with the Board. An Information and Security Governance Manager was appointed to address IT governance, and reports to the Chief Information Officer (Pg. 29)
  5.2 IT should be aligned with the performance and sustainability objectives of the company Applied Through the IT strategy, the IT roadmap is aligned to the Group’s business objectives to ensure that IT consistently enables sustainable value driven solutions and services to the Group. (Pg. 29)
  5.3 The board should delegate to management the responsibility for the implementation of an IT governance framework Applied A dedicated Information Technology Department, headed by the Chief Information Officer, is responsible for the implementation of the board approved IT governance framework. The IT Governance Framework has been implemented and reporting is performed at various levels.
  5.4 The board should monitor and evaluate significant IT investments and expenditure Applied An IT Project Management Office is in place to align and structure processes to better measure and manage the overall IT portfolio by ensuring that the appropriate project management principles are applied to all new IT projects. Significant IT investments and expenditure is overseen by the board to ensure proper value delivery of IT and that the expected return on investment from significant IT investments and projects is delivered and that the information and intellectual property contained in information systems are protected.
  5.5 IT should form an integral part of the company’s risk management Applied The Group has adopted Control Objectives for Information and Related Technology (“COBIT”) as a guideline for establishing and maintaining effective internal controls, including compliance, continuity management and risk. Continuous risk assessments are performed and risks are raised and reported on to the Group Risk and Capital Management Committee.
  5.6 The board should ensure that information assets are managed effectively Applied And IT governance framework is in place to assist the board to ensure that information assets are managed effectively and properly. Information security protects information assets against the risk of loss, operational discontinuity, misuse, unauthorized disclosure, inaccessibility and damage. This is addressed through the Data Management Strategy.
  5.7 A risk committee and audit committee should assist the board in carrying out its IT responsibilities Applied An IT Operations Committee (“IT Opsco”) meets monthly which reports into an IT Management Committee (“IT Manco”) which meets quarterly or ad hoc when required. The IT Manco reports into the Group Risk and Capital Management Committee on a quarterly basis. Continuous risk assessments are performed and risks are raised and reported on to the Group Risk and Capital Management Committee.
AreaRequirementStatusComments
  6.1 The board should ensure that the company complies with applicable laws and considers adherence to nonbinding rules codes and standards Applied Sasfin's independent compliance function has been established in terms of Regulation 49 of the Banks Act, other pertinent legislation including the FAIS Act, the Security Services Act, the National Credit Act and the Protection of Personal Information Act, once finalised, as part of its risk management framework. The objective of the function is to ensure that the Group continuously manages its regulatory risk and complies with applicable laws, regulations and supervisory requirements. Sasfin further fully subscribes to adherence to nonbinding rules, codes and standards, including the principles of the King III code on corporate governance.
  6.2 The board and each individual director should have a working understanding of the effect of the applicable laws, rules, codes and standards on the company and its business Applied The Board consists of highly educated and experienced nonexecutive and executive directors, each of whom has more than a working understanding of the effect of the applicable laws, regulations, rules, codes and standards on the company and the Group.
  6.3 Compliance risk should form an integral part of the company’s risk management process Applied Compliance risk is monitored and reported on by an independent compliance function housed in the Legal, Compliance, and Company Secretarial department as well as a dedicated Regulatory Compliance Officer in the Finance department.
  6.4 The board should delegate to management the implementation of an effective compliance framework and processes Applied The board has dedicated the implementation of an effective compliance framework and processes to an independent compliance function as part of the Legal, Compliance and Company Secretarial department.
AreaRequirementStatusComments
The need for and role of internal audit 7.1 The board should ensure that there is an effective risk based internal audit Applied An internal Audit function is in place. Internal audits are conducted on a risk based approach as advocated by the Institute of Internal Auditors
Internal audit’s approach and plan 7.2 Internal audit should follow a risk based approach to its plan Applied The compilation of the internal audit plan is risk based, where only audits assessed as appropriate through the Board’s agreed risk assessment criteria are included.
7.3 Internal audit should provide a written assessment of the effectiveness of the company’s system of internal controls and risk management Applied Apart from the written assessment provided at the end of each audit assignment, in the form of an internal audit report, a written assessment is provided annually, by the Head of Internal Audit to the Board on the effectiveness of the company’s system of internal controls and risk management.
7.4 The audit committee should be responsible for overseeing internal audit Applied Internal Audit reports functionally to the Chairman of the Audit and Compliance Committee. The committee is responsible for overseeing the internal audit function.
Internal audit’s status in the company 7.5 Internal audit should be strategically positioned to achieve its objectives Applied Internal audit reports functionally to the Chairman of the Audit Committee and Administratively to the CEO. It has unrestricted access to the Board and all Board Committees. It is a permanent invitee to the Group EXCO committee and Mancos. It is therefore appropriately and strategically positioned within the Group to achieve its objectives as an independent assurance provider to the Board.
AreaRequirementStatusComments
  8.1 The board should appreciate that stakeholders’ perceptions affect a company’s reputation Applied The board fully appreciates and is aware that stakeholders’ perceptions could affect the Group’s reputation. Sasfin therefore engages with key stakeholders on an ongoing basis with the objective of ensuring that the interests of all stakeholders are considered, and that key issues are addressed. The group has identified the following key stakeholders:                                        
  • Clients;
  • Funders and depositors;
  • Regulatory bodies and government;
  • Shareholders and investment analysts;
  • Social and environmental communities;
  • Directors, management and staff;
  • Service providers.
  8.2 The board should delegate to management to proactively deal with stakeholder relationships Applied The board has established a Group Marketing & Business Development and Group Strategy department to be responsible for proactive investor relations and stakeholder relationships.
  8.3 The board should strive to achieve the appropriate balance between its various stakeholder groupings, in the best interests of the company Applied A summary of Sasfin's stakeholder engagements with a holistic view of the resulting material issues and the Group’s strategic response to these issues is contained in the integrated annual report in respect of all the different key stakeholders as mentioned in 8.2 above. (Pg. 12&13)
  8.4 Companies should ensure the equitable treatment of shareholders Applied Sasfin makes no distinction between its treatment of shareholders in any matter or form.
  8.5 Transparent and effective communication with stakeholders is essential for building and maintaining their trust and confidence

Applied                

The Group Marketing & Business Development and Group Strategy department is responsible for transparent and effective communication with stakeholders by various means, including responsibility for updating the company’s website, all printed and electronic communication, the hosting of specific functions for selected groups of stakeholders, and playing a major role in the production and publication of the Group’s integrated annual report
Dispute resolution 8.6 The board should ensure that disputes are resolved as effectively, efficiently and expeditiously as possible Applied Any disputes that may arise from the Group’s engagement with its stakeholders are attended to immediately to ensure that they are resolved as effectively, efficiently and expeditiously as possible.
AreaRequirementStatusComments
Transparency and accountability 9.1 The board should ensure the integrity of the company’s integrated report Applied The Board assumes full responsibility for the information and financial reporting provided in the Group’s integrated annual report by interrogating the information provided by Management, and signs off on the draft report at a full Board meeting before publication.
9.2 Sustainability reporting and disclosure should be integrated with the company’s financial reporting Applied Sustainability reporting and disclosure is fully integrated in the Groups integrated annual report as part of its overall financial reporting.
9.3 Sustainability reporting and disclosure should be independently assured Explained Sasfin assesses the sustainability of each of its units annually when approving its Business Plans, Budgets and Three-Year Forecasts. Currently, limited external assurance is obtained on sustainability reporting issues but initiatives are afoot to enhance assurance on this aspect of integrated reporting.
  1. The board of Sasfin Holdings Limited subscribes to good corporate governance and strives to be an effective board, which can both lead and control the Group.  As a bank-controlling company, it recognises that it is bound by the Banks Act and as such, will consist of both executive and non-executive directors (including independent directors) to the extent appropriate in terms of that Act.  The concept of a unitary board, consisting of executive directors, with their intimate knowledge of the business, and non-executive directors who can bring a broader view to the Group’s activities, particularly those who have intimate knowledge of banking and financial services industries, remains the favoured board structure.  Management of business risk and the exercise of commercial judgement on behalf of the Group are the essence of this mutual association and exchange of business experience and knowledge.  The board accepts it has a collective responsibility to provide effective corporate governance that involves a set of relationships between the management of the Group, its boards, its shareowners and other relevant stakeholders, in a manner whereby the board will:-
    1. determine the Group’s purpose and values;
    2. determine the strategies to achieve its purpose (that is, its strategic intent and objectives  as a business enterprise) and to implement its values (that is, its organisational behaviour and norms to achieve its purpose) in order to ensure that it survives and thrives;
    3. exercise leadership, enterprise, integrity and judgement in directing the Group so as to achieve continuing prosperity of the Group;
    4. ensure that procedures and practices are in place that protect the Group’s assets and reputation;
    5. monitor and evaluate the implementation of strategies, policies, management performance criteria and business plans;
    6. ensure that the Group complies with all relevant laws, regulations and codes of best business practice;
    7. ensure that technology and systems used are adequate to run the business properly and for it to compete through the efficient use of its assets, processes and human resources.
    8. identify key risk areas and key performance indicators of the Group in order to generate economic profit, so as to enhance shareowner value in the long term (the wider interests of society will also be recognised);
    9. regularly assess performance and effectiveness as a whole, and that of individual directors, including the chief executive officer, and
    10. ensure that the Group has developed a succession plan for its executive directors and senior management.  In addition, ensures regular review of the succession of Non-Executive Directors.
  2. The board will strive to focus on “performance” in directing the commercial and economic fortunes of the Group, and not only concentrate on issues of “conformance”.  The board recognises that enterprise is the disposition to engage in undertakings of risk and will be constituted in a manner that provides a balance between enterprise and control.  All directors recognise that absolute integrity is necessary to meet their onerous obligations and responsibilities.
  3. The board will comprise a balance of executive and non-executive directors, with a majority   of non-executive directors, of whom sufficient will be independent of management for minority interests to be protected and will conform to the “four-eyes” principle as required by the South African Reserve Bank.  The board will also take cognisance of gender and racial mix, where this is practical.
  4. The board will be composed of individuals of integrity, who can bring a blend of knowledge, skills, objectivity, experience and commitment to the board under the firm and objective leadership of a chairperson (preferably an independent non-executive director), and who accepts the responsibilities and duties that the post entails and who provides the direction necessary for an effective board.  Non-executive directors will be appointed for a three-year period, which will not be an automatic re-appointment.
  5. The board will strive to exercise objective judgement on the corporate affairs of the business enterprise, independent from management and will insist on sufficient management information to enable a proper and objective assessment to be made by the directors collectively.  The board will guide and set the pace of the Group’s operations and future developments.  In so doing, the board will regularly review and evaluate the present and future strengths, weaknesses and opportunities of, and threats to, the Group.  Comparisons with competitors, locally and internationally, and best practice will be major ingredients in this process – especially in the era of the global economy and the rapid transmission of information electronically.
  6. The board recognises that transactions between the Group companies and its managers, directors or large/dominant shareowners are rife with potential conflicts of interest.  The personal interests of directors or persons closely associated with the director will not take precedence over those of the Group and its shareowners.  All directors will avoid conflicts of interest, even where these can only be perceived to be as such.  Full and timely disclosure of any conflict, or potential conflict, will be made known to the board.  Where an actual or potential conflict does arise, the provisions of section 75(5) of the Companies Act will apply where a director must disclose the interest, its general nature, and material information, observations or pertinent insights relating to the matter, before the matter is considered at the meeting, and once these disclosures were made, is expected to recuse himself/herself from the meeting.  Any director, who, with a substantial interest in the company, such as a major shareowner, should recognise the potential for a conflict of interest and accept that his/her primary duty and responsibility is to always act in the interests of the Group.
  7. The board, in motivating management and employees effectively and productively, will promote a culture that supports enterprise and innovation with appropriate short- and long-term performance-related rewards that are fair and achievable.  The board will seek to drive the business enterprise proficiently through proper and considered decision-making processes, and recognise entrepreneurial endeavour amongst its management without contravening laws and regulations.  However, prudent risk management will be the essence of all decision making.
  8. The board recognises that companies do not act independently from the societies in which they operate.  Accordingly, corporate actions will be compatible with societal objectives concerning social cohesion, individual welfare and equal opportunities for all.  At times, however, a trade-off will be considered between short-term social costs and decisions that will derive longer term benefits for the Group and thereby those having an interest in it.
  9. The board will determine a policy for the frequency, purpose, conduct and duration of its meetings and those of its formally established committees.  It will also adopt efficient and timely methods for informing and briefing board members before meetings.  The information needs of the board must be well defined and regularly monitored.  Each board member will be allowed to play a full and constructive role in its affairs and has a responsibility to be satisfied that the board has been furnished with all the relevant information before making a decision.  The board will meet at least once a quarter and more frequently if necessary, and will make use of board-appointed committees to assist the managing of the business on a more frequent basis.  Minutes of these meetings will be circulated to all board members.
  10. Board committees:  The board will establish the following committees and ensure that each committee is chaired by a non-executive director and have a membership of a majority of non-executive directors, except for the Credit committee, as large exposures will be agreed by the board.  These committees must conform to statutory requirements, where applicable:-
    • Group Audit and Compliance
    • Group Risk and Capital Management
    • Directors’ Affairs and Nominations
    • HR and Remuneration
    • Asset and Liability
    • Credit and Investment
    • Social and Ethics
    • Information Technology
    • Further management committees, as required, will be approved by the board.
  11. The board will define its own levels of materiality, reserving specific powers to itself and delegating other matters to the committees and management with the necessary written authority.  Any such delegations by the board will have due regard for the directors’ statutory and fiduciary responsibilities to the Group, while taking into account strategic and operational effectiveness and efficiencies.
  12. The strategies, policies, mutually-agreed management performance criteria and business plans of the Group will be clearly defined and reliable measurements will be put into place.  The directors will implement a risk framework which ensures that comprehensive assessments against accurate and relevant financial and non-financial information, as appropriate, and which are obtainable from the Group’s own internal reporting systems as well as from external sources, so that an informed assessment can be made of all issues facing the board and the Group.  Accordingly, the board will ensure that internal control procedures provide reliable and valid information for monitoring and evaluation.  The internal controls will include not only financial matters, but also operational and compliance controls and management of the business risks associated with the Group.
  13. The Sasfin Holdings Limited Board Charter will serve as the Charter for Sasfin Bank Limited.
  1. ASSET AND LIABILITY COMMITTEE ("ALCO")
    1. Role

      The role of the Committee is to assist the board to ensure that:

      1. The Company has implemented an effective policy and plan for asset and liability management (‘hereafter ALM') management that will enhance the Company's ability to achieve its strategic objectives; and
      2. The disclosure regarding risks relating to ALM are comprehensive, timely, and relevant.
    2. Responsibilities:

      The Committee will perform all the functions as is necessary to fulfil its role as stated afore and including the following:

      1. Oversee the development and annual review of a policy and plan for ALM management to recommend for approval to the board;
      2. Monitor implementation of the policy and plan for ALM management taking place by means of ALM management systems and processes;
      3. Make recommendations to the board concerning the levels of tolerance and appetite and monitoring that risks are managed within the levels of tolerance and appetite as approved by the board;
      4. Oversee that the ALM management plan is widely disseminated throughout the company and integrated in the day-to-day activities of the Company;
      5. Ensure that risk management assessments relating to the ALM management process are performed on a continuous basis;
      6. Ensure that frameworks and methodologies are implemented to increase the possibility of anticipating unpredictable risks;
      7. Ensure that management considers and implements appropriate responses;
      8. Ensure that continuous risk monitoring relating to ALM by management takes place;
      9. Liaise closely with the Audit Committee and the Risk and Capital Management Committee for the exchange of information relevant to ALM;
      10. Express the Committee's formal opinion to the board on the effectiveness of the system and process of ALM management;
      11. Review reporting concerning risk management that is to be included in the integrated report for it being timely, comprehensive and relevant;
      12. Development and maintenance of a risk management policy for liquidity, interest rate and market risks;
      13. Monitor ALCO model inputs, outputs and sensitivities;
      14. Identifying new or changed opportunities;
      15. Liquidity and interest rate risk and foreign exchange rate risk as reporting to the board;
      16. Responsible to inform the board of any regulatory developments that could affect asset and liability policies and strategies.
  2. GROUP AUDIT AND COMPLIANCE COMMITTEE ("GACC")
    1. Role

      The Committee will assist the board to comply with Section 64 of the Banks Act, viz:

      1. Development of an internal audit programme;
      2. Safeguarding of the Group's assets;
      3. Maintenance of adequate accounting records;
      4. Development and maintenance of effective internal control systems;
      5. Improving the effective utilization of resources;
      6. Reporting of financial matters;
      7. Maintenance of risk policies and
      8. Ensuring an effective compliance function.

        and also ensures the following:

      9. In its evaluation of the adequacy and efficiency of the internal control systems, accounting practice, information systems and auditing processes applied within that bank or controlling company, as the case may be in the day-to-day management of its business;
      10. To facilitate and promote communications, regarding the matters referred to in 2.1.9 above or any other related matter, between the board of directors and the executive officers of, the auditor appointed under section 61 or 62 for, and the employee charged with the internal auditing of the transaction of, the bank or controlling company, as the case may be; and
      11. To introduce such measures as in the committee's opinion may serve to enhance the creditability and objectivity of financial statements and reports prepared with reference to the affairs of the bank or controlling company, as the case may; and
      12. Perform such further functions as may be prescribed.
    2. Responsibilities

      The Committee shall consider any matters relating to the financial affairs of the Bank and Holding Company boards and as well as to the internal and external audits that it determines to be necessary.
      In addition, the Committee shall also examine any other matters referred to it by the board, including other Committees, or the Chief Executive Officer or Financial Director or Internal Auditor or Compliance Function, provided that it is within the Committee's scope of responsibilities.

      The responsibilities of the Committee shall also be to:

      1. Consider the Internal Audit Charter prior to the board's approval and ensures that it contains the responsibilities, authorities, duties and objectives of the Internal Audit Departments; ensures an annual review;
      2. Allow Internal Audit and External Auditors to have unrestricted access to the Chairman or members of the Committee when necessary;
      3. Review the internal audit functions, scope and internal audit reports to ensure that the critical risk areas are addressed;
      4. Consider major findings of internal investigations and management's response;
      5. Review the board's internal control systems including financial control for effectiveness;
      6. Review accounting policies adopted or any changes made or contemplated;
      7. Monitor management's responsibilities according to this policy;
      8. Consider differences of opinion between management and auditors;
      9. Direct and supervise investigations into any matter within the scope of its responsibilities;
      10. review the interim and annual financial statements focusing particularly on:
        • any changes in accounting policies and practices;
        • compliance with accounting standards and statutory requirements.
      11. Discuss problems and reservations arising from the interim and final audits done by the external auditors if any;
      12. Review the external auditor's management letter and the management's response;
      13. Approve the scope of the external audits and finalise budgeted fee structure prior to interim, annual or other external audits;
      14. Ensures that an annual self-assessment review of the committee is undertaken.
  3. GROUP RISK AND CAPITAL MANAGEMENT COMMITTEE ("GRCMC")
    1. Role

      The role of the committee is to assist the board to ensure that:-

      1. The Company has implemented an effective policy and plan for risk capital management that will enhance the Company's ability to achieve its strategic objectives;
      2. The disclosure regarding risk is comprehensive, timely, relevant;
      3. To establish and implement a process of internal controls and reviews to ensure the integrity of the overall risk and capital management process;
      4. To establish and implement policies and procedures designed to ensure that the bank or controlling company identifies, measures and reports all material risks;
      5. To establish and implement a process that relates to capital to the levels of risk;
      6. To establish and implement a process that states capital adequacy goals with respect to risk, taking account of the bank's strategic focus and business plans.
    2. Responsibilities
      1. The GRCMC will assist the board and Management in its evaluation of the adequacy and efficiency of the risk policies, procedures, practices and controls applied within the Bank in the day-to-day management of the business within the risk appetite that the board may lay down from time to time.
      2. Development and maintenance of a Risk Management policy both internal and external;
      3. Assist the board in the identification of the build-up and concentration of risk, including reputational, technological, and legal & product risk, to which the Bank is exposed.
      4. Assist the board of directors in developing a risk mitigation strategy to ensure that the bank manages the risks in an optimum manner;
      5. Assist the board in ensuring that a formal risk assessment is undertaken at least annually;
      6. Assist the board in identifying and regularly monitoring all key risks and key performance indicators to ensure that its decision-making capability and accuracy of its integrated reporting and financial results are maintained at a high level at all times;
      7. Facilitate and promote communication, through reporting structures regarding the matters referred to in paragraph (a) or any other related matter, between the board of directors and the executive officers of the bank;
      8. Ensure the establishment of an independent risk management function, and in the case where the bank forms part of a group, a group risk management function (including any global activities), the head of which will act as the reference point for all aspects relating to risk management within the bank, including the responsibilities to arrange training to members of the board of directors in the different risk areas that the bank is exposed to.  It will also ensure that risk management assessments are performed on an ongoing basis;
      9. Introduce such measures as in the committee's opinion may serve to enhance the adequacy and efficiency of the risk management policies, procedures, practices and controls applied within the bank;
      10. Co-ordinate the monitoring of risk management on a globalized basis;
      11. Perform such further functions as may be prescribed by the Registrar from time to time in the Regulations relating to Banks
      12. Interact with the Audit & Compliance Committee, ALCO and Management on risk related issues; and
      13. Reporting to the Board of directors on critical risk issues.
  4. GROUP INFORMATION TECHNOLOGY COMMITTEE ("IT")
    1. Role

      The IT Committee will assist the board and Management with relation to:

      1. Assessing system requirements;
      2. Implementing systems;
      3. Disaster recovery planning;
      4. Identify opportunities / threats with regard to systems;
      5. System access controls; and
      6. Approve and monitor projects within board approved Budgets.
    2. Responsibilities

      The IT Committee shall consider any matters relating to the technological risk of Sasfin Bank.
      In addition, the Committee shall also examine any other matters referred to it by the board, Executive Directors or the Chief Information Officer provided that it is within the Committee's scope of responsibilities.
      The responsibilities of the committee shall also be to ensure that Risk Management structures are in place that enables:

      1. Policies and processes are in place for:
        • Maintenance
        • Enhancement
        • New development

          of both Operating and User systems.

        • Architecture
        • Networking
        • Platforms
        • Hardware

          and including both in-house development and off-the-shelf software.

      2. Policies are in place for creation of:
        • Disaster Recovery Planning and execution
        • Business Recovery Plans, Processes and Procedures
      3. Policies for safe keeping and monitoring computer assets and information security.
      4. Prioritising, approval and monitoring of major system development.
      5. Prioritising, approval and monitoring of major hardware implementation.
      6. Establishment of an IT Management Committee to manage ongoing system development and operational activities on a bi-monthly basis.
      7. To review the minutes of the IT Manco meetings.
      8. Monitor high level progress of system performance.
      9. Monitor strategic system development.
      10. Approve and monitor IT budgets for both capital and major systems development
  5. DIRECTORS' AFFAIRS COMMITTEE ("DAC")
    1. Role

      This committee will function on a group basis and is established in terms of the Banks Act.  It will also take cognisance of matters that are required by the King Code regarding a Nominations committee.

    2. Responsibilities

      The Directors' Affairs Committee will assist the board and Management with relation to:

      1. The requirements of the King Reports on Corporate Governance;
      2. The corporate governance issues relating to the Banks Act.
      3. Assist the board of directors in its determination and evaluation of the adequacy, efficiency and appropriateness of the Corporate Governance structure and practices of the Bank
      4. Establish and maintain a board Directorship continuity programme to include, as a minimum:
        • Review of performance and succession planning of executive directors;
        • Continuity of Non-Executive Directors;
        • Regularly review the required mix of skills, experience and other qualities required for the effectiveness of the board;
        • An annual self-assessment, under co-ordination of the Chairman of the board, of the board as a whole and of the contribution of each individual Director.
      5. Assist the board of directors in the nomination of successors to the key positions in the Bank ensuring that a management succession plan is in place;
      6. Assist the board of directors to terminate the employment of those Directors who have been found delinquent in their duties;
      7. Assist the board of directors in ensuring that the Bank is at all times in compliance with all applicable laws, regulations and codes of conduct and practices;
      8. Perform such further functions as may be prescribed by the Registrar from time to time in the Regulations relating to Banks.
  6. GROUP HUMAN RESOURCES AND REMUNERATION COMMITTEE ("REMCO")
    1. Role

      The Remuneration and HR Committee will assist the board in providing management with guidance on the adequacy and efficiency of remuneration and HR policies, procedures and practices which are to be applied within the Group.

      1. These policies should as a minimum cover the following aspects:-
        • Conditions and remuneration for appointment of both executive and non-executive directors;
        • Conditions and remuneration for appointment of senior management;
        • Guidelines for the appointment of other management and personnel;
        • Comprehensive HR policies, which includes those matters of the Financial Services Charter related to Black Economic empowerment;
        • Comprehensive HR procedures;
        • Comprehensive procedures which ensure compliance with laws and regulatory requirements.
      2. Ensure structures are in place which enable agreed policies to be carried out effectively in: -
        • Empowerment;
        • Staff training and development;
        • Promotions;
        • Identification of key people;
        • Succession planning of key posts below executive director level;
        • Performance reviews, salary and commission payments;
        • Disciplinary hearings;
        • Employment termination for positions below executive director levels;
        • Recruitment at the various levels up to EXCO (Excluding executive / non-executive directors);
        • Continued maintenance of staff procedures;
        • Equity employment;
        • Adequate statistical information and reporting;
        • Comprehensive payroll services.
    2. Responsibilities

      The Committee will operate in terms of the authorities and instructions agreed to by the board from time to time as provided in the policies.
      In addition, the Committee may:-

      1. Investigate any activity within its terms of reference and report on it;
      2. Seek any information it requires from any employee and all employees are directed to co-operate with any requests made by the Committee;
      3. Obtain legal or independent professional advice and information if it deems it necessary taking into account the availability of the funds;
      4. Agree share issues up to 25 000 per individual or a maximum of 100 000 for the Group, after which board approval is required;
      5. Approve or decline salary recommendations made by management;
      6. Approve salaries at EXCO level, except for executive Directors of Sasfin Bank and Holdings;
      7. Approve non-executive Directors emoluments except for that of the Chairman of the Bank and Holdings boards;
      8. Submit recommendations to the board for the emoluments, bonuses of "share participation" allocations of the Group CEO, executive directors and the Chairman of the Bank and Holdings boards.
    3. Other general responsibilities of the Group HR and Remuneration Committee

      In relation to policy with regards to the following:-

      1. Negotiation with trade unions should this arise;
      2. Establish training needs and develop staff to their full potential, provided this is needed and for the benefit of the company;
      3. Motivate to the boards any executive bonus scheme;
      4. Facilitate medical aid schemes, pension or provident funds;
      5. Agree long service awards policy;
      6. Agree study loans policy;
      7. Ensure annual performance reviews and facilitate statistical information reporting on results;
      8. Ensure annual salary increases fall into the previously agreed limits and facilitate statistical information in this respect;
      9. Review and agree minor staff benefits and expenditure limits such as travel, accommodation, canteen, entertainment, overtime, etc;
      10. Facilitate and review regular and periodic statistical reporting items such as employment numbers, BEE and EE statistics for report-back to management and where necessary to the boards.
  7. SOCIAL AND ETHICS COMMITTEE ("SEC")
    1. Role

      The Committee has an independent role, operating as an overseer and a maker of recommendations to the board of Sasfin for its consideration and final approval. The Committee does not assume the functions of management, which remain the responsibility of the executive directors, the general managers, officers and other members of senior management.
      The role of the committee is to facilitate transformation in Sasfin by inter alia:

      1. Providing leadership to Sasfin's agenda;
      2. Reviewing and approving the policy, strategy and structure to manage social, ethics and transformation issues in Sasfin;
      3. Identifying and managing internal and external impediments to effective social, ethics and transformation implementation;
      4. Making observations and recommendations to the board of Sasfin on the substance, place and results of social, ethics and transformation initiatives adopted by Sasfin;
      5. Developing benchmarks and guidelines to monitor the implementation of Sasfin's social, ethics and transformation strategy;
      6. Ensuring that the strategy goes beyond black economic empowerment ("BEE") ownership to reflect all the pillars of transformation, in particular but not limited to:-
        • achieving a substantial change in the demographic composition of management structures and skilled occupations of Sasfin;
        • promoting initiatives to assist and accelerate affirmative procurement and the development of black enterprises;
        • empowering rural and local communities by enabling access to economic activities, infrastructure and skills.
      7. Assessing and measuring performance of Sasfin's implementation of its social, ethics and transformation strategy with reference to the:
        • United Nations Global Compact Principles;
        • OECD Guidelines for Multinational Enterprises;
        • Employment Equity Act;
        • Broad Based Black Economic Empowerment Act;
        • Good Corporate Citizenship.
      8. Monitor Sasfin's activities with regard to:
        • social and economic development;
        • the contribution to development of communities in and around the different operations;
        • promotion of equality, prevention of unfair discrimination and reduction of corruption;
        • sponsorship donation and charitable giving;
        • environment, health and public safety including the impact of Sasfin's activities and products;
        • consumer relationships including advertising, public relations and compliance with consumer protection law.
      9. Report to shareholders on social, ethics and transformation issues;
      10. Ensure that management has allocated adequate resources to comply with social, ethics and transformation policies, codes of best practice and regulatory requirements;
      11. As and when required consult and communicate with internal and external stakeholders on social, ethics and transformation issues;
      12. The Committee must receive and approve a plan with specific targets from the different business units of Sasfin.  Management should inform this Committee in advance about organisational objectives and plans so that the members of this Committee can make the necessary contribution;
      13. Sasfin must inform the Committee of Sasfin's Human Resources Policies so that the members can understand these policies;
      14. Sasfin and the Committee must develop a workable plan to develop talented employees of Sasfin, especially Historically Disadvantaged South Africans, to qualify for senior positions in Sasfin;
      15. To design and ensure the successful implementation of a strategy for consultation with the Executive Committee ("EXCO") of the Business Units of the Group that positions Sasfin competitively and sustainably for the long term.  For this purpose it is paramount that the strategy:
        • presents a uniform and co-ordinated approach to the fundamental and substantive transformation of Sasfin's operations and its stakeholders;
        • complies with policies, guidelines, regulatory and statutory requirements and any relevant industry codes as they apply and impact on the business affairs of Sasfin.
    2. Responsibilities

      The Committee must perform all the functions necessary to fulfill its role as stated above and including the following:

      1. Identify Sasfin's compliance requirements in terms of all legislation related to BEE including but not limited to the Broad Based Black Economic Empowerment Act (Act 53 of 2003), Employment Equity Act (Act 55 of 1998), the Skills Development Act (Act 97 of 1998), Banks Act (Act 94 of 1990) and Code of Good Practice on Broad-Based Black Economic Empowerment, OECD Guidelines, United Global Compact Principles;
      2. Give guidance to and make recommendations to the board of Sasfin on the development of the strategy of the Group;
      3. Endorse any strategy developed by EXCO for transformation prior to board approval and implementation of the strategy; and
      4. Monitor EXCO's implementation of the initiatives to achieve issues identified in the strategy.

        The Committee should, inter alia, take into consideration the following in the carrying out of the terms of reference:

      5. Any applicable sector charters, specifically the Financial Sector Charter and such other sector charters that may be applicable;
      6. The identity of Sasfin's clients;
      7. Whether Sasfin tenders for government business;
      8. Whether Sasfin's clients tender for government business;
      9. Sasfin's most recent BEE rating;
      10. The resources required to achieve the objectives;
      11. Sasfin's Employment Equity and Skills Development plans;
      12. Corporate social investment; and
      13. The communities around which Sasfin operates.