CORPORATE GOVERNANCE REPORT
During the past year, there were changes to the board. I, Mr Jabulane (Jabu) Mabuza, was appointed chairman of Sun International effective 14 May 2019. At a nomination committee meeting held during November 2019, I was re-appointed as chairman with effect from 1 January 2020. Mr Valli Moosa retired as chairman effective 14 May 2019. Mr Tapiwa Ngara was appointed alternate director to Mr Sam Sithole effective 16 September 2019. Following these board changes, the board committee membership was modified to ensure alignment with King IV™ and to deliver on our strategic objectives.
The board provides ethical leadership from the top and directs the group based on the fundamental principles of integrity, transparency, honesty, accountability, fairness and responsibility. It also maintains a zero-tolerance approach towards unethical conduct.
“The board provides ethical leadership from the top and directs the group based on the fundamental principles of integrity, transparency, honesty, accountability, fairness and responsibility. It also maintains a zero-tolerance approach towards unethical conduct.”
Since 2017, we have focused on building a robust governance framework group-wide. We continue to make good progress aligning Latam’s and Nigeria’s board and committee processes to our South African operations. This includes a best practice integrated governance framework between South Africa and Latam. Latam’s governance framework includes a remuneration and nomination committee as well as a financial review and risk committee. Latam’s committees also report into the Sun International South African board committees. This allows local operations to focus on operational matters, while material governance, risk and strategy issues are elevated to group level. The group company secretary attends all Sun Dreams committee meetings. Mr Enrique Cibie chairs the Sun Dreams board committees, serves as a member of the Sun International remuneration, risk and audit committees, and is a member of the Sun International board. Sun International’s chief executive and chief financial officer are also members of these Latam committees to ensure continuity. Latam’s social and ethics report is tabled at their finance and risk committee meetings as well as the South African social and ethics committee. South Africa’s social and ethics committee monitors sustainability, compliance and money laundering. A lot of the discipline instilled in South Africa’s governance framework has been embedded within Latam’s governance structure too. This includes processes and systems, policies, mandates, terms of reference, committee evaluations, and risk control. Latam also has a dedicated resource (head of legal and compliance) who reports into the director: corporate services in South Africa by way of a dotted line. There were improvements in synergies between the internal audit function at Sun Dreams and Sun International’s director internal audit and group company secretary.
In Nigeria, the Tourist Company of Nigeria (TCN) has a robust governance structure including a statutory audit committee, finance review and risk committee, and a nomination and governance committee that monitors remuneration and governance policies in Nigeria. The group company secretary is a director of TCN and chairs the nomination and governance committee. He is also a member of the finance and risk committee. Further alignments and disciplines have been made to bring Nigeria’s governance framework in line with South Africa’s regarding terms of reference, mandates and policies. All committees operate under approved mandates and terms of reference and all non-executive directors have letters of appointment. The non-executive directors’ fees are determined by the nomination and governance committee and shareholders.
We continued to apply the 16 King IV™ principles, which are detailed in our King IV™ application register. The board is satisfied with the extent of the group’s application of these principles, the group’s regulatory universe, and compliance with the JSE Listings Requirements, as articulated in this report.
Sun International’s risk management committee is satisfied that the group’s integrated risk methodology and ranking system accurately identified, quantified and ranked groupwide risks and opportunities in South Africa, Nigeria and Latam. This risk approach helps the board govern risks to achieve our strategic objectives. It also ensures that Sun International is managed in accordance with principle 11 of King IV™. Specific executives are accountable for managing, monitoring, mitigating and reporting on identified risks and opportunities in their areas of expertise.
The sustainability committee focuses on environmental, health and safety, socio-economic development (SED), enterprise and supplier development (E&SD) and the group’s progress against B-BBEE. Further, the policy revitalisation management sub-committee continues to review, update and consolidate group policies.
The group’s IT governance structures remain resilient and responsive in securing the information stored across the group’s various systems. These structures continue to strengthen group-wide IT investment decision-making practices and enhanced alignment with business needs. During 2019, we focused on becoming a more customercentric organisation, which resulted in a revised IT strategy, with an emphasis on defining a digital roadmap to align with business requirements.
The stewardship of customer information and data protection is paramount. Preparations to adhere to the Protection of Personal Information Act (POPIA) are in progress and the group has engaged an external service provider to ensure compliance with POPIA and the General Data Protection Regulation (GDPR).
The Financial Intelligence Centre (FIC) amendments were successfully implemented and Sun International was selected by the FIC to represent the casino industry during a mutual evaluation by internal assessors from the International Monetary Fund on South Africa’s efforts to implement a risk-based approach. As part of the group’s simplification process, Sun International’s management company, across all casino companies, changed from Sun International Management Limited to Sun International (South Africa) Limited. Sun International continues to engage with the gaming boards about further simplifying the group corporate structure. It is anticipated that the further restructuring will be finalised during 2020.
There were no material instances of non-compliance with relevant legislation and regulations during the year under review. The board is satisfied with the group’s level of compliance in accordance with applicable governance and regulatory requirements and it will continue to review the group’s governance against best practice.
LOOKING AHEAD OUR KEY FOCUS AREAS INCLUDE:
- continuing to embed an ethical culture through regular ethics awareness campaigns and regularly monitoring incidents and providing feedback on findings
- maintaining a permanent central policy repository, which will track the reading of policies, alert employees to updates on any of the policies, and provide competence testing on policies with reporting capabilities
- continuing to remain resilient to cyber threats by developing robust IT systems and processes
- continuing work on the integration of Latam’s and Nigeria’s governance structures with South Africa
We are satisfied that the group meets the requisite standards of governance and compliance, and that matters for our consideration have been robustly interrogated and canvassed. We will continue to apply our minds individually and collectively to guide the group’s strategic direction and to facilitate the group’s delivery of its strategic objectives. I would like to thank the board and management for their ongoing support
I would like to thank the board and management for their ongoing support
26 March 2020
This governance report should be read with the separate subcommittee reports – audit, remuneration and social and ethics – in order to obtain a holistic view of the governance matters under consideration during the year under review. Certain fundamental principles are discussed in this report. These reflect the governance and workings of the board given that the board’s primary role is to exercise effective, ethical and responsible leadership in determining the group’s strategy, overseeing the implementation of this strategy by the management team, and closely monitoring business performance.
SUPPORTING VALUE CREATION THROUGH GOVERNANCE OUTCOMES, SUSTAINABILITY AS WELL AS EFFECTIVE AND ETHICAL LEADERSHIP
The governing body (the board) is the custodian of Sun International’s corporate governance framework. It acknowledges its responsibility to lead the group in an ethical, effective and sustainable manner through the mindful application of King IV™ with substance prevailing over form. This entails the integration of the King IV™ recommended 16 principles and practices that culminate in specific outcomes:
Ethical and cohesive culture
Compliance and accountability
Legitimacy and trust
Performing to strategic expectation
Responsive and transparent stakeholder engagement
The group’s corporate governance and sustainability approaches embrace ethical practices that are responsive to stakeholders and the environment in which we operate. Good corporate governance and sustainability are important enablers in managing the group’s reputation, making strategic progress and creating stakeholder value.
Sun International’s board and executive management collectively have a wealth of knowledge that spans across South Africa and internationally to provide the necessary expertise to guide the group towards achieving its strategic objectives and ultimately creating great memories for our guests, people and stakeholders. The SunWay culture and code of ethics further reinforce positive behaviours to ensure a cohesive ethical culture group-wide.
Sun International’s governance framework and policies are the foundation of responsible, accountable and transparent reporting. Through the various inputs and outputs, the board achieves specific outcomes that support the group’s sustainable value creation. These outcomes include maintaining an ethical culture from the top down and demonstrating our commitment to responsible corporate citizenship. Through effective control of our risk universe, material matters and responsive stakeholder relations, the group maintains compliance with relevant legislation, codes and frameworks. These enable performance according to strategic expectations to enhance legitimacy and trust among our stakeholders.