Corporate Governance

The Board of Directors is responsible for the overall strategy, governance and performance of the Nkwe Group. The Company is an exploration company whose strategy is to add substantial shareholder value through the acquisition, exploration, development and commercialisation of platinum group and associated base metal projects in the Republic of South Africa. The Board has adopted a corporate governance framework which it considers to be suitable given the size, history and strategy of the Company.

Corporate Governance Statement 2015

CORPORATE GOVERNANCE >

 

Principles of Best Practice Recommendations

In accordance with ASX Listing Rule 4.10, Nkwe is required to disclose the extent to which it has followed the Principles of Best Practice Recommendations during the financial year.

Principle 1: Lay solid foundations for management and oversight

The Board has established a framework within the Group that:

  • enables it to provide strategic guidance and effective supervision of management;
  • clarifies the respective roles and responsibilities of Board members and senior executives;
  • ensures a balance of authority so that no single individual has unfettered powers; and
  • identifies significant business risks and ensures that those risks are well managed.

The day-to-day management of the Group has been delegated to the Managing Director, Mr Maredi Mphahlele.

The Board has also adopted a Board Charter which details the functions and responsibilities of the Board and those delegated to management. In addition, letters of appointment have been signed by non-executive directors and each executive director has signed an employment agreement. A copy of the Board Charter has been placed on the Company’s website.

BOARD CHARTER >

 

Principle 2: Structure the Board to add value

The Board has been structured so that it has effective composition, size and commitment to adequately discharge its responsibilities and duties. The names and qualifications of the Directors are stated on pages 11 and 12 along with the date of appointment. Each Director is entitled to receive independent professional advice at the Company’s expense.

The roles of the Chairman and the Managing Director are exercised by Mr Mphahlele. Mr Mphahlele was appointed Chairman following the resignation of Mr Jack Griffen from the Board on 22 October 2007. Not withstanding the fact that the Chairman and Managing Director roles are exercised by Mr Mphahlele, the board believes that given Mr Mphahlele extensive experience, he is able to exercise independence in his role as Chairman, coupled with the fact that the Company is in the process of searching for a new Non-Executive Chairman to meet the independence criteria outlined in the guidelines. M Nkuhlu and Mr S Pandor are not considered independent non-executive directors as they are directors of Blue Nightingale which has a 30% interest in Nkwe SA, a subsidiary of the Company.

The Board believes that it is able to exercise independence and judgement and does possess the necessary skills, expertise and experience required to effectively discharge their duties. The focus has been on the ability of the Board to add value by effectively exercising independence and discharging their duties, rather than on meeting the independence test in the guidelines.

The Board consider that given its current size, a separate Remuneration and Nomination has not been established. This function is effectively achieved with full board participation and is governed by the Remuneration and Nomination Committee Charter which outlines the appointment of Directors and the procedure for selection and appointment of new Directors. A copy of this Charter has been placed on the Company’s website.

REMUNERATION COMMITTEE CHARTER >

NOMINATION COMMITTEE CHARTER >

 

Principle 3: Promote ethical and responsible decision-making

Ethical and responsible decision-making is promoted by the Board in a top-down approach.

The Board has adopted a Code of Conduct to guide the Directors, the Chairman, the Managing Director and other key executives as to practices necessary to maintain confidence in the Company’s integrity and to the responsibility and accountability of individuals for reporting and investigating reports of unethical behaviour.

A copy of the Code of Conduct of integrity, responsibility and accountability for reporting and investigating reports of unethical behaviour has been placed on the Company’s website.

The Board has also adopted a Securities Trading Policy, to guide investment decisions. The Company has not adopted compliance standards and procedures to facilitate the implementation and assessment of the Code of Conduct and Securities Trading Policy. Given the Company’s size, history and strategy it was not considered appropriate to adopt these policies during the financial year. As noted above, the Company will largely comply with these recommendations during future reporting periods.

A copy of the Code of Conduct and Securities Trading Policy has been placed on the Company’s website.

CODE OF CONDUCT >

SECURITIES TRADING POLICY >

 

Principle 4: Safeguard integrity in financial reporting

The integrity of the Company’s financial reporting is a critical aspect of Nkwe’s corporate governance and structures have been implemented during the financial year to verify and safeguard the integrity of the Company’s financial reporting.

It is the policy of the Board that the Company’s financial statements be reviewed or audited, at a minimum, each half year. The Board consider that given its current size, a separate Audit Committee has not been established. This function is effectively achieved with full board participation and is governed by the Audit Committee Charter. A copy of this Charter has been placed on the Company’s website.

The Board has requested that the Managing Director and Financial Controller state in writing that the financial statements present a true and fair view, in all material respects, of the Company’s financial condition and operational results and are prepared in accordance with International Financial Reporting Standards.

AUDIT COMMITTEE CHARTER >

 

Principle 5: Make timely and balanced disclosure

The Board promotes timely and balanced disclosure of all material matters concerning the Company.

The Company has formalised its policy to promote a culture whereby all senior management understand the processes in relation to the timely disclosure of information.

A copy of the Reporting Policy has been placed on the Company’s website.

Principle 6: Respect the rights of shareholders

The Board respects the rights of all shareholders and, to facilitate the effective exercise of those rights, the Company is committed to effective communication with shareholders. This occurs by electronic ASX releases to the market, through Nkwe e-list email communications (registration is available via the Company’s website) and by the provision to shareholders of balanced and understandable information in relation to corporate proposals.

The Company’s general meetings are held at Nkwe’s registered office in Bermuda. Shareholders generally participate in these meetings through the appointment of a proxy. The Company’s external auditor, (based in South Africa and Australia) have been invited to attend these meetings.

Principle 7: Recognise and manage risk

The Company recognises the importance of managing risk and has established systems to assess, monitor and manage risk based on the Company’s size, history and strategy. The exploration and development of natural resources is a speculative activity that involves a high degree of financial risk. Given the size, history and business of the Company, it was not considered by the Board to be a business priority to prepare a risk management policy during the financial year.

The Managing Director and the Company Secretary are responsible for the identification and management of business risks. The Board has obtained a written confirmation from the Managing Director and the Financial Controller that the statement in relation to principle 4 above is founded on a sound system of risk management and internal compliance and control. The Board has obtained a statement confirming that the systems are operating efficiently and effectively in all material respects.

Principle 8: Encourage enhanced performance

Given the size of the Company, there are relatively few executives employed by the Company, however each is subject to an annual performance evaluation. The performance target for each executive is currently aligned to the business targets of the Company in accordance with the position of the relevant executive.

Principle 9: Remunerate fairly and responsibly

The Board is committed to ensuring that the level and composition of remuneration is sufficient and reasonable and that its relationship to corporate and individual performance is defined.

Executive Remuneration Policy

The Company remunerates its senior executives in a manner that is market competitive, consistent with best practice and aligned to the interests of shareholders. Remuneration comprises a fixed salary, determined from a market review, to reflect core performance requirements and expectations of the relevant position, statutory superannuation, and participation in the Company’s employee share option plan as approved by shareholders. The Board is considering the adoption of a bonus plan for senior executives which will be designed to reward actual achievement against specific performance objectives.

Non-Executive Remuneration Policy

Non-executive Directors are paid a fixed fee out of the maximum aggregate amount which has been approved by shareholders. Non-executive Directors are entitled to statutory superannuation but do not participate in the employee share option plan. They may be issued options subject to shareholder approval.

Director remuneration has been disclosed on page 26 and in note 13 of the Annual Report. There are no schemes for retirement benefits, other than statutory superannuation, for any non-executive Director.

Remuneration Committee and Share Option Plan

The Board consider that given its current size, a separate Remuneration Committee has not been established. This function is effectively achieved with full board participation and is governed by the Remuneration, Nomination and Succession Committee Charter. A copy of the terms of reference of the remuneration committee has been placed on the Company’s website.

The Company has adopted an employee share option plan which was approved by shareholders. As at 30 June 2004, the Company had issued 500,000 options under the shareholder approved plan. On 17 August 2004, an additional 3,680,000 options were issued to:

  1. two directors (Craig Oliver and Jack Griffin);
  2. employees; and
  3. consultants.

These options either expired or were exercised in prior years.

A further 2,110,000 options were issued under the plan to employees in January 2005 and 1,650,000 options were issued to consultants in March 2006.

All options issued under the plan are issued in accordance with the thresholds outlined in the shareholder approved plan.

REMUNERATION COMMITTEE CHARTER >

 

Principle 10: Recognise the legitimate interests of stakeholders

The Board recognises legal and other obligations to all legitimate stakeholders. However, the Company has not yet established a code of conduct to guide compliance with legal and other obligations. Given the history, size and business of the Company it was not considered by the Board to be a business priority to prepare such a code of conduct during the reporting period. The implementation of a formal policy will be considered by the Board at an appropriate time in the future.

CONTINUOUS DISCLOSURE >