01

Our Board Charter

The foundation for our governance principles and practices. Our Board Charter sets out how the corporate governance provisions in the Companies Act No 71 of 2008 of South Africa; the Banks Act, 1990 as amended, the Financial Sector Regulations Act No. 9 of 2017, the JSE Listings Requirements and the King IV Report on Corporate Governance for South Africa, 2016™ will be put into practice.

Our Board Charter has four pillars:

  • Roles and responsibilities of our board
  • Matters reserved for our board
  • Role profiles of our group chairman, lead independent director, chief executive officer and our directors collectively and individually.  The roles of our group chairman and chief executive officer are separate
  •  Board committees’ mandates

02

Board responsibilities
  • Creating and delivering sustainable shareholder value
  • Ensuring an appropriate balance between promoting long-term sustainable growth and delivering short-term performance
  • Actively engaging management in setting, approving and overseeing execution of the strategy and related policies
  • Ensuring that management maintains internal controls for assurance of effective and efficient operations, and compliance with laws and regulations; and does this within an ethical environment
  • Providing an overall strategic direction within a framework of incentives and controls
Matters reserved for our board
  • Objectives, strategy, short and medium-term plans and performance monitoring against agreed criteria
  • Annual financial statements, interim reports, dividends and related financial matters
  • Code of ethics
  • The appointments to and removals from the board (including the chairman, group chief executive, and executive and non-executive directors)
  • Delegations of authority to the group chief executive officer
  • Board committee mandates, authorities and membership
  • Risk appetite
  • Significant company policies
  • Our corporate governance philosophy and ongoing governance compliance
  • Compliance with laws and regulations
  • Risk management and internal control
  • Stakeholder management, including communication
  • Board and individual director performance evaluation

03

Board committees

Our board has established ten (10) committees to assist it in the discharge of its duties and responsibilities but remains ultimately responsible for decisions that the committees make. Each committee operates within a terms of reference approved by the board.

Directors' Affairs Committee

Assists the Board in establishing and maintaining an appropriate system of corporate governance for the Group and material subsidiaries. This includes board and committee composition; induction of new Board members; director training and skills development; board and committee effectiveness evaluations, reviewing and proposing governing policies; monitoring the governance structures of subsidiary entities and considering matters of regulatory and reputational risk.

Group Audit and Compliance Committee

Is accountable for accounting policies and the annual financial statements and reports; oversees the quality and integrity of the Group’s integrated reporting; is the primary forum for engagement with internal and external audit; and monitors the Group’s internal control and compliance environment.

Group Risk and Capital Management Committee

Assists the Board with matters relating to risk, capital and liquidity management within the Group. It monitors the implementation of the Enterprise Risk Management Framework, and application and utilisation of risk appetite and the related management actions in regard thereto. It receives assurance that processes are in place to comply with laws and regulations pertaining to risk, capital and liquidity management in the relevant jurisdictions.

Group Remuneration Committee

Assists the Board with remuneration and incentive arrangements, the structure of short-, medium- and long-term awards, policy and disclosures (including stakeholder engagement related thereto), and executive appointments.

Social and Ethics Committee

Monitors:

  • Key organisational health indicators, including ethics management; talent retention and acquisition; labour turnover; wellness; learning and development reach and spend; employee relations; diversity and inclusion; conduct and reputation risks; and
  • The Group’s activities, having regard to legislation and codes of best practice on matters relating to: social and economic development; good corporate citizenship; ethics and conduct; sustainable development; labour and employment; consumer relations; stakeholder management; transformation; the environment, and health and safety.
Information Technology Committee

Assists the Board with effective oversight and governance of technology and information for Absa. King IV distinguishes between governance oversight of (i) the organisation’s information assets, and (ii) the technology infrastructure used to generate, process and store that information. The focus is on resilience and stability; architecture; data management; security (cyber and other), and digitisation. The technology impact of the Separation is a key focus, by introducing new systems, and managing the cost and the risk in relation thereto.

Board Finance Committee

Assists the Board in approving certain levels of investment and dis-investment transactions within its mandate. The committee is also mandated to consider and approve the Group’s dividend declarations within the parameters determined by the board, and to finalise the profit commentary as it relates to interim and year-end financial results. The committee considers and recommends to the Board the medium-term plan developed in terms of the Group strategy.

Credit Concentration Risk Committee

Considers and approves all large exposures, including single-name exposures, key country risk limits, with reference to the credit risk appetite of the Group as approved by the Board from time to time, as well as to monitor industry, sector, and single name trends and exposures.

Models Committee

Is the designated committee responsible for approving Absa’s material risk models on inception and annually thereafter, in accordance with guidelines set out in the relevant policy and by the South African Reserve Bank.

Separation Oversight Committee

Provides oversight of the execution of the Separation of Absa from Barclays, in particular the technology change projects; and obtains assurance from appropriate providers regarding these activities. Specific decisions in relation to the Separation activities rests with the relevant Board committees, in accordance with their respective mandates. This committee will remain in place until the completion of the Separation (approximately three years).

Read more in our 2018 Integrated Report

04

King IV application

The King IV Report on Corporate Governance for South Africa, 2016TM was launched by the Institute of Directors in Southern Africa on 1 November 2016 as a set of voluntary principles and leading practices, with an apply and explain policy. The Johannesburg Stock Exchange requires listed companies to apply King IV, which became effective on 1 April 2017. 

Read a report on our application of King IV