Corporate Governance

PHILOSOPHY Governance at Growthpoint meets with or exceeds the provisions and principles of the King III Report and Code, which are also followed for purposes of annual reporting. In addition to the King III principles, specific, meritorious corporate governance criteria employed by Growthpoint’s institutional investors are also considered and applied as required. These include the Code for Responsible Investment in South Africa (CRISA). As part of Growthpoint’s and the Board’s commitment to sound governance, the directors endeavour to ensure that the business is conducted with integrity and accountability, as per the Code of Ethics incorporated in the Board Charter. This entails on-going improvement of structures, policies and practices implemented to enhance corporate governance in the company’s best interests and for the ultimate benefit of all stakeholders. The company has remained compliant with the Companies Act 2008, as amended (the Act). The Board Charter as well as the Terms of Reference of Board committees are aligned with the provisions of the Act, as are Growthpoint’s own statutes and those of its subsidiaries.

2015 CORPORATE GOVERNANCE ASSESSMENT The company has completed its annual governance self-assessment by applying an accredited governance assessment tool, with a very satisfactory outcome (Overall rating: AAA – highest accreditation), as reflected in the tables that follow:

The Board is guided in all matters by the Board Charter which sets out its responsibility

KING III GOVERNANCE REGISTER AT: 25 AUGUST 2015

AAA	Highest application	AA	High application	BB	Notable application	B	Moderate application	C	Application to be improved	L	Low application

		Growthpoint Properties Limited – 1987/004988/06	IoDSA GAI score	Applied/ partially applied/ not applied
+		Chapter 1: Ethical leadership and corporate citizenship	AAA	Applied
+		Chapter 2: Boards and directors	AAA	Applied
+		Chapter 3: Audit committees	AAA	Applied
+		Chapter 4: The governance of risk	AAA	Applied
+		Chapter 5: The governance of information technology	AAA	Applied
+		Chapter 6: Compliance with laws, rules, codes and standards	AAA	Applied
+		Chapter 7: Internal audit	AAA	Applied
+		Chapter 8: Governing stakeholder relationships	AAA	Applied
+		Chapter 9: Integrated reporting and disclosure	AAA	Applied
		Overall score	AAA

		Growthpoint Properties Limited – 1987/004988/06	Fully complied/ review
+		JSE Corporate Governance Listing Requirement	Fully complied

	Governance element		Brief summary of the application of King III principles
1.	Ethical leadership and corporate citizenship		The Board: • provides effective supervision and leadership based on ethical imperatives • directs strategy and operations for sustainable business • annually reviews Group strategy • ensures Growthpoint is a responsible corporate citizen • ensures company ethics are managed effectively, under the auspices of the Social, Ethics and Transformation Committee in terms of the Act • tracks measurements and key performance indicators for effective corporate social responsibility, green initiatives and programmes dealing with environmental sustainability • monitors ethical risks and opportunities
2.	Boards and directors		The Board: • ensures that it acts in the best interests of the company • acts as the focal point for, and custodian of, corporate governance and the governance of risk including information technology risk • recognises that strategy, risk, performance and sustainability are inseparable • endeavours to ensure that the Audit Committee and the internal audit function remain effective and independent • ensures that Growthpoint complies with applicable laws and considers adherence to non-binding rules, codes and standards • ensures that the roles of Board Chairman and the company’s Chief Executive Officer are separated • maintains a balance of power, with a majority of independent non-executive directors • ensures the Chairman is an independent, non-executive director whose role is defined in the Chairman’s Charter • annually elects the Chairman of the Board and committees (save for the Audit Committee whose members and Chairman are elected at annual general meetings) and would also deal with the succession of the Deputy Chairman if necessary • appoints the Chief Executive Officer • includes a Financial Director in a full-time, executive capacity, in accordance with the JSE Listings Requirements • implements and periodically reviews an effective succession plan for senior management via the Remuneration Committee, which process is monitored by the Risk Management Committee • works within an established framework for effective delegation of authority • appoints directors by involving the whole Board, on recommendation of the Nomination Committee, through a formal process governed by the Nomination Committee’s Terms of Reference and by the company’s MOI (the removal of a director without shareholder approval, in terms of section 71(3) of the Act, is incorporated into the company’s MOI) • ensures bespoke induction and development of new directors • is assisted by a competent, suitably qualified and experienced Company Secretary who is not a director and who maintains an arm’s-length relationship with the Board (formal assessment performed by the Board in June 2015) • performs self-evaluation of the Board and its committees annually, with formal feedback. Directors are not individually assessed but the Board and committee self-assessment gives members the opportunity to comment on the performance and contribution of their colleagues • annually assesses and has, in May/June 2015, assessed the independence (or not) of every non-executive director including those with tenures exceeding nine years • delegates to well-structured, appropriately constituted committees without abdicating its own responsibilities • applies the governance framework to Group subsidiaries and their boards • ensures, on the Remuneration Committee’s recommendations (based on expert outside opinion) that directors and executives are remunerated fairly and responsibly • ensures that remuneration of the directors is disclosed fully and individually • obtains approval from the shareholders at each AGM for non-executive directors’ fees in respect of the ensuing financial year • asks shareholders at the AGM for approval of Growthpoint’s remuneration policy (currently a non-binding vote in South Africa)
3.	Audit committees		The Audit Committee: • is effective and independent, and ensures that its members, including the Chairman, are suitably skilled and experienced non-executive directors • oversees the Group’s integrated reporting and reviews and disclosure of sustainability issues • satisfies itself annually of the expertise, resources and experience of the company’s finance function and of the Financial Director’s suitability • oversees the internal audit function, receives internal audit reports at each of its quarterly meetings and approves the annual internal audit plans • plays an integral role in the Group’s overall risk management process • specifically oversees financial reporting risks, internal financial controls, fraud risk as it relates to financial reporting, and IT risk as it relates to financial reporting • recommends the appointment of the external auditor and oversees external audits • approves and implements a policy for non-audit services provided by the external auditor • engages external specialists on material sustainability and integrated reporting aspects • reports quarterly to the Board and annually to shareholders • annually assesses its effectiveness as a committee
4.	The governance of risk		The Board is responsible for the governance of risk, which it manages through an independent Risk Management Committee. This Committee also monitors the company’s compliance with the qualifying REIT criteria laid down by the JSE’s Listings Requirements (Section 13), which it may delegate to the Audit Committee. The governance of risk is covered later in this report
5.	The governance of information technology (IT)		• The Board is responsible for the governance of IT risk via the Risk Management Committee, and for governance of financial reporting risk via the Audit Committee • The Chief Information Officer, who attends meetings of both the Risk Management and Audit committees, and is an Exco member, is responsible for the IT governance framework • The external auditors periodically assess IT governance against King III • IT strategy is part of the Group’s strategic plan and business processes • The Board tracks and evaluates material IT investments and expenditure to ensure IT infrastructure is managed efficiently • IT forms an integral part of the company’s risk management and IT internal audits are performed periodically by qualified and experienced outside parties
6.	Compliance with laws, rules, codes and standards		The Board: • ensures that the company complies with applicable laws and considers adherence to non-binding rules and codes • makes compliance a standing item on the Risk Management Committee agenda • recognises that compliance is an ethical imperative • acknowledges that compliance risk is an integral part of Growthpoint’s risk management process • ensures effective compliance frameworks and processes are in place • ensures that compliance officers are well qualified, and have ongoing interaction with the Risk Management Committee and/or executive management on compliance matters • has a working knowledge of applicable laws, rules, codes and standards, as well as the potential impact on the company and its business
7.	Internal audit		• The Board, via the Audit Committee, ensures that internal audits are effective and risk based • The Internal Audit Charter is approved and periodically reviewed by the Audit Committee • The Head of Internal Audit and Risk Management reports to the Audit Committee quarterly, on the design and operating effectiveness of the company’s internal controls • Internal Audit is strategically positioned to achieve its goals • The internal audit function is appropriately resourced for the complexity and volume of work required • The Head of Internal Audit and Risk Management has a standing invitation to attend Executive Management Committee (Exco) meetings
8.	Governing stakeholder relationships and dispute resolution		• The company has a formal investor relations policy and an Investor Relations Officer • The Board recognises that stakeholder perceptions can affect the company’s reputation and seeks to ensure the equitable treatment of all stakeholders • Management proactively deals with stakeholder relationships by balancing various stakeholder interests appropriately and in the company’s best interests • The Board ensures that disputes are resolved as effectively, efficiently and expeditiously as possible • Where necessary, resolution of both internal and external disputes relies on the Association of Arbitrators of SA. Employees involved in any such process will be assisted by the company’s legal advisor • Communication processes and policy for interaction with the media and stakeholders are approved by the Board
9.	Integrated reporting and disclosure		• The Board is responsible for the integrity of the company’s integrated report, with the assistance of the Audit Committee • Annual sustainability reporting and disclosure is overseen by the Audit Committee • Compliance with the Global Reporting Initiative, as well as the formal guidelines on reporting by the Integrated Reporting Committee of South Africa (IRC), is assessed internally and externally

The full register of the company’s application of the King III Principles can be found on the company’s website.

THE BOARD OF DIRECTORS

During the year under review and as at the date of issue of this report, Growthpoint had a unitary board comprising 14 directors in total: three executive directors and 11 non-executive directors, nine of whom are and were throughout the past financial year, independent.

The Board’s role is to provide strategic direction and leadership, to promote shareholder value and enhance the sustainability of the business, to the benefit of the company and all its stakeholders. To ensure they act with independence and integrity, directors are required to abide by Growthpoint’s Code of Ethics and policies promoting ethical behaviour.

The directors annually declare their financial interests, as per the Act. Directors’ interests in the company’s shares in issue on 30 June 2015 are set out in the directors’ report to the annual financial statements (AFS).

The majority of the non-executive directors are independent. In line with the King III principles, non-executive directors who, directly or indirectly, have an interest in Growhtpoint’s BEE structure, as well as those with related-party interests, are not regarded as independent.

The business experience of each of the executive and non-executive directors enables them individually, and as a board, to evaluate strategy, assess the company’s performance and at all times to act in Growthpoint’s best interests.

Non-executive directors have unrestricted access to company information and meet the management without the presence of executive directors. To help them fulfil their responsibilities effectively, non-executive directors may also seek independent professional advice, which is paid for by the company. The Audit Committee provides, as a standing item on the agenda of regular meetings, for combined or separate closed sessions with management, external auditors and the internal auditor to be held after every meeting as and when necessary.

The King III Report recommends that the independence of non-executive directors serving more than nine years be assessed. The Board has, during May/June 2015, reviewed the status of all of the non-executive directors, in terms of the JSE-applied definition of independence as contained in the King III Report, including the following directors with tenures exceeding nine years who have been assessed as indicated below:

Name of director		Year of appointment		Number of years in service		Status
Mzoli Diliza*		2001		14 years		Not independent
Peter Fechter		2003		12 years		Independent
John Hayward		2001		14 years		Independent
Hugh Herman		1995		20 years		Independent
Francois Marais		2003		12 years		Independent
Herman Mashaba		2006		9 years		Independent
Ragavan Moonsamy		2005		10 years		Independent
Frederick Visser		2001		14 years		Independent

* BEE partnership

GROWTHPOINT PROPERTIES AUSTRALIA LIMITED (GOZ)

GOZ reports to Growthpoint’s Risk Management Committee annually on the applicability of the King III principles to its governance policy, as well as additional parameters required by Australian law. GOZ’s governance policy conforms with or exceeds the major principles of the King III Code.

Growthpoint directors hold positions on GOZ’s Board and committees, as follows:

Board: LN Sasse, EK de Klerk and JF Marais

Audit, Risk and Compliance Committee: EK de Klerk

Nomination, Remuneration and HR Committee: LN Sasse (Chairman) and JF Marais

RE-ELECTION OF DIRECTORS AND NEW APPOINTMENTS

Directors who retire by rotation or otherwise at AGMs are those longest in office and those appointed by the Board since the last AGM. Retiring directors are named in the directors’ report and AGM Notice included with the Notice and Proxy of Annual General Meeting and Summarised Financial Statements. The Board, through the Nomination Committee, recommends (or not), as the case might be, retiring non-executive directors for re-election or election at the AGM.

Appointments of new directors are handled by the full Board, on the recommendation of the Nomination Committee. New directors are adequately informed about Growthpoint’s business and policies, as well as meeting dates and procedures. All directors receive the Board Charter during induction and once a year for review at the appointed Board meeting.

One-third or nearest that number of the non-executive directors are subject to retirement by rotation and re-election by shareholders at the AGM each year.

Executive directors are, in terms of Growthpoint’s MOI, not subject to retirement by rotation at the AGM. This is in line with King III recommended best practice, and supported by the JSE, for South African listed companies.

ATTENDANCE AT MEETINGS

The Board meets quarterly and on an ad-hoc basis, if required. The quorum requirements of Growthpoint’s MOI are always considered when scheduled, ad-hoc or special meetings are convened. Due regard is given to recusal of directors where conflicts of interest or related-party positions exist or could arise.

Details of attendance at Board and committee meetings in FY15 are set out below. Board members are encouraged to serve on at least two Board committees.

Four scheduled Board meetings were held during FY15. In all cases in FY15 where directors or committee members were unable to attend a meeting, the Board or respective committee accepted their justified leave of absence.

Attendance at meetings

Director

Board

Audit

Risk Management

Property

Social, Ethics and Transformation

Remuneration

Nomination

JF Marais

4/4

1/6*

3/4*

5/5

1/1

EK de Klerk

4/4

4/6

4/4

4/4

5/5

0/1

MG Diliza

3/4

4/4

4/4

1/1

PH Fechter

4/4

6/6

4/4

1/1

LA Finlay

4/4

6/6

4/4

0/1

JC Hayward

4/4

6/6

4/4

1/1

HS Herman

4/4

4/4

5/5

1/1

HSP Mashaba

4/4

5/5

SP Mngconkola

4/4

4/4

3/4

R Moonsamy

4/4

4/4

4/4

NBP Nkabinde

4/4

4/4

4/4

LN Sasse

4/4

1/6*

4/4

4/4

5/5

1/1

CG Steyn**

2/2

4/4

2/2

FJ Visser

4/4

4/4

4/5

G Völkel

4/4

6/6

4/4

4/4

4/4

* By invitation
** Retired 18 November 2014

DEALINGS IN THE COMPANY’S SHARES

In terms of both Group policy and JSE Listings Requirements, directors of both the Group and its major subsidiaries, in addition to the Company Secretary, must obtain prior written clearance from the CEO and/or Chairman if they intend to deal in Growthpoint shares, whether directly or indirectly. This policy also applies to Exco members, directors of major subsidiaries and other members of senior management.

Directors and employees who are privy to price-sensitive information may not deal, directly or indirectly, in Growthpoint’s shares until such information is made public.

Closed periods are imposed on directors and staff in relation to interim and annual financial results and, from time to time during specific corporate actions.

DIRECTORS’ REMUNERATION

Directors’ remuneration is subject to annual review by the Remuneration Committee (RemCo), and subsequent approval by the Board of the proposed fees to be submitted for approval at the AGM. The fees for FY15 were approved at the AGM held on 18 November 2014.

The most recent review on non-executive directors’ remuneration included benchmarking by professional consultants. The RemCo proposals for FY16 were approved by the Board on 25 August 2015. These recommendations will be presented at the AGM to be held on 17 November 2015. At the same time, shareholders will be asked to approve, by way of a non-binding vote, the company’s overall remuneration policy for the coming year. The Remuneration report containing this information is included in the Key Matters section of this report.

Directors’ remuneration is disclosed in the AFS in line with JSE Listings Requirements. The key performance areas by which directors and management are measured are also described in the Remuneration report.

THE CHAIRMAN

The roles of the Chairman and CEO are separate and they operate independently of each other.

The Chairman, Mr JF Marais, is an independent, non-executive director. His responsibilities are contained in, but are not limited to, the Chairman’s Charter. They include:

•	providing overall leadership of the Board and its committees
•	leading and managing the business of the Board, without limiting the Board’s collective responsibility
•	serving as the link between the Board and management of Growthpoint and, with the Remco, assessing the performance of the CEO at least once a year
•	assessing, in liaison with the CEO, the performance of the other executive directors at least annually.

BOARD RESPONSIBILITIES AND ACCOUNTABILITY

The Board is guided in all matters by the Board Charter which sets out its responsibilities (available on the company’s website or from the Company Secretary).

These include:

•	governing, directing and monitoring the performance of the business as a going concern
•	approving the company’s strategic objectives
•	ensuring effective management of the company
•	managing risks to the business, mainly through the Risk Management and Audit committees
•	providing direction to management
•	presiding over material business decisions
•	documenting the Board’s Terms of Reference, purpose, responsibilities and authority
•	governance matters such as Board membership, meeting procedures and ethical conduct.

The Board (either itself or through the Nomination Committee) periodically reviews its composition relative to skills, expertise and experience needed to provide strategic direction and leadership, and representivity in terms of gender and race.

The non-executive directors are independent of management and are free from relationships that could affect their judgement as directors. The Board is accountable to the company, but is always cognisant of stakeholder expectations and interests. In its decision-making, the Board adopts an inclusive approach to governance.

In June/July 2015, the Board, along with the Audit, Property, Risk Management and Social, Ethics and Transformation committees, conducted a formal self-assessment process. The overall outcome was positive, and feedback was provided to the Board and the respective committees at meetings held in August 2015.

THE COMPANY SECRETARY

The Company Secretary, Mr RA Krabbenhöft, was formally evaluated by the directors in June 2015 and has been found to be suitably competent, experienced and qualified for his position. The evaluation followed the format suggested in King III. The Company Secretary holds a Fellowship with Chartered Secretaries Southern Africa (1993) and the Chartered Institute of Business Management (1993) and a Diploma in Corporate Governance (RAU – 1997), and has been involved as a Company Secretary and Group Company Secretary of JSE-listed companies since 1987. He is not a director of the company but a full-time employee and maintains an arm’s length relationship with the Board and the directors of the company.

CODE OF ETHICS AND BUSINESS CONDUCT

The Code of Ethics aims to ensure that Growthpoint conducts its business in line with the highest ethical standards. The code in particular seeks to ensure compliance with relevant legislation and regulation, in a manner that is beyond reproach. The Code is available to employees and other stakeholders, as are Growthpoint’s mission and value statements. Both the Code of Ethics and Growthpoint’s mission and value statements are posted on the company website.

THE COMPANY’S CODE OF ETHICS IS AS FOLLOWS

The Board of Growthpoint commits itself to ensure, as far as it lies within its power to do so, that the company and its agents conduct the business according to the highest ethical standard and, in particular:

•	comply with all laws of the country that affect the company
•	comply with the rules of the JSE Limited
•	not act in any way that may be regarded as harmful business practice
•	act in the best interests at all times of all the stakeholders
•	are transparent in disclosing all material information that may influence investors and potential investors
•	conduct the business as a responsible corporate citizen, having regard for the impact the business may have on the public and the environment
•	trade in securities of the company only in open periods and with the prior written permission of the Chairman and/or CEO
•	not trade in competition with the company
•	not hold positions that give rise to a conflict of interests and, should any potentially conflicting situations arise, to make full, prior written disclosure to the Board and abstain from participating in any discussion or voting on the matter, unless the Board consents thereto.

POLICIES PROMOTING ETHICAL CONDUCT

Growthpoint has various policies in place to promote and safeguard ethical behaviour and integrity among management and employees.

These policies include:

•	the company’s mission and value statements
•	employee integrity, to encourage employee compliance with policies and standards of best practice
•	guidelines regarding gifts, entertainment and inducements
•	whistle-blowing and protected disclosures, to encourage employees to raise concerns about workplace malpractice without fear of vicitmisation or reprisal
•	substance abuse and sexual harassment, forbidding these practices in the organisation.

The directors abide by a written Code of Ethics that forms part of the Board Charter.

COMPLIANCE FRAMEWORK

Statutory and regulatory compliance is a standing item on every agenda for the Risk Management Committee and is addressed by the Head of Internal Audit and Risk Management in quarterly reports to the committee.

Compliance with accounting standards and financial reporting requirements is overseen by the Audit Committee. Compliance officers are appointed throughout Group operations based on their expertise. The Board receives feedback quarterly from the Chairmen of both the Audit and Risk Management committees, in addition to the minutes of the preceding Audit and Risk Management Committee meetings.

Compliance with the Code of Ethics is monitored directly and indirectly. The Group has in place a formal mandatory authorisation process for dealings in the company’s shares, formal procedure for both acceptance and granting of gifts and inducements, disclosure of conflicts of interest, as well as formal levels of authority and delegated signing authorities for business transactions.

During FY15, Growthpoint had no incidents of major non-compliance, fines or prosecutions linked, for example, to anti-competitive practices or other governance and economic issues, or non-compliance with its Code of Ethics.

INTERNAL AUDIT

The internal audit function, with the exception of internal audit for information technology, is provided in-house by the Head of Internal Audit and Risk Management. Its scope includes:

•	meeting with the Audit Committee to agree an annual audit plan
•	preparing an annual audit strategy for approval by the Audit Committee
•	attending meetings of, and reporting to, the Audit Committee
•	meeting with the external auditors to plan and promote their use of internal audit’s work
•	carrying out internal audit work, including the testing of controls, in line with the approved internal audit plan.

IT internal audit services are provided by suitably qualified and experienced outside parties, in consultation with the Head of Internal Audit and Risk Management and the Chief Information Officer. The Head of Internal Audit and Risk Management has unrestricted access to the Chairmen of the Audit and Risk Management committees.

EXTERNAL AUDIT

KPMG Inc. acts as external auditor for Growthpoint and its subsidiaries. The independence of the external auditor is reviewed every year by the Audit Committee with the auditors. Furthermore, the external auditors attend all Audit Committee and Risk Management Committee meetings and have unrestricted access to the Chairmen of both committees.

BOARD COMMITTEES

Committees established by the Board assist the Board in the discharge of its duties.

Board committees have unrestricted access to company information and any resources required to help them fulfil their responsibilities, including professional advice which is paid for by the company.

Every Board committee has Board-approved Terms of Reference, relevant extracts of which are included in this report. The Terms of Reference of every Board committee are periodically reviewed and are aligned, to the extent possible, with the King III Report and Code, the JSE Listings Requirements where applicable and the Act.

The Board determines and amends, as necessary, the scope and responsibilities of the committees, as well as the appointment of new committee members. The Board and its committees conduct annual self-assessments which are coordinated by the respective Chairpersons. Formal feedback is given to each committee and the Board.

To promote sound corporate governance and optimise the sharing of information, the CEO, Financial Director and other executive directors are present at selected Board committee meetings, by standing invitation. The Company Secretary attends all Board committee meetings.

CHAIRMEN’S COMMITTEE

A Chairmen’s Committee comprising the Board’s Chairman (as Committee Chairman) and the Chairmen of the Board’s committees meets on an ad-hoc basis and serves as a forum for:

•	Chairmen of the committees to raise matters which they or their committees feel need to be raised with the Board
•	executive management to raise matters or emerging issues
•	discussion of aspects of governance that might require attention from time to time.

The committee will also consider best approaches to matters, which will enable the Board’s Chairman to take guidance from senior directors.

AUDIT COMMITTEE

The Audit Committee comprises three independent non-executive directors, including the Chairman of the Risk Management Committee. The Managing Director, Financial Director, external auditor, Financial Manager, Head of Internal Audit and Risk Management and Chief Information Officer are present at meetings, by standing invitation.

The committee maintains an effective working relationship with the Board, management and other Board committees, notably the Risk Management Committee, whose minutes are noted at Audit Committee meetings. This ensures that risk management controls and the status of specific risk issues dealt with by the Risk Management Committee are noted.

The committee has five scheduled meetings a year with one meeting dedicated to the review of the company’s IAR and one to the AFS. To assist the Board in its supervisory and governance responsibilities, the committee ensures that:

•	adequate processes are in place to safeguard the company’s assets
•	adequate accounting records are maintained
•	design-effectiveness of internal controls is regularly reviewed and effective systems of internal control are maintained
•	an open channel of communication is maintained between directors, management and accounting staff, as well as both internal and external auditors
•	financial information is reviewed at least quarterly
•	AFS are reviewed, prior to recommendation to the Board for approval
•	an external auditor is appointed at all times to determine the scope for each external audit.

The committee reviews and sets the auditor’s fees for annual audits.

The committee is satisfied that the external auditor is independent and that the FY15 audit has been carried out without any restriction of the audit’s scope.

The committee satisfies itself annually of the expertise, resources and experience of the company’s finance function and of the Financial Director’s suitability.

The report of the Audit Committee to shareholders is presented in the AFS.

RISK MANAGEMENT COMMITTEE

The Risk Management Committee comprises four independent non-executive directors, including one member of the Audit Committee. The CEO, Financial Director, Head of Internal Audit and Risk Management, Head of Human Resources, Chief Information Officer and external auditor are present at meetings, by standing invitation.

The committee, which meets at least quarterly, oversees management compliance with risk management policies and procedures, and reviews the adequacy of the risk management framework relative to risks identified.

The Risk Management Committee is assisted by Internal Audit and Risk Management for its reviews of risk management controls and procedures. The Risk Management Committee reports quarterly to the Board.

The main objective of the committee is to protect the quality, integrity and reliability of the Group’s risk management by:

•	assisting the Board in matters of corporate accountability and associated risks
•	ensuring risk policies and strategies are effectively managed
•	monitoring external developments that could affect corporate accountability
•	reviewing and assessing the integrity of risk control systems
•	defining risk management policies and the risk management function, as well as the scope of Enterprise Risk Management (ERM)
•	ensuring independent and objective oversight and review of information provided by management on corporate accountability and associated risks.

PROPERTY COMMITTEE

The Property Committee comprises four non-executive directors. It assists the Board with decisions regarding Growthpoint’s property portfolio, as well as review and approval of property budgets and valuations.

The CEO, Managing Director, Financial Director, Fund directors and the valuer are present at meetings, by standing invitation.

The committee schedules four meetings a year. Its role is to:

•	consider and decide on proposed acquisitions and disposals in terms of the levels of authority
•	consider and decide on proposed capital expenditure
•	periodically review due diligence processes for acquisitions
•	review and make recommendations to the Board regarding Growthpoint’s annual budgets, including capital expenditure budgets
•	provide a high-level review of annual property valuations prior to their submission to the Board and Audit Committee
•	periodically review and assess the company’s approach to investment in physical property assets and letting enterprises.

REMUNERATION COMMITTEE

The Remuneration Committee consists of the Board’s Chairman, Deputy Chairman and two independent non-executive directors. The CEO, Managing Director and the Head of Human Resources attend meetings by invitation.

The committee, which meets at least quarterly, assists the Board by ensuring that:

•	a formal and transparent procedure for executive and senior management remuneration is established and maintained
•	remuneration for executive directors, senior management and staff (including incentives, grants and other benefits) is set in order to attract and retain people of the required calibre.

The committee furthermore helps determine the key components of remuneration, in conjunction with performance review criteria for executive directors and senior management. To this end, the committee:

•	determines specific remuneration packages for executive directors of the company taking into account information from comparable companies
•	periodically reviews the terms and conditions of executive directors’ service agreements
•	determines criteria for measuring the performance of executive directors
•	approves proposed allocations to eligible participants in the company’s staff incentive scheme
•	establishes remuneration credibility with shareholders and other stakeholders
•	makes recommendations to the Board regarding the remuneration of non-executive directors, which is also benchmarked from time to time
•	coordinates its activities with the Chairman of the Board and CEO, and consults them both in formulating remuneration policy and when determining specific remuneration packages
•	reviews and approves succession plans for executive management, which activity is monitored by the Risk Management Committee.

NOMINATION COMMITTEE

The Nomination Committee consists of the members of the Chairmen’s Committee and is chaired by the Board’s Chairman.

The committee is responsible for:

•	making recommendations to the Board on non-executive and executive director appointments as well as the Board’s composition as a whole, after identifying and screening candidates for Board approval and appointment
•	reviewing, and making recommendations on, the Board’s structure, size, and the balance between executive and non-executive directors
•	succession planning for the Chairman.

SOCIAL, ETHICS AND TRANSFORMATION COMMITTEE

This committee’s scope includes the statutory duties of a social and ethics committee in accordance with the Act.

The committee comprises five non-executive directors. The Managing Director, Financial Director, Head of Human Resources, Head of Corporate Social Responsibility, National Facilities Head and National Developments Head attend meetings of the committee.

The committee meets at least four times a year. Besides the statutory duties of this committee, it also evaluates, monitors and makes recommendations to the Board regarding:

•	broad-based black economic empowerment initiatives and opportunities
•	enterprise development and related training initiatives
•	the company’s B-BBEE equity ownership arrangements, funding structures and, from time to time, potential new B-BBEE equity ownership participants
•	corporate social responsibility and investment and respective annual budgets
•	the preferential procurement spend
•	Property Sector Transformation Charter compliance
•	employment equity
•	periodic reviews of Growthpoint’s transformation philosophy and strategy
•	environmental, social and governance matters, including carbon emissions and climate change.

EXECUTIVE MANAGEMENT COMMITTEE (EXCO)

Exco comprises the executive directors, Fund directors, Head of Human Resources, Head of Marketing, the Heads of the Company’s regional offices, the Chief Information Officer, the Corporate Treasurer, the Head of Corporate Social Responsibility and the Head of Investor Relations. The CEO chairs the committee and the Company Secretary and Assistant Company Secretary attend all meetings. The committee meets monthly and reviews operations, quarterly results (actual vs. budget and projections), company policy and strategic issues. A sub-committee of Exco (Stratco) also reviews the Group’s strategy and budgets before these are submitted to the Board and its responsible committees for approval.

DEAL FORUM

The Deal Forum comprises the Exco members and is chaired by the CEO. Its primary purpose is to discuss, consider and, if appropriate, approve:

•	potential acquisitions or disposals from R20 million upwards
•	all developments or substantial redevelopments
•	due diligence reports for proposed transactions
•	completed deals as necessary.

The Deal Forum makes recommendations to the Property Committee and/or the Board regarding proposed acquisitions and disposals of physical property assets and letting enterprises that exceed its level of authority.

INVESTOR RELATIONS AND ACCESS TO INFORMATION

The Board is committed to transparency and disclosure of relevant information to all stakeholders.

Such disclosure includes communicating information on:

•	company strategy and performance
•	Board practice
•	The company’s Code of Ethics
•	Growthpoint’s indirect impacts
•	Business value and risk management.

In all communication to stakeholders, the emphasis is on timeliness, objectivity, honesty, relevance and balance. Communication is undertaken primarily through the following channels;

•	The Growthpoint website, the IAR and AFS
•	Presentations and roadshows to clients and investment analysts on interim and annual results
•	Regular dialogue with institutional investors, analysts and the media. Particular care is taken to release price sensitive information to all shareholders at the same time, as per JSE Listings Requirements
•	AGMs and other general meetings, which allow shareholders to engage with the Board directly. All resolutions at the AGM are put to the vote, and the results are published on the JSE’s news service, SENS. A copy of the minutes of shareholders’ meetings is also lodged with the JSE.

No requests for information in terms of the Promotion of Access to Information Act, 2000 were received by Growthpoint during FY15. A detailed description of our stakeholder communication is available in the Organisational Overview section of this report.