A leading community investment company
 

Corporate Governance Policy

Royal Bafokeng Holdings (‘RBH’ or the ‘Company’) is a private company, wholly owned by the Royal Bafokeng Nation (‘RBN’). RBH is a holding company for its direct and indirect subsidiaries that are themselves used to make investments (together with RBH, the ‘RBH Group’).

Corporate governance is integral to the success and sustainability of RBH and the creation of long-term value for all its stakeholders. The Board of Directors (the ‘Board’) appreciates the need for accountability, honesty and transparency in fulfilling its fiduciary duties towards shareholders and the company. RBH is committed to the highest standards of corporate governance and complies with the provisions of the Companies Act, 71 of 2008, and with the Code of Corporate Practices and Conduct (the code) recommended by the King Report on Corporate Governance for South Africa, 2009 (‘King III’).

The Board is therefore committed to ensuring that its policies and practices support this ethos, while ensuring that its subsidiaries and investee companies are also committed to maintaining sound corporate governance practices.

The Board believes that RBH should adopt the highest corporate governance standards it can to enhance its reputation as a leading community-based investment company and to facilitate any future changes in its capital structure (e.g. private equity or debt offering).

This corporate governance policy (the ‘Policy’) describes the current governance structures of the RBH Group.

OVERVIEW OF THE RBH GROUP

RBH is the top level holding company; with focused intermediate holding companies (‘IHCs’) and a number of special purpose companies (‘SPVs’) which itself holds an individual investment or participates in an individual joint venture.

All the members of the RBH Group are private companies registered in South Africa. RBH shares are owned by the Royal Bafokeng Nation Development Trust (RBNDT), thus its shareholders are the named trustees of the RBNDT, acting in their capacity as trustees for the ultimate beneficiaries of the RBNDT. The beneficiaries of the RBNDT are the members of the RBN.

The shares in RBH were donated by the RBN (as universitas personarum) to the RBNDT. Up until this donation of shares, the shareholder of RBH was the RBN. Shareholder rights were exercised by the Supreme Council of the RBN under delegated powers. The Supreme Council in turn delegated certain powers to RBNDT. RBNDT exercised these delegated powers to elect directors and approve external auditors. With the donation of shares to the RBNDT, it will be the trustees of RBNDT, acting in concert, which will exercise the rights of shareholders, including the delegation of powers.

An Annual General Meeting (‘AGM’) of the shareholders of RBH will take place in the third quarter of each calendar year. At this AGM, the shareholders will be asked to elect the members of the Board and approve the selection of external auditors and the remuneration policy.

The companies in the RBH Group are passive investment holding companies. In order to protect the rights of the RBH shareholders, the corporate documents of the IHCs and the SPVs have been amended such that any material corporate activity by the company requires approval by the RBH Board of Directors. Each of the IHCs and SPVs has its own board of directors and AGM but none of these companies has any management. Moreover, the powers of these boards and AGMs are materially circumscribed.

In order for RBH to attract and retain employees, a short-term and long-term incentive scheme which is strongly aligned with the principles of King III, particularly in terms of performance-related incentives for the value added to the RBN asset base, was approved.

GOVERNANCE STRUCTURES

RBH governance structures and RBH representation on the boards of investee companies are continually reviewed by the Board of directors and the Executive Committee. Alignment to changing legislation remains a priority and RBH adheres to the requirements of the Companies Act, 71 of 2008; and King III.

Recent refinements to company policies and procedures include:

  • Investment Policy Statement
  • Conflict of Interest Policy
  • Code of Ethics
  • Revisions to the Board Charter and Terms of Reference of various committees