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BOARD
OF DIRECTORS OF OLD MUTUAL LIFE ASSURANCE COMPANY (SA) LTD (OMLACSA)
OMLACSA has a unitary board of 18 directors, the majority of whom
are independent of management. There are eight non-executive directors,
seven independent directors and three executive directors. Seven of
the non-executive directors are directors of Old Mutual plc, including
three who are executive directors of that company.
On behalf of Old Mutual plc, this board also oversees the governance
of the Group’s business operations in South Africa, excluding
the listed companies, Nedcor and Mutual & Federal.
The roles of chairman and managing director are separate. Chairman
and non-executive director, Mike Levett, leads the board. Non-executive
director, Warren Clewlow, is deputy chairman. Executive management
is the responsibility of managing director, Roddy Sparks, and the
deputy managing directors, Peter de Beyer and Peter Moyo.
The board met eight times in 2002, including sessions devoted to providing
input and advice on strategy and business planning.
All directors have access to management, the company secretary, and
to information needed to effectively carry out their duties and responsibilities.
A formal orientation process is in place for new directors, all of
whom are subject to retirement by rotation. Non-executive directors
retire at age 70, and executive directors at age 61.
Black people occupy 33% of seats on the OMLACSA board. There is one
female board member and no disabled people on the board.
Board Committees
Five committees report to the board and, where applicable, to the
respective board committees of Old Mutual plc. They have delegated
terms of reference and are chaired by independent or non-executive
directors.
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The
Audit, Risk and Compliance Committee, chaired by Dr Len Konar,
meets with senior management and the independent and internal
auditors at least four times a year. The committee advises the
board on issues relating to the safeguarding of assets, the
operation of systems, risk management and controls, the review
of financial information and preparation of annual financial
statements. This includes satisfying the board that adequate
internal operating and financial controls are in place and that
material corporate risks have been identified and are being
effectively managed and monitored. |
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The
Remuneration Committee is chaired by Warren Clewlow and meets
at least four times a year. It determines remuneration, incentive
arrangements and the benefits of the deputy managing directors
and executive general managers. It makes recommendations on
the remuneration of non-executive directors and on the grant
of awards under the share incentive scheme. Specific emphasis
is placed on incentive payments and longer term remuneration
structures. Share incentives are considered an integral element
of remuneration structures and attention is paid to the retention
of key executives. |
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The
Corporate Governance and Nomination Committee, chaired by Professor
Andreas van Wyk, meets at least twice a year. Its function is
to review the structure, size and composition of the board and
its committees and to make related recommendations to the board.
It also assists the board in ensuring sound corporate governance
structures and practices. |
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The
Environment Committee was introduced in January 2003 to provide
input into the development of business strategy in respect of
corporate citizenship, transformation and stakeholder issues.
It is chaired by Professor Jakes Gerwel and will meet four times
a year. |
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The
Strategic Projects Management Committee, also introduced in
January 2003, is chaired by Gerhard van Niekerk. This committee
will provide input on projects with significant infrastructural
and information technology implications. It will meet on an
ad hoc basis, but probably four times a year. |
Boards of other Old Mutual (South Africa) subsidiaries
Management boards are in place for all other operating companies in
OMSA. The board committees mentioned above also oversee these operations.
The board of directors of OMLACSA endorses and seeks to consistently
apply the code of corporate practice and conduct recommended in the
King Report on corporate governance to the extent that it is relevant
and applicable to a wholly-owned subsidiary of a listed entity.
INTERNAL CONTROLS
The board has overall responsibility for the company’s system
of internal control and for reviewing its effectiveness, while executive
management is accountable to the board for monitoring the system.
The internal control system is designed to facilitate the efficient
operation of the company and its business units, and to enable appropriate
management response to significant business, operational, financial,
compliance and other risks to achieving business objectives.
Internal controls also ensure the quality of internal and external
reporting, compliance with applicable laws and regulations, and internal
policies with respect to the conduct of the business.
The key components of the company’s internal control system
are the following:
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The
Actuarial Review Committee, reconstituted as a subcommittee
of the Old Mutual plc audit committee, consists of non-executive
and executive directors of Old Mutual plc. The chief actuary
of OMLACSA and the independent auditors also attend its meetings.
It reviews the suitability of the actuarial valuation basis
and the accuracy of the published financial results. A separate
report on the South African life business actuarial bases and
results is submitted to and reviewed by the committee, and by
the OMLACSA Audit, Risk and Compliance Committee, and by the
OMLACSA board. |
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Credit
exposures are reviewed each quarter by the Credit Committee,
made up of senior management from asset management, legal and
corporate operations of the OMSA group of companies. Policies,
procedures and standards have been established to limit the
concentration of credit risk to any counterparty and to ensure
that overall credit risk is maintained at an acceptable level. |
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In terms of business planning, the board regularly reviews the
company’s strategic direction and executive directors
consider strategy for the individual lines of business with
executive management on a planned basis. Annual budgets and
three-year strategic plans are prepared and performance targets
set. Performance against plan is regularly monitored at board
level. |
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The
company has an organisational structure appropriate for planning,
executing, controlling and monitoring its business operations
to achieve strategic objectives. The management of the company
is delegated to the executive directors in accordance with the
articles of association of the company. This also governs the
conduct of executive managers who are accountable for the control,
conduct and performance of their businesses, within the agreed
business strategy. |
CODE OF ETHICS
It is a recommendation of the second King Report that companies should
demonstrate their commitment to organisational integrity by codifying
their standards in a code of ethics. The Old Mutual Group (Old Mutual
plc and its subsidiaries) has adopted a code of business and ethics
which is appended to this report.
LITIGATION
During the period under review, no major litigation against OMSA took
place.
COMPLIANCE
Old Mutual recognises its accountability and responsibilities to all
stakeholders under the legal, regulatory and supervisory requirements
applicable to its business. As a result, we are committed to doing
what is necessary to prevent breaches of these.
Compliance also makes good business sense and responsibility to facilitate
and embed a culture of compliance throughout the group lies with the
group compliance officer who implemented a Group Compliance Strategy
during 2002.
The role of the group compliance officer is to ensure compliance with
regulatory requirements, to supervise the integrity of the organisation’s
compliance system, and to guard against reputational, financial and
other risk arising from non-compliance with applicable legislation
and regulation.
The group compliance officer reports to the executive general manager
(finance) and works with 30 business unit compliance officers. The
OMLACSA Audit, Risk and Compliance Committee reviews his report.
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