In pursuit of growth - Governance report 2018 - Naspers
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In pursuit Governance report 2018 of growth …
Naspers governance report 2018 02
Our board
1 Bob van Dijk 4 Koos Bekker 7 Basil Sgourdos
Chief executive – E, R, S Chair – E, H, N CFO – E, R, S (alt) 1 2
Bob was appointed chief executive of Naspers Koos led the founding team of the M-Net/ Basil was appointed financial director of Naspers
in April 2014. He joined the group as Allegro MultiChoice pay-television business in 1985. in July 2014. As a qualified chartered accountant
Group CEO in August 2013 and was promoted He was also a founder of the cellular telephony (SA), he worked at PricewaterhouseCoopers
to CEO global transactions ecommerce in group MTN. Koos headed the MIH group in its Inc. from 1989 to 1994. Thereafter he joined
October 2013. He has 15 years of general international and internet expansion until 1997, Naspers, initially as the finance manager of the
management experience in online growth when he became chief executive of Naspers South African operations division in MultiChoice
business across the world, spanning the online and led the group until 2014. He serves on the and then as chief financial officer of our
market-places, online classifieds and etail boards of other companies in the wider group. investment in the Thai-listed United
segments. Prior to his general management In April 2015 he succeeded Ton Vosloo as Broadcasting Corporation Plc., where he
career, Bob was a founder of an online financial non-executive chair of Naspers. He holds a remained for 10 years. Basil then spent two
derivatives marketplace. He started his career BAHons and an honorary doctorate in commerce years in Amsterdam as general manager of
in McKinsey with a focus on mergers and from Stellenbosch University, an LLB from the global pay-television business development, 3 4
acquisitions, and media. Bob has an MBAHons University of the Witwatersrand and an MBA before being appointed as group chief financial
from INSEAD and an MSc (cum laude) in degree from Columbia University, New York. officer of MIH in January 2009. He held this
econometrics from Erasmus University, position until he became group chief financial
Rotterdam. officer of the Naspers group on 1 July 2014.
5 Craig Enenstein
H, N
2 Don Eriksson 8 Debra Meyer
Craig is the CEO of Corridor Capital, LLC,
A, R, S S
an operationally intensive private equity firm
Don is a chartered accountant (SA) and an focused on the lower middle-market. Corridor Debra is professor of biochemistry and
honorary life member of the Institute of Capital, LLC is based in Los Angeles and was executive dean of the faculty of science at the
Directors of Southern Africa (IoDSA). He is founded by Craig in 2005. He holds an MBA in University of Johannesburg. She was a Fulbright
chair of Oakleaf Insurance Company Limited, finance (Wharton School of Business, University Scholar at the University of California, Davis,
Renasa Insurance Company, NMSIS Insurance of Pennsylvania), an MA in international studies where she obtained a PhD in biochemistry and 5 6
Services and of the audit and risk committees (Lauder Institute, University of Pennsylvania) and molecular biology. She has completed modules
of MultiChoice South Africa Holdings. He also a BA (University of California, Berkeley). in media strategy and academic leadership at
serves as an independent non-executive Harvard and Gibs (University of Pretoria) and
director of Naspers Limited and chairs the audit, makes regular contributions to several
risk, and social and ethics committees of the 6 Rachel Jafta newspapers and magazines. Debra serves
Naspers group. Don served on the council A, R, N, S as trustee and board member of several
of IoDSA and as a Trustee to the Discovery organisations.
Rachel holds the degrees MEcon and PhD, and
Health Medical Aid for a number of years.
is a professor of economics at Stellenbosch
He was a partner at Coopers & Lybrand (now
University. She joined Naspers as a director in
PricewaterhouseCoopers Inc.) and an executive
2003 and was appointed a director of Media24
director of the Commercial Union group
in 2007. She is a member of the South African E Executive committee
of companies.
Economic Society, director of Econex, chair of 7
A Audit committee
the Cape Town Carnival Trust and a member of
3 Nolo Letele the management committee of the Bureau for R Risk committee
Economic Research at Stellenbosch University. H Human resources and
S
She is a member of the human resources and remuneration committee
Nolo joined M-Net in 1990 and pioneered remuneration committee of Media24 and chair
MultiChoice’s expansion outside South Africa. of the nomination committee of Media24. She N Nomination committee
In 1995 he moved to Ghana, where he served as was appointed chair of the Media24 board S Social and ethics committee
West African regional general manager. In 1999 in April 2013 and on 9 June 2015 she was
he was appointed chief executive of MultiChoice appointed to Naspers’s audit and risk
SA, and later served as the MultiChoice group committees. She has been serving on the
chief executive until 2010, when he was international advisory Council of Fondação
appointed executive chair of the MultiChoice Dom Cabral Business School, Brazil since 2015.
South Africa Holdings board. Nolo has won 8
several awards, including Media Man of the Year
in 2001 (Saturday Star – Business Report); Media
Owner of the Year in 2003 (Financial Mail
Adfocus) and the Lifetime Africa Achievement
Prize for media development in Africa
(Millennium Excellence Foundation). He holds an
honours degree in electronic engineering (UK). Executive
Non-executive
Independent non-executive
Naspers governance report 2018 03
Our board
continued
9 Ben van der Ross 13 Guijin Liu 16 Steve Pacak
A, R E, R 9 10 11
Ben holds the qualification DipLaw (University Guijin graduated from Beijing University of Steve, a chartered accountant (SA), began his
of Cape Town) and is an admitted attorney. Foreign Studies in 1971 and joined the Ministry career with Naspers at M-Net in 1988 and has
He has previously served, among others, on of Foreign Affairs. He served in the General held various executive positions in the Naspers
the boards of FirstRand Limited, MMI Holdings Office of MFA, various Chinese Embassies and group. He is a director of MultiChoice South
Limited, Pick ‘n Pay Holdings Limited, Distell in the Department of African Affairs for many Africa Holdings and other companies in the
Limited and Lewis Group Limited. years. Guijin is experienced in international wider Naspers group. He was appointed an
affairs, particularly regarding relations between executive director of Naspers in 1998 and a
China and the developing world, such as Africa. non-executive director in January 2015. He
10 Fred Phaswana He has contributed to international conferences retired as Naspers’s financial director on 30 June
E, H, N of the UN, AU and other organisations 2014, but remained on the board as an alternate
Fred holds the qualifications MA (Unisa) and representing China. Recently he participated in non-executive director.
BComHons (Rand Afrikaans University, now high-level academic forums including the WEF 12 13
University of Johannesburg), and obtained a BA and the Summer Davos. Guijin currently serves
as president of the Chinese Society of Asia and 17 Cobus Stofberg
(philosophy, politics and economics) from Unisa
in 2010. He joined Naspers as a director in 2003. Africa Studies. S
He is joint chair of the Mondi Group and former Cobus is a founder member of M-Net. He
chair of The Standard Bank Group and of 14 Roberto Oliveira de Lima served as chief executive of the MIH group from
Standard Bank of South Africa Limited. 1997 to 2011 and has been instrumental in the
H
expansion of the group. Prior to M-Net, he was
Roberto graduated in public administration a partner of Coopers & Lybrand (predecessor
11 Hendrik du Toit and has a post-graduate degree in business of PricewaterhouseCoopers Inc.). He holds
N management from Fundação Getúlio Vargas in a BComLaw and LLB from Stellenbosch
Hendrik is chief executive officer of Investec Brazil. Roberto also has a specialisation in finance University, BComptHons from Unisa and
Asset Management and a director of Investec plc and strategic planning from Institut Supérieur is a qualified chartered accountant (SA).
des Affaires in France. He developed his career 14 15
and Investec Limited. He holds an MPhil in
economics and politics of development from in companies like Saint Gobain, Rhône-Poulenc
Cambridge University, as well as an MCom in and Accor Group in the information technology
economics (cum laude) from Stellenbosch and finance areas. He was chair and CEO of
University. Hendrik is currently a member of the Credicard Group, CEO of Vivo SA, the largest
Global Business and Sustainable Development mobile telecommunications company in Brazil,
Commission. chair of Publicis Brazil and president of Natura
SA. He has been serving as a board member for
Edenred in France, Pão de Açúcar (Casino) and
12 Mark Sorour(1) Natura SA in Brazil since 2011. Currently, he is a
member of the board of directors of Telefônica
Brasil SA, RNI Negócios Imobiliários SA and
Mark joined the Naspers group in 1994, heading Petrobras Distribuidora SA. E Executive committee
up business development and corporate finance 16
A Audit committee
globally. Following a tour of duty in Hong Kong
and Amsterdam, he returned to Cape Town 15 Emilie Choi R Risk committee
as group chief investment officer and had the R, H H Human resources and
responsibility for all global investment activities. remuneration committee
On 31 March 2018 Mark retired after more than Emilie runs and oversees corporate and business
development, business operations and analytics, N Nomination committee
20 years with the group. Mark remained on the
board as a non-executive director. Mark is a and ventures businesses for Coinbase. Prior to S Social and ethics committee
qualified chartered accountant (SA) holding Coinbase, she ran corporate development for
a BCom and DipAcc. LinkedIn and led all M&A deals in the company’s Note
history, including Lynda, Connectifier, Bizo, (1)
Appointed as non-executive director
Newsle, Bright, Pulse, SlideShare, Connected, on 31 March 2018.
Rapportive, IndexTank and CardMunch, as
well as leading the LinkedIn JV deal in China. 17
Prior to LinkedIn, Emilie worked in corporate
development and strategy roles at Warner Bros.
Entertainment as well as Yahoo Inc., where she
worked on such deals as Flickr and the Yahoo
investment in Alibaba. Emilie holds an MBA
from Wharton School at the University of
Pennsylvania and a BA in economics from Executive
Johns Hopkins University. She joined the
Naspers board as a director in 2017. Non-executive
Independent non-executive
Naspers governance report 2018 04
Our board
continued
BOARD COMPOSITION LENGTH AND TENURE Attendance at board meetings
The board is the Board member
Date first appointed in
Date last appointed Attendance Category
decisionmaking current position
body for all J P Bekker(2) 17 April 2015 25 August 2017 8/8 Non-executive
matters of such E M Choi 21 April 2017 21 April 2017 8/8 Independent
non-executive
importance as H J du Toit 1 April 2016 1 April 2016 8/8 Independent
to be significant non-executive
to the group C L Enenstein 16 October 2013 28 August 2015 8/8 Independent
non-executive
as a whole. Number of directors Number of directors
CHAIR 1 0–2 YEARS 1 D G Eriksson 16 October 2013 28 August 2015 8/8 Independent
non-executive
EXECUTIVE 3 2–4 YEARS 5
INDEPENDENT NON-EXECUTIVE 10 4–6 YEARS 7 R C C Jafta 23 October 2003 25 August 2017 8/8 Independent
NON-EXECUTIVE 3 6–9 YEARS + 4 non-executive
F L N Letele 22 November 2013 26 August 2016 8/8 Executive
NATIONALITIES GENDER DIVERSITY
FEMALE
MALE
G Liu 1 April 2016 1 April 2016 7/8 Independent
non-executive
Number of directors D Meyer 25 November 2009 26 August 2016 8/8 Independent
Number of directors non-executive
3
2018
14
R Oliveira de 16 October 2013 26 August 2016 8/8 Independent
2
2017 Lima non-executive
14
2
2016
14
S J Z Pacak(2) 15 January 2015 25 August 2017 8/8 Non-executive
TMF 23 October 2003 25 August 2017 7/8 Independent
Number of directors Phaswana(2) non-executive
SOUTH AFRICA 12
M R Sorour(1) 15 January 2015 28 August 2015 8/8 Non-executive
USA 2
BRAZIL 1 V Sgourdos (2)
1 July 2014 29 August 2014 8/8 Executive
CHINA 1
J D T Stofberg 16 October 2013 26 August 2016 8/8 Non-executive
THE NETHERLANDS 1
B van Dijk (2)
1 April 2014 29 August 2014 8/8 Executive
B J van der Ross 12 February 1999 25 August 2017 7/8 Independent
non-executive
Notes
(1)
Appointed as non-executive director 1 April 2018.
(2)
Members of the executive committee.
Naspers governance report 2018 05
Governance for a sustainable business
The board of directors conducts the locally and internationally, to enable Naspers has a governance committee system and process changes to enable
group’s business with integrity by management to make recommendations (formerly internal control oversight the implementation of recommended
“I am pleased to present this applying appropriate corporate to the Naspers board on matters of forum) comprising the chief financial or alternative practices to demonstrate
year’s governance report. It governance policies and practices. corporate governance. officers (CFOs) and risk and internal application of King IV™’s principles.
Our aim is to keep abreast of regulatory audit managers of Naspers, Naspers Focus areas for the 2018 financial year
has been a stand-out year developments, further enhance our How we integrate governance Ecommerce, Video Entertainment included, but were not limited to,
and we have continued governance standards, monitor and into our business and Media24, the Naspers group enhanced disclosures in the 2018
to improve our processes, ensure compliance with relevant laws Naspers recognises the value of an company secretary, the Naspers global integrated annual report and continued
and regulations and cultivate a thriving integrated approach to assurance and governance partner and group general focus on governance of information and
especially around ethical organisational ethical culture in the compliance. The adopted governance, counsel. The committee was tasked to technology, in particular, information and
conduct management.” different geographies where the group risk and compliance framework ensure the Naspers group’s governance technology security.
operates. We also aim to maintain a high continues to form the basis for how structures and framework are
Koos Bekker standard of reporting and disclosure, Naspers manages governance. employed in the in-scope entities in All board and board committee
Chair keeping in mind the best interests of the group during the financial year. charters and policies were reviewed
our stakeholders and disclosing what is The governance framework shows the Governance and progress are with a view to aligning them with the
relevant and important to the achievement of a sustainable business monitored by the audit and risk recommendations contained in
sustainability of the group. integrated with governance, assurance, committees and reported to the board. King IV™ and the requirements of the
risk management and compliance, in amended JSE Listings Requirements.
Refer to pages 10 to 17 for a detailed accordance with legislated requirements The composition of committees of the
review of the board and its committees. and this is reported through the board and committees of the boards of King IV™ advocates a qualitative
relevant structures. MultiChoice and Media24 is reviewed approach to implementing
Introduction annually and, where required, amended. recommended practices to achieve
Naspers group governance the application of the principles and
Naspers has a primary listing on the JSE Details of the enterprisewide risk to realise the intended governance
Limited (the JSE). The company is framework management framework appear on outcomes. King IV™ states that
therefore subject to the JSE Listings page 52 of the integrated annual report. recommended practices are meant
The Naspers board is the focal point
Requirements, the guidelines in the to be scaled in accordance with the
for and custodian of the group’s
King IV™ Report on Corporate Statement of the board proportionality considerations of the
corporate governance systems. The
Governance for South Africa, 2016 Naspers is required, in terms of the JSE various businesses in our group. We
board conducts the group’s business
(King IV™), as well as legislation Listings Requirements to report against take into account proportionality when
with integrity and applies appropriate
applying to publicly listed companies the application of the principles of we apply corporate governance in the
corporate governance policies and
in South Africa. Naspers also has a King IV™. In line with the overriding group. This means we apply the
practices in the group.
secondary listing of its American principle in King IV™ of apply and practices needed to demonstrate the
Depository Shares (ADSs) on the explain, the board, to the best of its group’s governance in terms of
The Naspers board, its committees,
London Stock Exchange (LSE). knowledge, believes the group has King IV™ as appropriate across the
and the boards and committees of
In addition, a subsidiary, Myriad satisfactorily applied the principles of group. The companies in our group are
subsidiaries MultiChoice and Media24
International Holdings B.V., has bonds, King IV™. For a more detailed review diverse and at different maturity stages,
are responsible for ensuring the
guaranteed by Naspers, which are see the King IV™ application report. a one-size-fits-all approach therefore
appropriate principles and practices
listed on the Irish Stock Exchange (ISE). cannot be followed when implementing
of King IV™ are applied and embedded
Our journey to align with governance practices. All good
in the governance practices of group
The audit and risk committees of the governance principles apply to all
companies. King IV™ and approach to
board monitor compliance with the types and sizes of companies, but the
JSE and applicable LSE and ISE listings apply King IV™ practices implemented by different
A disciplined reporting structure
requirements. companies to achieve the principles
ensures the Naspers board is fully Following the release of the King IV™ may be different. Practices must be
apprised of subsidiary activities, risks report in November 2016, we reviewed
The board’s executive, audit, risk, implemented as appropriate for each
and opportunities. All controlled and interpreted King IV™ for the
human resources and remuneration, company in line with the overarching
entities in the group are required to Naspers environment. King IV™
nomination, and social and ethics good governance principles.
subscribe to the principles of King IV™. awareness initiatives and a review of the
committees fulfil key roles in ensuring Business and governance structures
good corporate governance. The group Naspers board policies, charters and
have clear approval frameworks. governance practices formed the starting
uses independent external advisers to
monitor regulatory developments, point. In the 2018 financial year we made
Naspers governance report 2018 06
Governance for a sustainable business
continued
Naspers group governance framework
Ultimately we report to stakeholders in the integrated report and other releases
Board
Supported by Reporting to ensure
company accountability in these
secretary/ governance areas
governance
Performance against
strategy (financial and
Board non-financial:
six capitals)
Read more on
page 18
Business ethics
ead more on
R
page 65
Responsible corporate
Board citizenship
committees Read more on
Supported by pages 36, 43, 46, 47
company and 65
secretary/ Resp
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Dele t of
Ma Remun ration n ethi
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governance ga en ion tec nage itio al citi ible
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Financ
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opm
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ead more on
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Combined assurance
Read more on
Management page 6
and group
Stakeholder relationship
support governance
functions
Group support functions Read more on
page 20
Group and Naspers Management • Human resources •IARS**
segment governance of operating and remuneration • Finance Group governance
management committee businesses • Legal compliance* • Data privacy
ead more on
R
• Tax • Intellectual property page 58
• Investor relations
Remuneration governance
Read more on
Underlying page 68
framework Code of business Various charters Naspers good
Values Strategy
foundation ethics and conduct and policies*** governance guidelines
*Including data privacy **Internal audit and risk management support ***Refer to application of King IV™principles for further explanation
Naspers governance report 2018 07
Governance for a sustainable business
continued
Progress made and King IV™ milestones
2016 2017 2018
Aligned board committee reports and information and technology
November 2016 to June 2017 June 2017 to July 2017 September 2017 and enhanced reporting to board governance (including data April 2018
Analysis and review Approval of charters and policies to March 2018 committees to enable reporting privacy and cybersecurity) Finalise and approve
Enhancing report on King IV™ in the 2018 integrated and to the social and ethics
• Interpreted King IV™ for the • Consultation with and feedback from the MultiChoice annual report and King IV™ committee on organisational After year-end (31 March 2018), the
Naspers environment. Detailed South Africa and Media24 boards and segment chief templates and application report. ethics, stakeholder relationship businesses will be required to sign off
King IV™ gap analysis conducted financial officers and general counsels on Naspers reports to board management, corporate through an annual sign-off process on the
at a Naspers group level. governance framework were incorporated. committees Enhanced reporting to all board extent of implementation of Naspers
committees, including to the risk citizenship and
• Reviewed Naspers board and • The reviewed policies and charters were approved by sustainable development. guidelines and policies.
committee on legal compliance
board committee charters, policies the relevant board committees and ultimately the
and governance practices to align board on 23 June 2017.
to King IV™. • King IV™ taskforce established, consisting of the group
• Developed King IV™ and other company secretary, group general counsel, assistant
governance webinars on the group company secretary, global governance partner,
MyAcademy platform to promote head of internal audit and risk support and global
September 2017 April 2018
awareness. Other webinars legal compliance lead. Initial King IV™ taskforce
included training modules for workshop to formulate King IV™ implementation plan. to October 2017 Future focus
directors and on the JSE Listings • Formulated Naspers good governance guidelines Roadshows kicked off Areas include continuous enhancement of
Requirements, data privacy and our requirements and practice guidelines (‘the good • Naspers governance guidelines.
communications policy. Roadshows to in-scope subsidiaries to
governance guidelines’), setting out the key communicate Naspers requirements as • Reporting to the board, board
governance elements subsidiaries need to observe as set out in the Naspers group policies and committees and in the integrated
part of the Naspers group governance framework. the good governance guidelines. In-scope annual report.
The good governance guidelines consider subsidiaries include Avito, eMAG, iFood,
proportionality, as explained above. • Engagement with investors on
Irdeto, Media24, Movile, MultiChoice
environmental, social and governance
Africa, MultiChoice South Africa, Naspers,
(ESG) matters.
OLX, PayU and Takealot.
Nov Jun Jul Sep Oct Mar Apr
Ongoing interaction, • Engagement with business on progress in
implementing guidelines and reporting
• Regular reporting to taskforce, Naspers internal
overview control forum, board committees and
• Define what needs to be reported
to the board and board committees,
support and guidance requirements. board on progress made in the implementation align committee reporting templates
• Support to business to implement policies of the King IV™ plan. and enhance reporting.
and principles.
Approach to King IV™ rollout:
• Expectations on requirements to address gaps on current structure, processes and reporting were communicated to subsidiaries.
• Responsibilities assigned for different reporting areas to representatives in Naspers and group businesses.
• Reporting process, including reporting templates and tools, developed and distributed to Naspers subsidiaries.
• CFO and legal counsels in segments and subsidiaries responsible for leading the rollout in their segments and subsidiaries.
• Connecting King IV™ and other group initiatives, leverage on existing structures, processes and materials.
Naspers governance report 2018 08
Governance for a sustainable business
continued
Business ethics related matters via the Naspers ethics external whistleblower facility, throughout the group. In-scope refer to the social and ethics committee reporting framework – refer to the
officer, who is the central Naspers OpenLine, operated by Deloitte’s subsidiaries included Avito, Buscapé, report on page 21. social and ethics committee report on
The group’s code of business ethics contact for Naspers ethics matters, to Tipoffs Anonymous. Details of this eMAG, iFood, Irdeto, Media24, Movile, page 21. We recognise that sustainable
and conduct is available on the social and ethics committee. Ethics facility are published on the corporate MultiChoice Africa, MultiChoice South Key areas of focus going forward include development and economic, social
www.naspers.com. officers’ responsibilities include: website, www.naspers.com. All Africa, Naspers, OLX, PayU and regular engagement between the and environmental protection
stakeholders can report unethical Takealot. The training methods used by group’s ethics officers, where they can are global imperatives that present
This code applies to all directors and • Understanding and applying the code behaviour and wrongdoing anonymously subsidiaries included elearning modules share experiences, identify ethics both opportunities and risks for
employees in the group. Ensuring that of business ethics and conduct (the and confidentially. The line operates on the MyAcademy platform, challenges and share best practice. business. We build leading companies
group companies adopt appropriate code) and whistleblower policy. globally, 24/7/365 with live answering. face-to-face training, presentations and This will establish a Naspers-designated that empower people and enrich
processes and establish supporting • Upholding corporate values. storyboarding for disabled employees. ethics officers’ community and assist us communities. Corporate citizenship
policies and procedures is an ongoing • Managing internal speak-ups and This year we embarked on an Elearning modules were translated into in tailoring tools and support. is integral in the way we do business.
process. Management focuses on providing guidance. awareness campaign across the group, Portuguese, Spanish and Russian.
policies and procedures that address • Assisting with awareness campaigns with the theme ‘It’s your business’. The Further translations planned include We plan to launch an ethics An overview of our capitals and value
key ethical risks, such as conflicts of on the code and whistleblower policy. campaign led to our group companies Romanian and Bulgarian. In-scope reawareness campaign for in-scope creation is provided on pages 18 and 28
interest, accepting inappropriate gifts • Maintaining confidentiality in relation setting the tone of reporting unethical subsidiaries were determined based subsidiaries and to assess launching an of the integrated annual report.
and acceptable business conduct. to ethics-related matters. business practices. on proportionality and maturity. ethics-awareness campaign for other
• Maintaining records and reporting on subsidiaries, taking into account Going forward, management will
The social and ethics committee is ethics-related matters. It’s your business/speak out The Naspers social and ethics proportionality. enhance reporting techniques on
responsible for overseeing and committee receives reports on business how it reports to the social and ethics
reporting on business ethics in relation To facilitate disclosure of improper During the year we created awareness ethics management and monitoring – Stakeholder relationships committee on responsible corporate
to the Naspers group, taking into conduct, Naspers has an independent on the code and whistleblower policy citizenship and sustainable development
account specific disclosures and best Representatives of our businesses manage using the six-capitals reporting framework.
practice as recommended by King IV™. various external and internal stakeholder
Businesses in our group apply zero Openline operates globally relationships. Our businesses manage Legal compliance
tolerance to violations of the code by their stakeholder relationships based on
taking the necessary action, including a stakeholder-inclusive approach that Legal compliance falls within the
improving the control environment or balances the needs, interests and responsibilities of the group general
taking the necessary disciplinary, criminal expectations of material stakeholders counsel, who is also the chief legal
or civil action. Reports are provided to in the best interests of the businesses. compliance officer. The Naspers board
the social and ethics committee to has delegated the responsibility for
demonstrate this. Unethical behaviour To support the board to fulfil its
by senior employees is also reported to governance role, the Naspers social and
the human resources and remuneration ethics committee receives reports on
committee, along with the way the stakeholder management across the
company’s disciplinary code was applied. group – refer to the social and ethics
committee report on page 21.
Naspers is committed to conducting its
business on the basis of complying with An overview of our stakeholders and
the law, with integrity and with proper stakeholder engagement is provided on
regard for ethical business practices. It page 20 of the integrated annual report.
expects all directors and employees to
comply with these principles and, in
particular, to avoid conflicts of interest
Sustainable development
and not to engage in insider trading, and corporate citizenship
illegal anti-competitive activities, and
bribery and corruption. Naspers’s commitment to sustainable
development and corporate citizenship
During the year we designated 12 ethics is articulated in its sustainable
officers around the group. These development policy. To support the
officers serve as central points of board to fulfil its governance role, the
contact for advice on ethics-related social and ethics committee receives
queries, improprieties, allegations and reports on Naspers’s social and ethics
complaints. They report on ethics- performance, using the six-capitals
Naspers governance report 2018 09
Governance for a sustainable business
continued
overseeing legal compliance to the risk The enhanced groupwide legal Information and technology capability of businesses to respond to Penalties
committee of the Naspers board. To compliance, anti-bribery and anti- disruption is in scope for internal audit,
assist the risk committee in discharging corruption, sanctions and export governance bearing in mind the perspective of our Because MultiChoice operates in a
this responsibility, the chief legal controls and competition compliance Information and technology (I&T) customers and end users. highly regulated environment in South
compliance officer reports on legal policies were reviewed and approved by governance is integrated in the operations Africa, compliance is important. The
compliance to the risk committee. Legal the Naspers board in June 2017. of the Naspers businesses. Management A comprehensive code of business company participates in the regulatory
compliance is a standing agenda point. of each subsidiary or business unit is ethics and conduct is in place. In process affecting its industry through
Responsibility for legal compliance in Assurance on the effectiveness of responsible for ensuring effective addition, the operational boundaries to various public forums and debates,
each segment rests with the general compliance management is received processes on I&T governance are in place. dealing with I&T are subject to the providing inputs on formulating standards
counsel of that segment, who oversees through a combined assurance model. group’s legal compliance policy. Our risk and strategies for the industry.
legal compliance for the subsidiaries The risk committee assists the board management practices ensure that
within his or her segment. As part of the enhanced legal compliance with overseeing I&T-related matters. I&T relevant risks relating to the ethical and MultiChoice and M-Net received fines
framework, each segment is required to governance is a standing point on the risk responsible use of technology and from the self-regulatory body, the
During the 2017 and 2018 financial provide a quarterly legal compliance committee agenda. I&T objectives have information are identified and assessed. Broadcasting Complaints Commission
years the group has been enhancing its report to the group legal compliance been included in the risk committee Our social and ethics committee of South Africa (BCCSA). These relate
legal compliance framework by function. This report includes an charter. The risk committee considers oversees this area. We are running a to failure by channels to provide correct
identifying key legal compliance risks. overview of key compliance risk areas the risk register, as well as reports on I&T privacy programme to ensure that the classification information, resulting in
The enhancements respond to the and mitigating measures, key compliance from internal audit and risk support and personal data of our suppliers, MultiChoice and M-Net contravening
increased expectations of regulators regulatory developments and material our legal compliance function. customers and employees is stored and the BCCSA Code.
and stakeholders. In addition, they align compliance incidents and investigations. processed in an ethical manner and in
the group to market conditions, which The group legal compliance function The group’s subsidiaries are required to compliance with relevant privacy laws. Fines paid to the BCCSA:
show a deepening of policies and uses these reports to compile a act in line with Naspers’s good A key focus for the new financial year is
procedures as relevant areas of the law consolidated report that is reviewed governance guidelines, which, among the Protection of Personal Information • 2016 financial year: R10 000
and best practice become more by the chief compliance officer and is others, detail I&T governance-related (PoPI) Act, which promotes the • 2017 financial year: R90 000, and
developed. subsequently provided to the risk matters. Subsidiaries of each major entity protection of personal information by • 2018 financial year: Rnil.
committee of the Naspers board. are required to submit an annual formal public and private bodies in South
The legal compliance framework includes written report on the extent to which Africa and General Data Protection Several media industry players, including
the following: Planned areas of future focus for legal they have implemented the principles, Regulation (GDPR), a regulation in the MultiChoice and Media24, have settled
compliance include continuing to raise and chief executives and CFOs sign off European Union (EU) on data the industrywide advertising discounts
• Groupwide policies that apply to every compliance awareness across the group. thereon. Any notable exceptions are protection and privacy for all individuals matter with the Competition
legal compliance programme in the Improvements to the legal compliance summarised and reported to the risk within the EU addressing the export of Commission of South Africa, entering
group, built on the principles in the framework will be made based on committee. data outside the EU. into consent agreements with the
code of business ethics and conduct. emerging risks, feedback from Competition Commission. The
Subsidiaries are responsible for monitoring activities and a greater focus We continuously look at how we can Internal audit provides assurance to agreements were approved by the
implementing a fit-for-purpose legal on third-party screening. With internal better integrate people, technologies management, the audit committee and Competition Tribunal. DStv Media Sales
compliance programme based on the audit, we will also be focusing on our and processes. During the year, we have the board on the effectiveness of I&T Proprietary Limited (DMS), a subsidiary of
risks applicable to their business but, as assurance framework. made further progress in implementing governance. The detail of controls to MultiChoice, agreed that an administrative
a minimum, containing these group SAP across the group to unify key manage identified risks and reduce penalty of R22m be paid (provided for in
policies. There were no material or repeated finance business processes. During our vulnerability forms the basis of internal the prior financial year) and a contribution
• A compliance toolkit including detailed regulatory penalties, sanctions or fines annual business planning process, our audit’s assurance plans. of R8m, payable over three years, to a
guidelines and resources based on the for contraventions of, or non- various businesses consider their fund to be administered through an
group policies to be tailored by the compliance with, statutory obligations. platform requirements. The platform To support the board to fulfil its industry trust to assist small black-owned
segments and businesses to reflect strategy starts from the business governance role, the Naspers risk media agencies. Media24 agreed to pay
local legal requirements and risks. There were no inspections by strategy and is translated into technical committee receives reports on I&T R14m and R5m respectively.
environmental regulators or findings of and process requirements. management – refer to risk committee
The legal compliance programme is led non-compliance with environmental laws. report page 27. During the past year there were no
by the chief compliance officer and global Business continuity is included in the environmental accidents, nor were any
compliance lead with support from To support the board to fulfil its group’s risk register, which is reviewed Planned areas for future focus for I&T environment-related fines imposed by
external consultants. governance role, the Naspers risk and discussed by the risk committee governance include the development any government.
committee receives reports on legal twice a year and, annually, by the board. and deployment of data-driven
compliance – refer to the risk Business resilience is the key objective technologies (such as machine learning
committee report on page 27. of our cybersecurity policy. The and artificial intelligence), cybersecurity
and data privacy.
Naspers governance report 2018 10
Governance for a sustainable business
continued
The board BOARD DIVERSITY The chair The chief executive industry and company-specific
The chair, Koos Bekker, is a non-executive The chief executive reports to the board orientation, such as meetings with senior
Composition director. Fred Phaswana acts as lead and is responsible for the day-to-day management to facilitate an
Details of the directors at 31 March 2018 director in all matters where there may business of the group and implementing understanding of operations. Board
are set out on on pages 59 and 60 of the be an actual or perceived conflict. policies and strategies approved by the members are also exposed to the main
integrated annual report. board. Chief executives/CEOs of the markets in which the group operates and
The responsibilities of the chair include: various businesses assist him in this task. relevant evolving trends in technology
Naspers has a unitary board, which Board authority conferred on and business models. The company
provides oversight and control. The • Provide overall leadership to the management is delegated through the secretary assists the chair with the
board charter sets out the division of board without limiting the principle of chief executive, against approved induction and orientation of directors,
responsibilities. The majority of board collective responsibility for board authority levels. The board is satisfied that and arranges specific training if required.
members are non-executive directors decisions, while being aware of the delegation of authority framework
and independent of management. To individual duties of board members. contributes to role clarity and the effective The company will continue with directors’
ensure that no one individual has • In conjunction with the chief exercise of authority and responsibilities. development and training to build on
unfettered powers of decisionmaking % executive, represent the board in Bob van Dijk is the appointed chief expertise and develop an understanding
and authority, the roles of chair and chief communicating with shareholders, executive. He has no other professional of the businesses and main markets in
DIRECTORS FROM PREVIOUSLY
executive are separate. other stakeholders and, indirectly, the commitments outside the Naspers which the group operates.
DISADVANTAGED GROUPS 29
general public. group. Succession planning for the chief
FEMALE DIRECTORS 18
BOARD BALANCE • Assisted by the board, its committees executive is considered annually. Conflicts of interest
OTHER DIRECTORS 53 and the boards and committees of Potential conflicts are appropriately
subsidiary companies, ensure the The functions and responsibilities of the managed to ensure candidates and
The board diversity policy addresses integrity and effectiveness of the chief executive include: existing directors have no conflicting
the JSE Listings Requirement for all governance process. interests between their obligations to
listed companies to have a policy on • Maintain regular dialogue with the • Developing the company’s strategy for the company and their personal
how they address gender and race group’s chief executive on operational consideration and approval by the interests. All directors are required to
diversity at board level. The board is matters and consult with other board board. declare personal interests on an annual
satisfied that its composition reflects members on any matter of concern. • Developing and recommending to the basis. Declaration of directors’ interests
the appropriate mix of knowledge, skills, • In consultation with the company’s board yearly business plans and is a standing agenda point on the board’s
experience, diversity and independence. chief executive and company secretary, budgets that support the company’s agenda. Directors who believe there
No specific targets have been set in ensure appropriate content and order long-term strategy. may be a conflict of interest on a matter
terms of race or gender. of the agendas of board meetings and • Monitoring and reporting to the board advise the company secretary and are
ensure that members of the board on the performance of the company. recused from the decisionmaking
%
Naspers recognises and embraces the receive documentation promptly. • Establishing an appropriate process and the Companies Act process
benefits of having a diverse board, and • Ensure board members are properly organisational structure for the is applied accordingly. Directors must
INDEPENDENT NON-EXECUTIVE 59
sees diversity at board level as an informed on issues arising from board company, which is necessary to enable also adhere to a policy on trading in
NON-EXECUTIVE 23 essential element in maintaining a meetings and that relevant information execution of its strategic planning. securities of the company.
EXECUTIVE 18 competitive advantage. A diverse board is submitted to the board. • Recommending/Appointing the
will include, and make good use of, • Act as facilitator at board meetings executive team and ensuring proper Independent advice
At 31 March 2018 the board comprised differences in the skills, geographical and to ensure a sound flow of opinions. succession planning and performance Individual directors may, after consulting
10 independent non-executive directors, industry experience, background, race, The chair ensures adequate time is appraisals take place. with the chair or chief executive, seek
four non-executive directors and three gender and other distinctions between scheduled for discussions, and that • Ensuring the company complies with independent professional advice, at the
executive directors, as defined under the members of the board. These they lead to logical and acceptable relevant laws, corporate governance expense of the company, on any matter
JSE Listings Requirements and King IV™. differences will be considered in conclusions. principles, business ethics and connected with discharging their
Five directors (29%) are from previously determining the optimum composition • Monitor how the board works appropriate best practice and, if not, responsibilities as directors.
disadvantaged groups and three directors of the board and when possible will be together and how individual directors that the failure to do so is justifiably
(18%) are female. These figures are above balanced appropriately. All board perform and interact at meetings. The explained. Role and function of the board
the average for JSE-listed companies. appointments are made on merit; in the chair meets with directors annually to The board serves as the focal point and
context of the skills, experience, diversity, evaluate their performance. Induction and development custodian of corporate governance and
independence and knowledge the board • Preapprove all dealings in Naspers An induction programme is held for has adopted a charter setting out its
as a whole requires to be effective. shares by directors of the company new members of the board and key responsibilities as follows:
and its major subsidiaries (as defined in committees, tailored to the needs of
the JSE Listings Requirements). individual appointees. This involvesNaspers governance report 2018 11
Governance for a sustainable business
continued
• Determine the business we are whole and its committees to ––proactively engaging with shareholders and ensuring shareholders are treated Board meetings and attendance
building, what we offer users and our support continued improvement in equitably, and The board meets at least five times per
key objectives. their performance and effectiveness. ––ensuring dispute resolution mechanisms and processes are adopted and year, or more as required. The executive
• Ensuring and monitoring that a culture ––Ensure the company governs risk in implemented as part of the overall management of stakeholder relationships. committee attends to matters that
of business ethics and conduct is a way that supports the organisation • Oversee preparation and approval of the annual financial statements (for adoption cannot wait for the next scheduled
promoted to underpin the group’s in setting and achieving its strategic by shareholders), interim, provisional and integrated annual reports (as reviewed meeting. The board held eight meetings
activities as a responsible corporate objectives through structured, by the audit committee) and ensure their integrity and fair presentation. in the past financial year. Non-executive
citizen. appropriate and effective • Annually review the charters of the group’s significant subsidiary companies’ boards, directors meet at least once annually
• Provide strategic direction to the enterprisewide risk management and their self-assessment of compliance with these to establish if the Naspers board without the chief executive, financial
company and take responsibility for systems and processes, allowing the can rely on the work of the subsidiary companies’ boards. director and chair present, to discuss the
the adoption of strategy and plans board to set tolerance levels from • Review annually the charters of committees of the board. performance of these individuals.
(such strategies and plans to originate time to time.
in the first instance from ––Ensure that assurance services and Attendance at board meetings The company secretary acts as
management). The board must functions enable an effective control secretary to the board and its
approve the annual business plan environment, and that these support Board member Attendance Category committees and attends all meetings.
and budget compiled by management, the integrity of information for
for implementation by management, internal decisionmaking and of the J P Bekker (2)
8/8 Non-executive Evaluation
taking cognisance of sustainability company’s external reports. The nomination committee carries
aspects in long-term planning. ––Ensure there is effective risk-based E M Choi 8/8 Independent non-executive out the annual evaluation process which
• Ongoing oversight of the internal audit, which allows it to is not externally facilitated. The
implementation of the strategy and report on the effectiveness of the H J du Toit 8/8 Independent non-executive performance of the board and its
business plan by management against company’s system of internal controls committees, as well as the chair of the
agreed performance measures and in its integrated annual report. C L Enenstein 8/8 Independent non-executive board, against their respective mandates
targets. As part of its oversight of ––Define levels of delegation for in terms of the board charter and the
performance, the board should: specific matters, with appropriate D G Eriksson 8/8 Independent non-executive charters of its committees, is appraised.
––Retain full and effective control over authority delegated to committees The committees perform self-
the company and monitor and management. R C C Jafta 8/8 Independent non-executive evaluations against their charters for
management with regard to the ––Govern compliance with applicable consideration by the board.
implementation of the approved laws and adopted rules, codes and F L N Letele 8/8 Executive
annual budget and business plan, as standards in a way that supports the In addition, the performance of each
amended from time to time. organisation being ethical and a good G Liu 7/8 Independent non-executive director is evaluated by the other board
––Monitor the company’s social, corporate citizen. members, using an evaluation
environmental and financial • Govern technology and information in D Meyer 8/8 Independent non-executive questionnaire. The chair of the board
performance. a way that supports the organisation discusses the results with each director
––Consider and, if appropriate, declare setting and achieving its strategic R Oliveira de Lima 8/8 Independent non-executive and agrees on any training needs or
the payment of dividends to objectives. areas requiring attention by that director.
shareholders. • Ensure the organisation remunerates S J Z Pacak (2)
8/8 Non-executive Where a director’s performance is not
––Evaluate the viability of the company fairly, responsibly and transparently so considered satisfactory, the board will
and the group as a going concern, as to promote the achievement of T M F Phaswana(2) 7/8 Independent non-executive not recommend his/her re-election.
and properly record this evaluation. strategic objectives and positive
––Determine the selection and outcomes. M R Sorour(1) 8/8 Non-executive A consolidated summary of the
orientation of directors. • Adopt a stakeholder-inclusive evaluation is reported to and discussed
––Appoint the chief executive and approach in the execution of its V Sgourdos (2)
8/8 Executive by the board, including any actions
financial director, and ensure governance role that balances the required. The lead independent director
succession is planned. needs, interests and expectations of J D T Stofberg 8/8 Non-executive leads the discussion on the performance
––Establish appropriate committees material stakeholders in the best of the chair, with reference to the results
with clear terms of reference and interests of the organisation over time. B van Dijk (2)
8/8 Executive of the evaluation questionnaire, and
responsibilities. This includes: provides feedback to the chair.
––Appoint the chair of the board and ––identifying material stakeholders and B J van der Ross 7/8 Independent non-executive
its committees. monitoring management’s process The formal annual evaluation process
––Ensure the evaluation of of engaging with stakeholders Notes showed that the board and its
(1)
Appointed as non-executive director 1 April 2018.
performance and effectiveness of ––determining the company’s (2)
Members of the executive committee. committees had functioned well and
directors, the chair, the board as a communication policyNaspers governance report 2018 12
Governance for a sustainable business
continued
discharged their duties as per the The established board committees in operation during the financial year: Audit committee
mandates in their charters. The board is This committee, chaired by Don Eriksson, comprises only independent non-
satisfied that the evaluation process is Executive committee executive directors. All members are financially literate and have business and
improving its performance and This committee comprises two non-executive directors, one being the chair of the financial acumen.
effectiveness. The results of the board board, who also serves as the chair of the executive committee, one independent
evaluation indicated that board members, non-executive director plus two executive directors. The executive committee acts on The committee held four meetings during the past financial year. The chief
collectively and individually, effectively behalf of the board in managing urgent issues when the board is not in session, subject executive and financial director attend committee meetings by invitation.
discharged their governance role. There to statutory limits and the board’s limitations on delegation.
were no remedial actions identified. Attendance at audit committee meetings
Furthermore, the independence of each Attendance at executive committee meetings
director was evaluated. The board Committee member Qualifications Attendance Category
Committee member Qualifications Attendance Category
determined that although some directors
had served as members for nine years or Don Eriksson CTA and CA(SA) 4/4 Independent
Koos Bekker BAHons and DCom 4/4 Non-executive non-executive
longer, they all demonstrated they were
independent in character and judgement (honoris causa)
and there were no relationships or (Stellenbosch Rachel Jafta MEcon and PhD 4/4 Independent
circumstances that were likely to affect or University), LLB (Stellenbosch non-executive
could appear to affect their independence. (University of the University)
Witwatersrand), MBA
(Columbia University) Ben van der Ross DipLaw (UCT) 4/4 Independent
Board committees
While the whole board remains non-executive
Steve Pacak CA(SA) 4/4 Non-executive
accountable for the performance and
affairs of the company, it delegates Both internal and external auditors have unrestricted access to the committee
Fred Phaswana MA (Unisa), 4/4 Independent through the chair. The internal and external auditors also have the opportunity at
certain functions to committees and
BComHons non-executive two meetings per year to report to the committee in the absence of management,
management to assist in discharging its
(University of or when appropriate to do so.
duties. Appropriate structures for those
Johannesburg), BA
delegations are in place, accompanied
(philosophy, politics The chair of the board is not a member of the audit committee, but may attend
by monitoring and reporting systems.
and economics) meetings by invitation.
Each committee acts within agreed, Basil Sgourdos CA(SA) 4/4 Executive
written terms of reference. The chair This committee’s main responsibilities, in addition to its responsibilities in terms of
of each committee reports at each the Companies Act, are as follows:
Bob van Dijk MBAHons (INSEAD 4/4 Executive
scheduled board meeting. graduate business
• Review and approve for presentation to and approval by the board, the
school) and MSc (cum
The chairs of the audit, risk, social and company’s integrated annual report, annual financial statements, interim and
laude) in econometrics
ethics, human resources and provisional reports, and any other company press releases with material financial
(Erasmus University
remuneration, and nomination or internal control impacts.
Rotterdam)
committees are independent • Disclose in the integrated report significant matters that the audit committee has
non-executive directors and are considered in relation to the annual financial statements, and how these were
required to attend annual general addressed by the committee.
meetings to answer questions. • Review the viability of the company and the group on a going-concern basis,
making relevant recommendations.
• Receive all audit reports directly from the external auditor.
• Annually review the external auditor and disclose the audit committee’s views on the
quality of the external audit, with reference to audit quality indicators such as those
that may be included in inspection reports issued by external audit regulators.
• Evaluate the lead partner of the external auditor, who will be subject to rotation
as required by regulations.
• Present the committee’s conclusions on the external auditor to the board,
preceding the annual request to shareholders to approve the appointment of the
external auditor.You can also read
