How we ESG our business – Governance
1. Governance
Bidcorp is all about the food, the service and the technology; driving our continued commitment to create sustainable value for all our stakeholders. The group is committed and adheres to the highest level of corporate governance and business integrity. Achieved through the support and buy-in from each of the global management teams, providing and implementing robust structures and best practices to deliver timely, compliant and value-adding information to the centre.
The Bidcorp board serves as the focal point and custodian of governance within the group. The board's role and responsibilities are set out in the annually reviewed and adopted board charter, which is compliant with the requirements of the Companies Act, the recommendations of King IV, the JSE Listings Requirements and other applicable laws, rules and codes. This charter sets the tone and is indicative of the board's commitment to the four values that underpin good governance: responsibility, accountability, fairness and transparency.
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Board Charter on the website |
In line with the Companies Act, the Bidcorp board charter, read in conjunction with the Memorandum of Incorporation (MoI) provides that the company and its affairs be managed by the direction of the board, which has the authority to exercise all the powers and perform all the functions of the company. The directors' general powers are set out in the company's MoI.
The board delegates specific responsibilities to board committees which focus on the needs and strategies of the business while meeting the reporting requirements of a JSE listed entity.
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Our executive directors are responsible for the successful implementation of group-wide, business specific strategies through the execution of the necessary operational decisions. Non-executive directors provide an independent perspective and complement the skills and experience of our executive directors. Non-executive directors objectively assess Bidcorp's strategy, budget, performance, risk oversight, diversity, employment equity and standards of conduct.
Mandatory governance requirements, both statutory and legislative, are addressed by each Bidfood management team, directed under group guidance through the divisional audit and risk committees' approval of relevant charters, codes, policies and frameworks. In line with Bidcorp's decentralised structure, operational management develops business specific policies and procedures which effectively and efficiently delivers on the group requirements.
The board comprises an independent non-executive chairman, a lead independent non-executive director and a further six independent non-executive directors, one non-executive director and two executive directors. Due to our wide geographic spread, the nature of the business and the group's decentralised structure, the directors concluded that there be no prescribed officers of the company appointed at this time.
No individual has unfettered powers of decision making. Responsibility for running the board and executive responsibility for the business are separate and clearly defined. Mr S Koseff is the board's independent chairman and Mr BL Berson, an executive director, is chief executive.
The performance of the board and board committees was independently appraised by an external party. The appraisal process included indepth interviews with each director, providing anonymised feedback to our chairman and board for consideration. Bidcorp is pleased to report positive and supportive feedback received and has embraced those suggestions where improvements can be made. It is the view of the appraisal feedback to the chairman that the board and board committees are functioning effectively and efficiently.
As our business develops and grows, so too does our board. Mr DDB Band, Bidcorp's lead independent director, who was re-elected at the 2018 AGM, will be retiring at the 2019 AGM. The insight and leadership provided by Mr Band over his tenure is invaluable. Bidcorp thanks Mr Band for his significant contribution to the group. A new lead independent director will be appointed on Mr Band's retirement.
To strengthen and grow the board's diversity, it has been decided to appoint two additional independent non-executive directors. Bidcorp welcomes the new skill and diversity to the board. The board has a rigorous and transparent procedure for considering new director appointments when necessary to ensure that the board composition is aligned with the diversity policy and with group strategy.
Ms AK Biggs is the group company secretary, appointed by the board in accordance with the Companies Act. The secretariat provides a central source of guidance and advice on business ethics and good governance while fostering the highest standard of compliance with statutory and regulatory requirements.
2. Assurance
The Bidcorp board ensures the necessary levels of assurance services and functions are in place through the delegation of this function to the group audit and risk committee. This committee, supported by the divisional audit and risk committee structure enables an effective control environment which is equipped to assure the integrity of information reported back to the board, enabling effective decision making.
The board has ensured that the company has an effective, independent audit and risk committee and an effective risk-based internal audit function. Based on the audit and risk committee report and the internal auditors' written assessment, the board is satisfied with the effectiveness of the internal control system.
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Bidcorp has a group-wide robust, independent, risk-based internal audit function whose authority and responsibilities are defined in a board-approved charter that is consistent with the Institute of Internal Auditors' internal audit scope and King IV principles. The internal audit function objectively evaluates business processes and internal controls, to support management's efforts to foster a strong control environment focused on operational excellence.
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Internal Audit Charter on the website |
The group and divisional internal audit managers' report to the independent chairman of the audit and risk committee and have unrestricted access to members of the audit and risk committee and executives of the organisation. Regular meetings take place between the internal audit managers and the chairman of the audit and risk committee. The Internal Audit (IA) function is well-constituted with professional audit staff, possessing sufficient knowledge, skillset and experience to execute their responsibilities.
A risk-based IA plan is annually approved by the divisional and group audit and risk committees and each quarter reviewed by the committee for progress and potential adjustments to meet the evolving risk environment of each business.
In accordance with the group's combined assurance model, the IA team liaises with all other assurance providers, including but not limited to the external auditors, the insurance risk analysis team, health and safety teams, food safety experts etc. Using the latest in artificial intelligence technologies, smart and intuitive tools and continuous audit methodologies, IA is able to maximise efficiencies in the key risks assurance coverage to advise on the effectiveness of the control environment and associated risks.
3. Compliance
Bidcorp recognises that geographical diversity and decentralisation creates potential vulnerability to the risk of statutory and regulatory non-compliance. As the impacts differ in the various jurisdictions, each entity is required to identify the requirements which apply to its specific operating environment and the information that must be held in terms of this legislation.
The board annually confirms that Bidcorp complies with the JSE Listings Requirements and places strong emphasis on the highest standards of financial management, accounting and reporting. On economic, environmental and social issues, the company follows Global Reporting Initiatives sustainability reporting guidelines. The board has a social and ethics committee and ensures quarterly compliance reporting with social and ethics standards – group-wide, industry-wide and across our geographies.
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Bidcorp performs an annual review to monitor continued alignment with King IV principles and best practice recommendations. This analysis identified the steps taken to ensure the application of governance principles and those principles requiring ongoing attention and action. Bidcorp's King IV journey and application register can be found on the company's website.
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King IV report on the website |
Ensuring an ethical environment
The Bidcorp directors hold one another accountable for decision making based on integrity, competence, responsibility, fairness and transparency through their commitment to lead the company based on the King IV principles.
Bidcorp's commitment to building and sustaining an ethical organisational culture is entrenched.
The board reviews the code of ethics annually and ensures its continued alignment with Bidcorp values. The code requires the highest standards of integrity, ethics and behaviour, non-discriminatory employment and promotion practices, support for employees through training and development and proactive engagement on environmental, social and sustainability matters.
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Code of Ethics on the website |
The board ensures no director, manager, employee or nominees or members of their immediate family deals directly or indirectly in the securities of the company on the basis of unpublished, price-sensitive information nor during any embargo determined by the board. Dealings in the company's securities by directors and officers are listed and circulated at every board meeting for noting.
In support of this code and Bidcorp's values, the board supports the confidential reporting of fraud, theft, corruption, breach of ethics and improper behaviour. Bidcorp has engaged with Deloitte's tip-off facility to ensure that in all geographies where Bidcorp has a presence, a local telephone number, answered in the local language is available to all stakeholders, as well as access to the email and online service to report any perceived unethical behaviour. This outsourced and independent "whistleblowing" system enables stakeholders to anonymously report suspect behaviour, including non-compliance with company policies. All reported incidents are investigated by management and, where appropriate, action is taken.
In line with legislation, our pledge not to victimise whistleblowers ensures transparency and promotes ethical conduct.
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Bidcorp tip-offs on the website |
The board ensures that the King IV recommendations are integrated into the risk management function. These recommendations and group requirements form part of an ongoing enterprise-wide risk assessment process in support of the group's philosophy.
The board has delegated the responsibility for risk management to the audit and risk committee.
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Management is accountable to the board for implementing and monitoring the processes of risk management while integrating it into day-to-day activities. This enables management to focus on critical issues at a business and industry level. The individual business risks are consolidated to consider the joint impact on the group and reviewed against the group-wide defined risk appetite and tolerance.
Ensuring an ethical environment
The board acknowledges technology as a mechanism to access, protect and manage information. An IT governance framework has been approved by the board, intended to serve as a group-wide baseline.
Fit-for-purpose in-house operational IT skills, with the necessary strategic IT oversight, are in place. The IT functions are generally run lean, however, significant investment continues to be made in the IT innovation and ecommerce space. Major IT projects are well governed, with input from the necessary stakeholders, implemented timeously.
Inhouse IT skills are complemented by outsourced vendors with specialist networking, telecommunications, and cyber security skillsets. Entity specific business resilience controls are in place and tested within each operation.
Significant attention has been given to the identification and management of cyber-security risks across the group. Implementation and enhancement of this key control environment is monitored and managed by each business, in line with the group framework. The governance of data and management of data privacy, ensuring the necessary supporting IT architecture is appropriate and effective, ensures compliance with the applicable legislation.
4. Risk management
The board ensures that the King IV recommendations are integrated into the risk management function. These recommendations and group requirements form part of an ongoing enterprise-wide risk assessment process in support of the group’s philosophy.
The board has delegated the responsibility for risk management to the audit and risk committee.
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Management is accountable to the board for implementing and monitoring the processes of risk management while integrating it into day-to-day activities. This enables management to focus on critical issues at a business and industry level. The individual business risks are consolidated to consider the joint impact on the group and reviewed against the group-wide defined risk appetite and tolerance.
IT governance
The board acknowledges technology as a mechanism to access, protect and manage information. An IT governance framework has been approved by the board, intended to serve as a group-wide baseline.
Fit-for-purpose in-house operational IT skills, with the necessary strategic IT oversight, are in place. The IT functions are generally run lean, however, signifi cant investment continues to be made in the IT innovation and ecommerce space. Major IT projects are well governed, with input from the necessary stakeholders, implemented timeously.
Inhouse IT skills are complemented by outsourced vendors with specialist networking, telecommunications, and cyber security skillsets. Entity specific business resilience controls are in place and tested within each operation.
Significant attention has been given to the identification and management of cyber-security risks across the group. Implementation and enhancement of this key control environment is monitored and managed by each business, in line with the group framework. The governance of data and management of data privacy, ensuring the necessary supporting IT architecture is appropriate and effective, ensures compliance with the applicable legislation.