“In 2019, risks manifested that were not contained by EOH governance. We have forensically analysed our past and we have mobilised a governance framework that can enable sustainable value creation in our future. As we rebuild stakeholder trust in our brand, we need to remember to focus on the evolution of a high performing culture that innovates and takes opportunity, blending our entrepreneurial spirit with our new corporate standards.”
Jesmane Boggenpoel
Chairperson, Governance and Risk Committees Independent Non-executive Director
OUR RECOMMENDATIONS
The committee is fully supportive
of the new and best practice
EOH Governance Framework
and has identified the following
recommendations for embedding
the solution to ensure a futureproof
organisation:
Be realistic about scope: Detailed design and planning are
essential to ensure the process
of embedding and mainstreaming
functional capabilities throughout
the organisation.
Place relationships high on the
agenda: The restoration of our
brand and credibility is about
trust and transparency. Invest
heavily in real relationships
with clients, partners, debtors,
suppliers, employees and wider
stakeholders.
Keep an eye on digital
innovation and the wider world: To lead and grow we need to
be relevant to our customers.
Opportunity and risk beyond
our immediate organisation are
evolving at a fast rate within the
context of the fourth industrial
revolution. Governance must
embrace a clear view of the
wider world. Where feasible
EOH will embrace and include
technology to enhance our
governance framework and
systems.
Set the tone from the top to the
bottom: Ensure every level of
management takes ownership to
embed processes relating to risk
and governance.
Move beyond compliance on
transformation and sustainable
development: Ensure that our
transformation and sustainable
development contributes to
action to redefine our brand for
value creation.
Note: The structure of committees has been updated in line with the King IV Report on Governance in South Africa 2016.
1 Audit Committee responsibilities include oversight of internal audit.
Committee purpose
The Governance and Risk Committee ('the committee') is responsible for ensuring the ethical and effective delivery of the EOH Corporate Governance Framework to ensure that its objectives of an ethical leadership culture, sustainability and growth, stakeholder engagement, statutory compliance and responsible citizenship are delivered. This includes championing the vision and strategy of EOH, oversight of governance structures and accountability, sustainability and resilience, corporate citizenship, enterprise risk management and compliance, transparency and disclosure. Combined, these responsibilities are in place to ensure leadership and excellent business decisions that manage risk and take opportunities to create and protect value.
The committee is responsible for:
overseeing and leading the process of embedding the EOH Governance Framework;
the development and review of the EOH risk policies, standards and procedures and of EOH Enterprise Risk Management and Compliance;
the effective mitigation of strategic, financial, technology and operational risks to all EOH stakeholders;
liaison with the Audit Committee to exchange information and knowledge relating to risk and opportunity;
make opinion and recommendations to the Board on risk assessment, appetite and mitigation approaches; and
oversee the establishment of business continuity arrangements and mitigation strategies to ensure sustainable value creation.
Activities during the year
The committee was suspended during the early part of 2019 while the focus of the Board of directors was redirected toward the recovery of the Company's reputation following the identification of wrongdoing and the need to take mitigating action. During this time the Board was reconstituted with a new membership to reflect the relevant skills and experience required to deliver future governance.
Despite this, considerable work was done with members to ensure that a best practice framework for governance, risk management and control has been defined and approved to ensure futureproof governance going forward.
Leading by example
The committee refers readers to the governance report which covers both the new EOH corporate governance framework and also the CODE plan for ensuring that future governance and risk management is embedded. The committee, which has been remobilised with a fresh membership, wishes to give its full support and approval to the work that has been done. It intends to lead by example, adopting and complying with new best practices.
Ensuring resources for CODE
The members are determined that the CODE plan should be properly resourced and supported at Board level to ensure that it is fully embedded enterprise-wide. It is clearly evident that the functional capabilities that are required to ensure proper oversight will require people, processes and systems in order to function ethically and effectively, and to mitigate future risk. In the experience of the committee, integrated, accurate and complete business information is essential to success, and the EOH Group is a complex landscape to oversee. The committee advises that the executive team plays close attention to the budgeting and detailed planning for the work that needs to be done over the next year, in line with the EOH philosophy of 'best people'.
A focus on value creation
The committee is clear that the ENSafrica process for justice and restitution must continue, as must the process of significantly galvanising EOH against bribery and corruption. At the same time, it is crucial that our eye focuses on value creation. Best practice governance seeks opportunity for value, as much as it seeks risk to be mitigated. Much value needs to be restored and nurtured, in line with our philosophy to lead and to grow.
A focus on maturing and embedding the GRC Framework
The focus in 2020 will be maturing and embedding the EOH Governance Framework across Group entities and functions. It is essential that the lessons EOH learned are absorbed at an institutional level. Alongside individual training, it is critical that processes, functions and resources for compliance and control are put in place. This must embed the checks and balances we require, using case studies of the past as a reminder that supports a stronger institution going forward. This will strengthen EOH for the future, ensuring effective governance control and mitigation of future risk.
Conclusion
The committee is impressed with the foundation that has been established for futureproof governance. Much good work has been done, yet the road ahead is long and challenging. It is essential that we retain a strong focus on responsible, ethical, and effective leadership. We need to motivate all our people, and our wider value chain, to lead and grow.
For more information go to
