Board Committees

The Board has established several committees in which the non-executive directors play a pivotal role. All committees operate under board approved terms of reference, which may be updated from time to time to keep abreast with developments in corporate law and best practice in governance.

Executive committee

Members: Chief Executive Officer (Chairman), Chief Financial Officer, Chief Officer Human Resources, Chief Officer Corporate Affairs, Chief Officer International Business and the Managing Director Vodacom SA.

The executive committee is responsible for the operational activities of the Group, developing strategy and policy proposals for consideration by the Board and implementing the Board’s directives. It has a properly constituted mandate and terms of reference. Other responsibilities include:

• leading the executive, management and staff of Vodacom;
• developing the annual budget and business plans for approval by the Board; and
• developing, implementing and monitoring policies and procedures, internal controls, governance, risk management, ethics and authority levels.

Audit committee

Members: TA Boardman (Chairman); P Malabie.

In line with the Corporate Laws Amendment Act, the Board revised the constitution of the audit committee to comprise of independent directors only. Mr TA Boardman (Chairman) and Ms P Malabie were appointed as members on 24 February 2009. The Chief Executive Officer and Chief Financial Officer attend audit committee meetings by invitation, as well as the head of internal audit and the external auditors. The primary role of the audit committee is to ensure the integrity of the financial reporting, the audit process and that a sound risk management and internal control system is maintained. In pursuing these objectives the audit committee oversees relations with the external auditors and reviews the effectiveness of the internal audit function.

The audit committee’s responsibilities include the following:

• reviewing the company’s preliminary results, interim results and annual financial statements;
• monitoring compliance with statutory and JSE Listings Requirements
• reporting to the Board on the quality and acceptability of the Group’s accounting policies and practices, including, without limitation, critical accounting policies and practices;
• considering the appointment and/or termination of the external auditors, including their audit fee, independence and objectivity and determining the nature and extent of any non-audit services; and
• receiving and dealing appropriately with any complaints (internally and externally) relating either to the accounting practices and internal audit or to the content or auditing of the company’s financial statements or related matters.

The internal and external auditors have unlimited access to the Chairman of the audit committee. The internal audit department reports directly to the audit committee and is also responsible to the Chief Financial Officer on day-to-day administrative matters.

Four audit committee meetings are scheduled per financial year. Additional committee meetings may be convened when necessary. During the previous financial year, five committee meetings and one special meeting were convened.

Remuneration committee

Members: TA Boardman, M Lundal, TM Mokgosi-Mwantembe, RAW Schellekens.

The remuneration committee, in consultation with executive management, ensures that the Group’s directors and senior executives are fairly rewarded for their individual contributions to overall performance and in line with Vodacom’s remuneration philosophy. The remuneration committee has a mandate and terms of reference from the Board and includes the following responsibilities:

• ensuring that Vodacom’s remuneration strategies, including long and short-term incentive plans are based on performance and are appropriately market competitive;
• reviewing employee benefits from time to time as to their adequacy and appropriateness with regard to developments in the industry and market benchmarks;
• ensuring appropriate human resources practices and policies; and
• reviewing and approving of compensation, executive succession and development plans.

Four remuneration committee meetings are scheduled per financial year. Additional committee meetings may be convened when necessary. During the previous financial year, three committee meetings were convened.

Nomination committee

The Board has adopted a mandate and terms of reference for the establishment of a nomination committee. The duties of this committee include:

• identifying and evaluating suitable potential candidates for appointment to the Board. It will not have authority to appoint directors as this will remain a function of the Board and shareholders;
• identifying and evaluating of suitable candidates for the position of Chief Executive  Officer and Chief Financial Officer; and
• recommending the composition of the Board in terms of the mix of skills and size of the Board and number of committees required.

To the date of this report, the membership of this committee had not yet been appointed. It was expected that by financial year end 2010, the members to this committee would have been appointed.