Governance overview

STATEMENT OF COMMITMENT

As the highest governing authority in the Group, the Board is accountable for ethical and effective leadership. Underpinned by a high standard of corporate governance, integrity and ethics are non-negotiable features of the Group’s pursuit of its strategy, and its business conduct.

The Group’s Values and the ethical principles set out in the Group’s Code of Conduct, guide the decisions and actions of the Board and executive leadership. A well-developed governance structure, aligned with the principles and practices of King IV, is in place to ensure lines of oversight and reporting are defined and effective. The Board is confident that the Group’s governance processes support ethical culture, good performance, effective control and legitimacy, as illustrated in this summary report.

The relationships and decision-making rights between governing bodies and business platforms are shown in the organisational framework.

THE BOARD IS CONFIDENT THAT THE GROUP’S GOVERNANCE PROCESSES SUPPORT ETHICAL CULTURE, GOOD PERFORMANCE, EFFECTIVE CONTROL, AND LEGITIMACY.

STATEMENT OF COMPLIANCE

The Board subscribes to applicable laws and regulations in the jurisdictions in which the Group operates. The Board has embraced King IV and, as recommended, has provided a narrativebased report, referencing each of the King IV principles and an explanation of the practices employed to apply the principles.

During FY2021, King IV was applied in its entirety. Murray & Roberts complied with the requirements of the Companies Act, 71 of 2008, the Companies Act Regulations and the Listings Requirements of the JSE Limited. The Company conforms to its Memorandum of Incorporation.

The Company has a capital structure where each share carries one voting right. There are no restrictions to the shareholders’ rights to introduce a resolution at the AGM, subject to the requirements set out under Section 61 of the Companies Act. On receipt of a written demand delivered to the Company and submitted by holders in aggregate of at least 10% of the voting rights, the Board must call a shareholders meeting.

There are no anti-takeover measures in place and the Company is only able to issue shares on the express permission of the shareholders by means of an ordinary resolution. No resolution to approve the general issue of shares has been proposed since the 2010 AGM.

ORGANISATIONAL FRAMEWORK

ACHIEVING OUR
GOVERNANCE OUTCOMES

The principles of King IV form the foundation of the Group’s approach to governance. This supports the Group in meeting the following governance outcomes:

ETHICAL
CULTURE
GOOD
PERFORMANCE
EFFECTIVE
CONTROL

LEGITIMACY

 

 

Value creating governance structures

The Board and executive leadership set the tone for an ethical culture, ensuring good governance and business practices.

The Board has the experience and expertise required to deliver the New Strategic Future plan supported by appropriate succession planning.

Executive leadership teams have the expertise to deliver specialised sector focus and to lead the Group in achieving its strategy.

The Group’s engagement model and structure enables positive stakeholder relationships; enhancing its credibility.

The Group’s philosophy of Engineered Excellence informs the Board and executive leadership's decisionmaking, planning and oversight.

The Group aspires to be a learning organisation and is committed to continuous improvement.

Value protecting activities

The Group’s Code of Conduct supports ethically robust and defensible decisionmaking by the Board and executive leadership.

The Group’s Purpose, Code of Conduct, Values and integrated management approach ensures the New Strategic Future plan is delivered within the appropriate risk appetite, supporting a prudent risk and return balance.

The Group’s contracting principles and oversight processes are updated to reflect changes in the Group’s risk profile and project delivery experience.

The Group’s response to local and regional dynamics, as well as national objectives, minimise operational and project risks and support the Group’s legitimacy.

The Group’s governance frameworks and reporting structures ensure visibility and compliance across the platforms.

The Board is satisfied with the Group’s application of King IV.

 

GROUP LEADERSHIP

The Board is responsible for corporate governance across the Group. It approves strategic direction, which addresses and integrates strategy, risk, performance and sustainability as interdependent elements of value creation.

The Board’s competencies and deep collective experience are aligned to the Group’s strategy and the macro- and socioeconomic realities of its markets.

The Board's current membership has been unchanged since 1 April 2020.

The Board considered the employment contract of the Group chief executive, Henry Laas, who is due to retire on 31 July 2022 when he reaches the normal retirement age of 63. After due consideration, the Board agreed to provide him with a fixed-term contract of 25 months to 31 August 2024.

He will be responsible for identifying and preparing two potential successors, with consideration of the Company’s transformation requirements, for appointment to the position of Group chief executive. Progress in this regard will be reflected in his annual performance assessments, with particular focus on the 2023 and 2024 financial years.

The composition of the Board promotes a balance of authority, preventing any one director from exercising undue influence over decision-making while bringing diverse perspectives to Board deliberation.

The Board has ten directors:

Tenure

 

Strengthening diversity and transformation

A formal diversity policy sets the targets for gender and race diversity at Board level. These targets have been met as the Board comprises 60% black directors and 30% female directors.

 

BOARD EVALUATION

An external review of the effectiveness of the Board and individual directors was conducted during the year. An internal appraisal of the chairman was also performed, led by the lead independent director and discussed by the Board.

The feedback of the Board appraisal was positive with respect to the work of the Board. The Board is well functioning and professional.

Matters raised for consideration by the Board include:

STRATEGY EXECUTION AND MANAGING ASSOCIATED RISKS
GROUP CHIEF EXECUTIVE SUCCESSION
PURPOSE AND SUSTAINABILITY
THE WORLD OF WORK AFTER COVID-19

 

OUR GOVERNANCE OUTCOMES

 

ETHICAL
CULTURE

The ethical principles set out in the Code of Conduct require individual directors to:

  • Adhere to legal standards of conduct set out in the Companies Act.
  • Exercise their fiduciary duties in the best interest of the Group.
  • Take independent advice if needed to discharge their duties according to an agreed procedure.
  • Disclose real or perceived conflicts to the Board and deal with them accordingly.
  • Deal in securities only in accordance with the relevant policy.

ACTIVITIES

Leadership and organisational ethics
  • Reviewed compliance with laws, rules, codes and standards.
  • Approved revised Code of Conduct.
  • Ensures the Group subscribes to ethical business principles supported by policies, standards and procedures.
Independence assessment and conflicts of interest
  • Initiated procedures to ensure conflicts of interest are addressed.
  • Performed an independent assessment of Board effectiveness.
  • Assessed and discussed identified conflicts of interest.

OUTCOMES

Leadership and organisational ethics
  • Instances of unethical behaviour are reported, investigated and addressed.
  • Reputation as a wellgoverned, ethical and responsible multinational organisation.
Independence assessment and conflicts of interest
  • Ensures effective and ethical decision-making and sets the tone for an ethical Group culture.

 

GOOD
PERFORMANCE

The Board is responsible for corporate governance and approving the Group’s strategic direction. All decisions, deliberations and actions are based on the Group’s Values, which ultimately support the Group’s resilience and ability to perform against strategy, and create long-term stakeholder value through strong stakeholder relationships.

ACTIVITIES

Strategy, performance and reporting
  • Approved annual Group and business platform strategies and budgets.
  • Considered material tenders.
  • Conducted a review of policies and procedures ensuring effective implementation of strategy.
  • Considered the impact of COVID-19, primarily the effect on employees and business continuity.
Board evaluation
  • Reviewed compliance with laws, rules, codes and standards.
  • External assessment of Board performance during the year.
Remuneration
  • Approved remuneration policy.
  • Approved and implemented long-term incentive scheme awards.

OUTCOMES

Strategy, performance and reporting
  • Realising Purpose, Vision and Values through strategic delivery.
  • Reliable and transparent communication with stakeholders.
  • Tightened working capital management.
Board evaluation
  • Appropriate oversight structures and processes in place ensuring effective performance of the Group within Board approved risk appetite.
  • Continued improvement in performance and effectiveness of the Board.
Remuneration
  • Fair, responsible and transparent remuneration.
  • At the 2020 AGM, 99.59% (2019: 89.8%, 2018: 99.87%) of shareholders voted in favour of the Group’s remuneration policy and 99.96% (2019: 99.92%, 2018: 99.98%) voted in favour of the implementation of the remuneration policy.

 

EFFECTIVE
CONTROL

A Board-approved charter sets out its accountability, responsibility and duty to the Group including requirements for its composition, meeting procedures, work plan and performance evaluation.

ACTIVITIES

Governance, risk management, systems of control and internal audit
  • Reviewed and evaluated strategic risks and associated opportunities.
  • Approved the integrated assurance model comprising risk management, regulatory compliance, internal and external audit, and related Group Integrated Assurance Policy.
  • Updated and approved the Group Sustainability Framework.
Succession planning
  • Board review of succession planning for senior management, including the Group chief executive.

OUTCOMES

Governance, risk management, systems of control and internal audit
  • Monitored the Group’s positioning for strategic opportunities in relation to emerging trends.
  • Asserts control over how Group risks are mitigated with mechanisms ensuring compliance and effectiveness.
  • Governance framework embedded throughout the Group including in recently acquired businesses.
Succession planning
  • Formal succession plans aligned with transformation objectives for senior management.

 


LEGITIMACY

The Board provides strategic direction and approves policies and frameworks to ensure that economic, financial, social, environmental and ethical issues are addressed. The Board has established committees to assist in discharging its duties as set out in the approved committee mandates and terms of reference.

With the Board’s strategic direction, the Group seeks to protect, enhance and invest in the wellbeing of the economy, society and the environment. The social & ethics committee ensures that the Group formulates collaborative responses to sustainability challenges. The remuneration & human resources committee ensures fair and responsible remuneration and reward practices aligned to performance and the Group’s Values.

ACTIVITIES

Stakeholder relationships
  • Communicated and engaged transparently, effectively and inclusively with all stakeholder groups.
  • All directors and designated partner of the external audit firm are available at the AGM to respond to shareholder queries.
Diversity and transformation
  • The remuneration & human resources committee performs an annual assessment of succession, including strategies for transformation across the Group.

OUTCOMES

Stakeholder relationships
  • Stakeholder engagement framework is proactively implemented by management.
  • Detailed discussion and review of client relationships.
  • Sound relationships with employees and organised labour, particularly relating to demobilisations in the Power, Industrial & Water platform.
Diversity and transformation
  • Licence to operate in chosen markets.
  • Achieved diversity targets at Board level.
  • Group diversity policy guides platforms and businesses in their responses to the diversity priorities of the countries and cultures in which they operate.