Corporate Governance

PRINCIPLES OF CORPORATE GOVERNANCE

Real Estate Investments Zambia Plc (REIZ) attaches great importance to the highest ethical standards and principles of corporate governance. The Board therefore ensures that it is in compliance with the requirements of various legislation under which REIZ and its subsidiaries operate. The Group’s companies are incorporated in Zambia under the provisions of the Companies Act. REIZ is listed on the Lusaka Stock Exchange (LuSE) and is regulated by the Securities and Exchange Commission (SEC). The Group’s corporate governance systems and practices are therefore based on the LuSE’s Code of Conduct.

Quick Facts

The majority of non-executive Directors are considered independent of management and exercise their independent judgement gained from their knowledge and experience.

The roles of the Chairman and Managing Director are separate and the office of Chairman is occupied by an independent, non-executive director.

The Board has an on-going process of self –evaluation to ensure adherence to the best practices of corporate governance.

A third of the Board is required under the articles of the Company to retire annually.

The Board

The Board is collectively responsible to the Group’s shareholders for the long-term success of the business and for the overall strategic direction and control of the Group. The Board monitors and directs the management team of the Group. The Board operates under a Board Charter that provides Terms of Reference, which has been approved unanimously by all Directors. The major matters covered in the Board Charter is as follows:

Responsibilities

The Board of the Company has responsibility for the overall management of the Company and is primarily accountable to the shareholders for the proper conduct of the business of the Company. In particular, the Board has responsibility for the matters set out below.

Strategy & Management

Approve the Company’s long-term strategy and objectives.

Approve the Company’s annual operating plan, cash flow and budget and any material changes to it.

Oversee the management of the business and affairs of the Company ensuring:

Competent and prudent management
Sound planning
An adequate system of internal controls
Adequate record keeping, accountancy and other Group Company’s records and information
Compliance with statutory and regulatory obligations

Review the performance of the Company in the light of the prevailing economic conditions, its strategy, objectives, plans and budgets and ensure that any necessary corrective action is taken.

Approve any extension of the Company’s activities into new business or geographic areas.

Approve any decision to cease to operate all or any material part of the Company’s business.

Capital

Keep under review and determine appropriate levels for the capital and liquidity positions of the Company.

Review and approve proposals for the allocation of capital and other resources within the Company.

Financial Reporting

Approve the Company’s financial statements, annual report and quarterly management accounts, including other qualitative and quantitative information.

Approve any significant changes to accounting policies or practices.

Internal Control

Maintain a sound system of internal control and risk management including:

receiving reports on, and reviewing the effectiveness of the Company’s risk and control processes to support its strategy and objectives
approving an appropriate statement for inclusion in the annual report
approving any corporate governance reports
approve internal and external audit reports

Major Contracts & Engagements

Approve material acquisitions and disposals of businesses, assets or shares which are outside the ordinary course of business of the Company and significant in terms of the business of the Company.

Board & Other Appointments

Review the structure size and composition of the Management and Board from time to time and make any changes deemed necessary.

Approve the appointment and removal of designated senior executive officers of the Company.

Delegation of Authority

Approve delegated authorities for expenditure and for lending and for other risk exposures.

Other

Establish, review and agree changes as appropriate to the membership and terms of reference of the Committees of the Board.

Receive the minutes of and/or reports from the Committees of the Board.

Review the terms of reference of Board Committees from time to time.

Board Committees

The Board committees operate under Terms of Reference that have been unanimously approved by the Board. Members of the Board are represented on, and direct the affairs of, all subsidiary/associate companies of the Group. These Committees of Directors met regularly and oversee the financial and operational affairs of the Group.

The Group has four committees, namely:

Audit and Risk Committee

Remuneration Committee

Nominations Committee

Investment Committee

Directors’ declarations of interests are tabled at every Board Meeting, and all Directors are required to assess any potential conflict of interest and to bring such circumstances to the attention of the Chairman and the Board. For a matter in which a director may have an interest, such Director is requested to recuse him/herself in consideration of that matter.

Audit & Risk Committee

The committee is responsible for developing and monitoring the Group’s accounting function and risk management policies overseeing Management’s compliance with such.

Remuneration Committee

The committee is responsible for reviewing Directors’ and CEO’s remuneration. The committee is also involved in identifying, assessing and nominating for approval of the Board, candidates to fill vacancies to the Executive Team as and when they arise.

Nominations Committee

This committee is responsible for reviewing the structure, size, and composition (including the skills, knowledge, experience and compliance with corporate governance best practice of the Board. Responsible for reviewing nominations received for Board appointments and making recommendations to the Board.

Investment Committee

The committee’s responsibility is overseeing the operational affairs of the Group from investment appraisal to implementation.