Corporate governance report Adhering to the principles of sound corporate governance Corporate governance, critically important to Distell’s success as a business and in protecting the interests of its share- holders, is managed and monitored by the company’s board of directors and several of its subcommittees. The directors are unreservedly committed to the principles of good governance and to this end accept full accountability to all their stakeholders in applying the necessary disciplines in maintaining the highest standards of professionalism, integrity, independence, fairness and social responsibility. Transparency in the management process gives shareholders and other interest groups the assurance that the group is managed according to ethical norms and international best practice within the boundaries of prudently determined risk parameters. The board is of the opinion that the group complies more than adequately with all the significant principles incorporated in the Code of Corporate Practices and Conduct, as set out in the second King Report (King II) and the JSE Limited Listings Requirements. Board of directors The board evaluates and reviews the strategic direction of the group, agrees on key performance indicators and identifies key risk areas and responses. Executive management is then charged with the detailed planning and implementation of these strategies in accordance with appropriate risk parameters. The board holds management accountable for its activities, which are monitored and controlled through regular reports and discussions. In this way the board is able to: • Retain full and effective control over the group, and monitor management’s implementation of planning strategies • Review the performance of executive management against business plans, budgets and industry standards • Consider significant financial matters, including investment decisions • Identify, consider, monitor and, if appropriate, approve financial and non-financial matters relevant to the business of the group • Ensure a comprehensive system of policies, procedures and controls is in place and adhered to • Ensure sound governance, including compliance with relevant laws and regulations, audit and accounting principles and the group’s internal governing documents and codes of conduct • Define levels of materiality, hold certain powers and delegate other matters with the necessary written authority and terms of reference to management or board committees • Be aware of and commit to the underlying principles of good corporate governance, monitor and maintain compliance. The board is chaired by independent, non-executive director DM Nurek and comprises 11 non-executive directors (of whom eight are independent) and three executive directors, including the managing director. The roles of the chairperson and managing director are separated with responsibilities divided between them. The chairperson has no executive functions. Non-executive directors, appointed for their knowledge and experience of a wide range of businesses and business sectors, augment the skills and experience of the executive directors and management and contribute independent viewpoints to matters under consideration. All directors have the appropriate expertise to fulfil their duties and enjoy significant influence at meetings. This ensures a balance of authority and precludes any one director from exercising unfettered powers of decision-making. Generally, directors have no fixed term of appointment but retire by rotation. At each annual general meeting of the company, a third of the directors (those longest in office since their last election) retire and, if available, are considered for reappointment.