CORPORATE GOVERNANCE Grindrod   is   committed   to   an   open   corporate   governance process,  which provides shareholders and other stakeholders with the assurance that group resources are being managed ethically  and  within  predetermined  risk  parameters,  and  in compliance with sound and transparent business practices. The  board  is  of   the  opinion  that  the  group  complies,  in  all material  respects,  with  the  principles  and  code  of   conduct incorporated   in   the   King   report   and   the   JSE   Securities Exchange South Africa (JSE) Listings Requirements. The  aspects  of   management  that  ensure  good  governance are discussed in more detail below. BOARD OF DIRECTORS Grindrod Limited The  Grindrod  board  comprises  16  directors,  seven  of  whom serve   as   executive   directors.   The   non-executive   directors comprise   individuals   who   have   considerable   commercial experience   allowing   independent   judgement   on   decisions made  by  the  board.   Details  of   the  non-executive  and  the executive directors are shown on pages 12 to 15 of  this report. The board meets at least four times a year and has a dynamic board charter covering the scope of  its responsibilities which is subject to annual review.  In terms of  the charter the board assumes  ultimate  responsibility  for  leadership  and  strategic direction of  the group, and is accountable to shareholders and stakeholders   for   performance.   To   this   end   it   maintains effective  control  of   the  group  and  considers  annually  the group   business   plan,   risk   management,   its   operating   and capital  budgets  and  performance  criteria  of   the  executive management.   The   quorum   for   board   meetings   has   been increased to eight directors. The role and function of  chairman and managing director are separate in the Grindrod group. The chairman of  the company, W M Grindrod is a non-executive director. The Grindrod executive committee, presently consisting of  the group managing director as chairman,  the executive directors and the Unicorn Shipping marine director,  are responsible for the operational management of  the group. This team operates within determined group limits of  authority. The board is supplied with complete and relevant information which enables the directors to discharge their responsibilities and have unrestricted access to all group information, records, documents   and   property.   The   information   needs   are   well defined   and   non-executive   directors   have   full   access   to management   and   the   company   secretary.   Non-executive directors may in appropriate circumstances take independent professional advice at the company’s expense. Major Subsidiaries The boards of  directors of  major local and offshore operating subsidiaries comprise executive directors/senior management and    those    abroad    include    independent    non-executive directors. Directors and Officers’ Share Dealings Directors  and  officers  are  not  permitted  to  deal,  directly  or indirectly,   in   the   shares   of   the   company   from   the   period between the end of  the interim and annual reporting periods to  the  announcement  of  the  interim  and  final  results,  or  any period during which they become aware of  any negotiations, details   of   which   may   affect   the   share   price   or   a   period declared  as  a  prohibited  period  in  terms  of  the  JSE  Listings Requirements.  The  company  secretary  communicates  on  a regular basis with the board regarding the status of  dealing in the company’s shares. Directors  are  required  to  notify  the  company  secretary  in writing  immediately  after  any  transaction  in  the  company’s shares. These notifications are advised to the JSE and tabled at the next board meeting. BOARD COMMITTEES The   board   has   an   audit   committee   and   a   remuneration/ nomination committee to assist in discharging the board’s duty of    ensuring   good   corporate   governance.   Members   and chairmen of  these committees are appointed by the board. Audit Committee The group audit committee provides an important function of reviewing internal controls, risk procedures and financial results. Its members are shown on pages 12 and 13 of  this report. They comprise  non-executive  directors  and  includes  the  chairman of  the board of  directors.  The deputy chairman,  D R D White is   chairman   of   the   committee.   The   audit   committee   has specific  terms  of  reference  and  is  accountable  to  the  board, which  receives  minutes  of  its  meetings  and  a  report  on  the proceedings. The internal auditors and external auditors have full access to the committee. The   committee   meets   at   least   three   times   a   year   with management,  the internal and external auditors to review the effectiveness of  management information systems and other systems  of  internal  control,  the  effectiveness  of  the  internal audit  function,  the  scope  of  the  external  and  internal  audits and  to  assess  the  auditors’  findings.  The  committee  reviews the  accounting  policies  of  the  group,  the  interim  and  annual financial announcements and the annual financial statements. The  committee  also  establishes  the  principles  by  which  the external auditors are used for non-audit services. It is planned to  adopt  an  internal  audit  charter  during  the  current  year aimed at defining the function,  responsibility and authority of the group internal audit activity. Remuneration/Nomination Committee The   remuneration   philosophy   of    the   group   is   to   offer compensation that will attract,  retain and motivate employees with  the  necessary  skills  and  potential  to  achieve  business goals.