Corporate
Governance

MiX's shares are publicly traded on the Johannesburg Stock Exchange (JSE: MIX) and MiX's American Depositary Shares ("ADSs") are listed on the New York Stock Exchange (NYSE: MIXT). Accordingly, MiX is subject to and has implemented controls to provide reasonable assurance of our compliance with all relevant requirements in respect of both listings. These include the South African Companies Act of 2008 ("Companies Act"), the JSE Listings Requirements, the Securities and Exchange Commission ("SEC"), the New York Stock Exchange ("NYSE") and U.S. legal requirements such as the Sarbanes-Oxley Act of 2002 ("SOX").

MiX is fully committed to ensuring adherence to the strictest standards of ethical conduct, fair dealing, and integrity in our business practices. In support of this commitment, MiX endorses the principles and recommendations of the King Report on Corporate Governance, which is a booklet of guidelines for the governance structures and operation of companies in South Africa which was compiled when the Institute of Directors in South Africa asked retired Supreme Court of South Africa Judge Mervyn E. King to chair a committee, the King Committee on Corporate Governance.

Four reports have been issued: in 1994 ("King I"), 2002 ("King II"), 2009 ("King III"), and a fourth revision ("King IV") in 2016. Compliance with King IV is a mandatory requirement for companies listed on the JSE. Unlike the requirements of SOX, King IV is non-legislative and is based on principles and recommended practices. The underpinning philosophies of King IV consist of integrated thinking, seeing the organization as an integral part of society, stakeholder inclusivity, and corporate citizenship. It views good corporate governance as the exercise of ethical and effective leadership by the Board towards the achievement of the following governance outcomes: ethical culture, good performance, effective control and legitimacy.

A register of the 17 King IV principles, indicating where the appropriate disclosure is made or where relevant policy documents are located in the public forum, can be found here. MiX hereby confirms that we will continue to endorse the principles and recommendations under King IV and will continually report on our compliance at each fiscal year-end. Mechanisms and policies appropriate to our business have been established in keeping with this commitment to best practices of corporate governance and integrity, and to ensure compliance thereto.

Further to this, MiX has a Code of Ethics and Conduct (the "Code of Conduct"). The Code of Conduct, which must be read in conjunction with the Anti-Bribery and Corruption Policy and Whistleblower Policy, applies to all of our Directors, Officers and employees, including our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Accounting Officer or Group Financial Controller or persons performing similar functions. The principles of the Code of Conduct include integrity, competence, responsibility, accountability, fairness and transparency in achieving MiX’s strategy and leadership. These ethical characteristics are considered during the Board evaluations of each Director.

MiX’s Board ("Board") has adopted an Insider Trading Policy, which applies to all of our Directors, Officers and employees as well as to members of their families and others living in their households. The policy prohibits our Directors, Officers and employees from (i) engaging in transactions involving MiX’s securities at any time while in possession of material information that has not yet been publicly released, or during a restricted/closed period; and/or (ii) engaging in hedging or monetization transactions, such as zero-cost collars and forward sale contracts; short sales; and transactions in publicly traded options, such as puts, calls and other derivatives involving our equity securities.

The Board assumes overall responsibility for compliance with applicable laws and regulations and adopted non-binding rules, codes and standards and has implemented a Group Compliance Risk Management Policy to ensure that MiX complies with all applicable laws and regulations and reinforces a compliance culture.

The Board has the overall responsibility for risk oversight, including, as part of regular Board and committee meetings, general oversight of Executives’ management of risks relevant to MiX. A fundamental part of risk oversight is not only understanding the material risks a company faces and the steps management is taking to manage those risks, but also understanding what level of risk is appropriate for a company. The involvement of the Board in reviewing our business strategy is an integral aspect of the Board’s assessment of management’s tolerance for risk and its determination of what constitutes an appropriate level of risk for MiX. While the full Board has overall responsibility for risk oversight, it is supported in this function by its Audit and Risk Committee and the Nominations and Remuneration Committee. Each of the committees regularly reports to the Board.

The Audit and Risk Committee assists the Board in fulfilling its risk oversight responsibilities by periodically reviewing MiX’s accounting, reporting and financial practices, including the integrity of our financial statements, the surveillance of administrative and financial controls, our compliance with legal and regulatory requirements and our enterprise risk management program. Through its regular meetings with management, including the finance, legal, internal audit, tax, compliance, and information technology functions, the Audit and Risk Committee reviews and discusses significant areas of MiX’s business and summarizes for the Board areas of risk and the appropriate mitigating factors. The Nominations and Remuneration Committee assists the Board by overseeing and evaluating risks related to our compensation structure and compensation programs, including the formulation, administration and regulatory compliance with respect to compensation matters, and coordinating, along with the Board’s Chairperson, succession planning discussions. The Nominations and Remuneration Committee assists the Board by overseeing and evaluating programs and risks associated with Board organization, membership, structure and corporate governance. In addition, our Board receives periodic detailed operating performance reviews from management.

 

Board of Directors and Executive

The Board is MiX’s focal point and custodian of corporate governance. Board members are expected to act in MiX’s best interest, and the Company Secretary maintains a register of directors’ interests, as required by law. The Board appoints (i) the Chairperson and (ii) the President and Chief Executive Officer. The roles of the Chairperson and President and Chief Executive Officer are distinct. As the current Chairperson is not considered independent from a JSE Listings Requirements perspective as well as from a King IV perspective by virtue of his significant individual shareholding in MiX, a Lead Independent Non-Executive Director has been appointed to provide leadership and advice to the Board, without detracting from the authority of the Chairman, when any actual or perceived conflict of interest may arise. The Board believes that MiX’s current leadership structure of President and Chief Executive Officer and Chairperson being held by two separate individuals is in our best interests and in the best interests of our shareholders. It strikes the appropriate balance between the President and Chief Executive Officer’s responsibility for the strategic direction, day-to-day leadership and performance of MiX as well as the Chairperson of the Board’s responsibility to guide the overall strategic direction of MiX, provide oversight of our corporate governance and guidance to the President and Chief Executive Officer and to set the agenda for and preside over Board meetings. MiX recognizes that different leadership structures may be appropriate for companies in different situations and believe that no one structure is suitable for all companies. Accordingly, the Board will continue to periodically review MiX’s leadership structure and make such changes in the future as it deems appropriate and in our best interests and in the best interests of our shareholders.

At least one-third of the Non-Executive Directors retire by rotation each year and stand for re-election at the annual general meeting, in accordance with MiX’s Memorandum of Incorporation. Directors’ appointments during the year are ratified at the annual general meeting. An Executive Committee is in place that is responsible for devising MiX’s strategy for recommendation to the Board and to implement the strategies and policies approved by the Board. The Executive Committee is also responsible for MiX’s day-to-day business and affairs.

There is a clear balance of power and authority at Board level to ensure that no one Director has unfettered powers in decision making. All appointments to the Board are done in a formal, transparent manner and are a matter for the Board as a whole. The Board sets the parameters for the powers that are delegated to the Executive Committee and to management. The Board has developed an approvals framework, which delegates specific powers and delegations of authorities to the Executive Committee and operating management, and the approvals framework is updated at least annually, or when required. The Board is satisfied that the approvals framework contributes to role clarity and the effective exercise of authority. The Board has a succession plan in place for the members of the Board, as well as for the President and Chief Executive Officer, which is reviewed annually and is satisfied that MiX will continue to function effectively if there is ever a need to implement the plan.

Directors are appointed on the basis of skill, experience and their contribution and impact on MiX’s activities. MiX recognizes and embraces the benefits of having a diverse Board, and sees increasing diversity at Board level as an essential element in maintaining a competitive advantage. A truly diverse Board will include and make good use of differences in the skills, regional and industry experience, background, race, gender and other distinctions between Directors. These differences will be considered in determining the optimum composition of the Board and when possible, will be balanced appropriately.

The Board is satisfied that the current composition reflects the appropriate mix of knowledge, skills, experience, diversity and independence and is in accordance with the Board Diversification Policy. The Board decides on the appointment of Directors based on recommendations from the Nominations and Remuneration Committee. The Nominations and Remuneration Committee annually discusses and agrees all measurable objectives for achieving diversity on the Board and recommends them to the Board for adoption. The Nominations and Remuneration Committee will also consider director candidates recommended by shareholders, and such candidates will be considered and evaluated under the same criteria described above. At any given time, the Board may seek to improve one or more aspects of its diversity and measure progress accordingly.

In terms of MiX’s Board Evaluation Policy, the Board evaluates its own performance and that of its committees, its Chairperson and its individual members, to support continued improvement in its performance and effectiveness. A formal evaluation is conducted every second year. A description of the formal evaluations undertaken and an overview of the results and remedial actions taken, if any, are disclosed in the Nominations and Remuneration Committee Report contained in MiX’s Proxy Statement.

Our Board must comply with the independence standards required by the NYSE, the principles of King IV and the JSE Listings Requirements. In addition, committee members are subject to any additional independence requirements that may be required by applicable law, regulation, King IV, the JSE Listings Requirements or NYSE listing standards.

In making its independence recommendations, the Nominations and Remuneration Committee evaluates the various commercial, charitable and employment transactions and relationships known to the Committee that exist between MiX and our subsidiaries and the Directors and the entities with which certain of MiX’s Directors or members of their immediate families are, or have been, affiliated (including those identified through our annual Directors’ questionnaires). Furthermore, the Nominations and Remuneration Committee discusses other relevant facts and circumstances regarding the nature of these transactions and relationships to determine whether other factors, regardless of the independence standards, might compromise a Director’s independence.

The Board operates under a written charter (a link to the charter can be found on this page, under "Important Documents").

Board Committees

In the execution of its duties, the Board is assisted by various committees to which specific responsibilities have been assigned. This delegation promotes independent judgment and assists with balancing power and with the effective discharge of the Board’s duties. The committees are; an Audit and Risk Committee, a Nominations and Remuneration Committee and a Social and Ethics Committee. The committees operate in accordance with approved terms of reference (links to which can be found on this page, under "Important Documents") and report to the Board on their activities. A formal evaluation of the committees’ performance is performed on a bi-annual basis.

Audit and Risk Committee

MiX has combined the audit committee and the risk committees into one Audit and Risk Committee.

The Audit and Risk Committee assists the Board in matters relating to internal controls, financial reporting, external audit, internal audit, risk management and regulatory compliance. The Audit and Risk Committee operates under written terms of reference (a charter) that satisfies the applicable standards of the JSE, Companies Act, SEC and the NYSE (a link to the terms of reference can be found on this page, under "Important Documents").

The Audit and Risk Committee currently comprises three members and consists only of Non-Executive Directors, each of whom is expected to be financially literate and at least one member is required to have accounting or related financial management expertise under the NYSE listing standards. Since MiX’s listing on the NYSE, the Audit and Risk Committee has been comprised solely of independent Board members within the meaning of SEC and NYSE rules for purposes of the audit committee. This composition is also in accordance with the Companies Act and JSE Listings Requirements. A representative from both the outsourced internal audit function and the external auditors attend meetings. The Chairperson of the Social and Ethics Committee is also a member of the Audit and Risk Committee due to the close working relationship required between the two committees. The Chief Financial Officer and the President and Chief Executive Officer attend all meetings by invitation.

Nominations and Remuneration Committee

The nominations committee and the remuneration (compensation) committee have been combined into one Nominations and Remuneration Committee.

The Nominations and Remuneration Committee meets at least four times a year and is composed solely of three independent Non-Executive Directors within the meaning of SEC and NYSE rules of independence. The President and Chief Executive Officer are invited to attend all meetings.

The Nominations and Remuneration Committee operates under written terms of reference (a charter) (a link to the terms of reference can be found on this page, under "Important Documents").

Social and Ethics Committee

In accordance with the Companies Act, MiX established this Committee in the fiscal year 2012. The Social and Ethics Committee monitors our activities, particularly with respect to any relevant legislation, other legal requirements or prevailing codes of best practice, regarding matters relating to:

1. Social and economic development, including our standing in terms of the goals and purposes of:

  • the ten principles set out in the United Nations Global Compact Principles;
  • the Organization for Economic Cooperation and Development recommendations regarding corruption;
  • the South African Employment Equity Act; and
  • the Broad-Based Black Economic Empowerment Act;

2. Good corporate citizenship;

3. The environment, health and public safety, including the impact of our activities, products and services;

4. Consumer relationships, including our advertising, public relations and compliance with consumer protection laws;

5. Reviewing the process for monitoring compliance with laws, regulations and our Code of Conduct; and

6. Labor and employment, including our standing in terms of the International Labor Organization Protocol on decent work and working conditions, our employment relationships and our contribution toward the educational development of our employees.

The Social and Ethics Committee meets at least three times a year and currently comprises of three Non-Executive Directors and our Chief Financial Officer (an Executive Director appointed to the Committee as recommended under King IV). The President and Chief Executive Officer are invited to attend all meetings.

The Social and Ethics Committee operates under written terms of reference (a charter) (a link to the terms of reference can be found on this page, under "Important Documents").

 

 

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