AUE2602
ASSIGNMENT 2
SECOND SEMSTER 2022
BY: MTHOMBENI : 0767297208
, PLAIGERISM WARNING: IMPORTANT TO CHANGE SOME OF THE SENTENCES HERE TO AVOID GETTING A ZERO!!
READ THE QUESTION AND THE REQUIREMENT THEN ANSWER BY PICKING AND PARAPHRASING SOME SENTENCES HERE
QUESTION 1
1a) the composition of GH (Pty) Ltd’s Board of Directors;
In terms of the King iv code the duties of the chairperson and the CEO must be separated, in other words the chairperson and the CEO must be 2 separa
people.
However, GH (Pty) ltd is not in compliance with the above-mentioned requirement as Matt Damond occupies both the CEO and the chair position with
the board.
King iv code requires that the board be composed of the majority of them being non-executive director and that among the Non Executive majority of th
be independent non-executive directors.
However GH Pty ltd is not in compliance with this requirement as on three out of 8 directors are non-executive which is in breach.
In addition among the three non-executive directors none of them is independent which is in breach of the king iv requirement that need the independen
NED to form the majority among NEDs.
-This is so because Hezekiel Sepeng is a major shareholder a company which is a major customer of GH.
-Alind Parvej is not independent as she has not fulfilled the cooling off period after retiring from an executive position hence, he is not independent.
-Ally Lane is not independent as he will in future find himself having to vote for the resolution to execute the advice he gave.
In terms of King iv code, the board should set targets for race and gender representation in its membership.
In the case of GH by looking at the names of the board members it appears there could need for GH address imbalances in terms of race representation.
King iv requires that the company have at the chairperson, CEO and one executive director in the board.
Though they incorrectly appointed a single person as CEO and chair of the board they however do have at least 3 directors in their board.
It is not clear whether the board have a suitable diversity of academic qualifications, technical expertise, industry knowledge, experience, nationality, ag
race and gender to conduct the business of the board and make it effective and promote better decision making as required by King iv.
1b) Comment on whether GH (Pty) Ltd can appoint the Board committees according to the membership requirements, as recommended by the
King IV Report on Corporate Governance for South Africa.
King recommends that a company which intends to comply with its requirements like GH intends to then it must have the following committees
appointed to assist the board in the execution of its duties and the committees are as follows:
-Audit Committee
-Nomination Committee
-Remuneration Committee
-Social ethics Committee
-Risk Commitee
The audit committee requires that all its members be independent non-executive directors.
The creation of this committee is going to be impossible and if so created it will be in breach of the requirements of the King iv code as we have already
established that none among the members of the governing body is an independent non-executive director.
In addition to this the king iv requires the members of the audit committee should as a whole have the necessary financial literacy, skills and experience
to execute their duties effectively which is a matter that is not mentioned in the case of GH pty ltd.
ASSIGNMENT 2
SECOND SEMSTER 2022
BY: MTHOMBENI : 0767297208
, PLAIGERISM WARNING: IMPORTANT TO CHANGE SOME OF THE SENTENCES HERE TO AVOID GETTING A ZERO!!
READ THE QUESTION AND THE REQUIREMENT THEN ANSWER BY PICKING AND PARAPHRASING SOME SENTENCES HERE
QUESTION 1
1a) the composition of GH (Pty) Ltd’s Board of Directors;
In terms of the King iv code the duties of the chairperson and the CEO must be separated, in other words the chairperson and the CEO must be 2 separa
people.
However, GH (Pty) ltd is not in compliance with the above-mentioned requirement as Matt Damond occupies both the CEO and the chair position with
the board.
King iv code requires that the board be composed of the majority of them being non-executive director and that among the Non Executive majority of th
be independent non-executive directors.
However GH Pty ltd is not in compliance with this requirement as on three out of 8 directors are non-executive which is in breach.
In addition among the three non-executive directors none of them is independent which is in breach of the king iv requirement that need the independen
NED to form the majority among NEDs.
-This is so because Hezekiel Sepeng is a major shareholder a company which is a major customer of GH.
-Alind Parvej is not independent as she has not fulfilled the cooling off period after retiring from an executive position hence, he is not independent.
-Ally Lane is not independent as he will in future find himself having to vote for the resolution to execute the advice he gave.
In terms of King iv code, the board should set targets for race and gender representation in its membership.
In the case of GH by looking at the names of the board members it appears there could need for GH address imbalances in terms of race representation.
King iv requires that the company have at the chairperson, CEO and one executive director in the board.
Though they incorrectly appointed a single person as CEO and chair of the board they however do have at least 3 directors in their board.
It is not clear whether the board have a suitable diversity of academic qualifications, technical expertise, industry knowledge, experience, nationality, ag
race and gender to conduct the business of the board and make it effective and promote better decision making as required by King iv.
1b) Comment on whether GH (Pty) Ltd can appoint the Board committees according to the membership requirements, as recommended by the
King IV Report on Corporate Governance for South Africa.
King recommends that a company which intends to comply with its requirements like GH intends to then it must have the following committees
appointed to assist the board in the execution of its duties and the committees are as follows:
-Audit Committee
-Nomination Committee
-Remuneration Committee
-Social ethics Committee
-Risk Commitee
The audit committee requires that all its members be independent non-executive directors.
The creation of this committee is going to be impossible and if so created it will be in breach of the requirements of the King iv code as we have already
established that none among the members of the governing body is an independent non-executive director.
In addition to this the king iv requires the members of the audit committee should as a whole have the necessary financial literacy, skills and experience
to execute their duties effectively which is a matter that is not mentioned in the case of GH pty ltd.
