Governance and risk committee report

The number of meetings and attendance per committee member are shown in the Corporate governance section.

Regular invited attendees: Head of Legal, Head of Risk and the Chief Compliance Officer.

The summaries in the EOH board of directors provide the Directors’ qualifications and experience.

How we manage governance and risk

EOH STAKEHOLDERS

Note: The structure of committees has been updated in line with the King IV Report on Governance in South Africa 2016.

¹ Audit Committee responsibilities include oversight of internal audit.

COMMITTEE PURPOSE

The Governance and Risk Committee (the committee) ensures the ethical and effective delivery of the EOH Corporate Governance Framework to deliver on the framework's objectives of an ethical leadership culture, sustainability and growth, stakeholder engagement, statutory compliance and responsible citizenship. The committee's responsibilities include championing the vision and strategy of EOH, oversight of governance structures and accountability, sustainability and resilience, corporate citizenship, enterprise risk management and compliance, transparency and disclosure. Effective oversight of these areas ensures leadership and excellent business decisions that manage risk and take opportunities to create and protect value.

The committee is responsible for:

• overseeing and leading the process of embedding the EOH Governance Framework;
• the development and review of the EOH risk policies, standards and procedures and of EOH Enterprise Risk Management and Compliance;
• the effective mitigation of strategic, financial, technology and operational risks to all EOH stakeholders;
• liaison with the Audit Committee to exchange information and knowledge relating to risk and opportunity;
• providing opinions and recommendations to the Board on risk assessment, appetite and mitigation approaches; and
• overseeing the establishment of business continuity arrangements and mitigation strategies to ensure sustainable value creation.

ACTIVITIES DURING THE YEAR

The committee met quarterly during the year to review the Company's top risks and mitigating actions as well as the progress that has been made in rolling out and embedding the new EOH Risk, Compliance and Governance Framework. Significant effort has been put in to appropriately resource the CODE team to ensure it is fit for purpose going forward and is able to provide the necessary oversight of processes and systems and mitigate future risk.

Risk management

The effective review of risk mitigation programs, business continuity and forensic services are performed by the Group Risk Committee, and feedback is provided to the Governance and Risk Committee through the Chief Risk Officer. The top risks facing the organisation are provided to the committee at each meeting. Additional information as it pertains to the top risks are contained in the Risk overview.

The Bid Risk Committee (BRC) has operated effectively during the year with a total number of 389 bids being reviewed since the establishment of the BRC in January 2019.

As a result of the progression in the risk and governance maturity, the committee is satisfied that the risk management function is operating effectively.

Compliance management

The committee has oversight of the compliance program, under which a number of activities took place during the year. These focused on:

• Effective roll out of compliance training across the organisation, with a focus on the newly developed Code of Conduct;
• The establishment of a Governance Committee to review the policy framework and provide quality assurance over new or amended policies, ensure the appropriate regulatory change management implementation as well as the preparation for and the provision of commentary on new regulation;
• Establishment of a POPIA steering committee to oversee the assessment and implementation of POPIA related requirements across the Group;
• Reporting on results of fraud investigations from internal channels and the whistleblowing channels;
• Implementation of a conflicts management control room to conduct due diligence on all third parties together with the management of potential and existing conflicts of interest; and
• The implementation of an automated compliance portal for anti-bribery and corruption attestations, gifts and entertainment registrations, conflicts of interest disclosures and share dealing requests.

In addition to the committee's key focus areas discussed in the report, key activities for the 2020 financial year included:

Conclusion

The committee is confident that the CODE team will continue to mature the risk, compliance and governance framework though the organisation. Based on the work performed and the oversight of governance and risk during the year, we believe that the committee effectively fulfilled the responsibilities set out in its terms of reference.

Jesmane Boggenpoel

Chairperson, Governance and Risk Committee

1 December 2020