Dear shareholders,
From a governance perspective, the committee fulfilled its commitment to reviewing board composition, overseeing the implementation plan arising from the board evaluation process aimed at achieving desired governance outcomes and the group's purpose, and executed Exxaro's annual interface with shareholders in creating long-term value.
Mvuleni Geoffrey Qhena
Nomination committee chairperson
The committee benefits from cross-membership with the remuneration committee. The terms of reference require the committee to comprise at least three non-executive directors, with the majority being independent.
The board ensures committee members have a suitably balanced blend of skills and experience to enable the committee to discharge its functions. The CEO may not be a member of this committee but is a standing invitee to meetings. Executive management may attend committee meetings if and when necessary.
There were no changes to committee membership in 2023.
Refer to our board of directors for members' qualifications and experience.
Gender and racial diversity
The committee met formally four times during the year and had no special meetings. The committee's attendance of 100% indicates high levels of engagement and commitment by its members.
| Members | Designation | Attendance at quarterly meetings |
| Mvuleni Geoffrey Qhena | Independent non-executive director and nomination committee chairperson | 4/4 |
| Geraldine Fraser-Moleketi | Lead independent non-executive director | 4/4 |
| Dr Phumla Mnganga | Independent non-executive director | 4/4 |
| Zwelibanzi Mntambo | Non-executive director | 4/4 |
In line with the JSE Listings Requirements, the committee is constituted as a committee of the board in terms of the Companies Act, the company's MoI and King IV. The committee is governed by its board-approved terms of reference which set out its role and responsibilities.
The main purpose of the committee includes to:
The committee's areas of responsibility include:
The committee's terms of reference were reviewed in 2023 to include a broader role as a governance committee. The amendments were approved by the board. The terms of reference remain aligned with legislation, regulations and King IV.
As there is no regulatory requirement to conduct an annual external independent performance assessment, while King IV recommends regular performance evaluations for all board committees, it is a governance practice at Exxaro to conduct such independent assessments every second year.
At the end of 2023, we conducted an internal evaluation of the committee's performance and effectiveness in accordance with King IV recommendations. The evaluation aimed to identify and record areas needing strengthening or refinement while considering internal and external dynamics and factors that may positively or negatively impact the committee's ability to enhance its performance and effectiveness in these areas. The assessment concluded that the committee functions effectively.
| Key highlights | Material themes |
| Reduced the board size, while achieving and exceeding most board diversity and inclusion targets and building on our board skill and experience |  |
| In managing and addressing the impact of rail capacity constraints, the committee considered and recommended the membership of the board logistics committee and the designation of the logistics committee as a standing board committee |  |
| Revised and updated the group governance framework to keep it abreast with governance trends, reflect new board committee structures and management committees |  |
| Reviewed, adopted and monitored the implementation of the 2022 independent board and board committee evaluation action report | |
| Reviewed the outcomes of Exxaro's annual board governance roadshow, ensuring that matters raised are reported to the board for consideration and implementation |  |
Achieving a suitable board composition and appropriate balance of power between individual directors and/or groups of directors so the board will operate effectively and in the company's interests requires deliberate policy parameters and careful consideration. In keeping with good corporate governance, the board embraces the constitutional principles of equality and inclusion for all. The nomination committee enables the board's commitment to striving towards a knowledgeable, skilled, experienced, diverse and independent governing body that fully discharges its role and responsibilities with objectivity and effectiveness.
The committee focused on exceeding the gender diversity and inclusion target set by the board in 2021. We recognise that we need to do more on having people with disabilities on our board.
In respect of our gender diversity, we exceeded the 40% black female directors target with the appointment of Nondumiso Medupe and Nosipho Molope. The committee is pleased with the progress to date and will continue to consider targets set by the board in any future appointments. No changes were made to the 2021 targets.
In addition to its own targets, the board aims to pursue the compliance targets set by the dtic regarding management and control, and positively contributing to the B-BBEE rating.
The table below reflects current targets and Exxaro's achievement, enabled by the committee:
| Target | Previous reporting period (3 January 2023) | Actual as
at 3 January 2024 |
Status as
at 3 January 2024 |
| Size: Minimum of four and maximum of 20 members | 17 | 16 | Within target range |
| Race: 60% black (as defined in the B-BBEE Act) | 82% | 81% | Achieved |
| Gender: 40% black women (as defined in the B-BBEE Act) | 41% | 50% | Achieved |
| Age: Average of 55 years | 55 years | 56 years | Ongoing |
| Tenure: Average tenure of seven years (two years mentoring a successor), excluding executive | Three years | Four years | Ongoing |
| Appropriate diversity mix based on prevailing strategic objectives | The board directs its attention to the principles of balanced governing body authority by directing strategic decision making around broader diversity at board level. The range in gender, race, age, field of knowledge, skills and experience, and tenure make for well-informed and thoughtful consideration of all board matters. | ||
Note: The table includes executive directors and newly appointed Nosipho Molope, and excludes Vuyisa Nkonyeni and Isaac Mophatlane, who both stepped down at the 2023 AGM.
The number of board members should promote accountability, independence and healthy, constructive debate in line with the company's MoI and regulatory framework. In terms of the company's MoI, one third of all non-executive directors is subject to retirement by rotation and re-election by shareholders at least once every three years, if available and eligible to stand, subject to recommendation by the nomination committee and the board.
The nomination committee is
responsible for the annual consideration of director retirement and recommendation for re-election and election
to shareholders at the AGM.
The committee conducts this by assessing an individual's
performance, meeting attendance, age and diversity targets and tenure. This arises from the need to introduce
members with new expertise and perspectives while retaining valuable knowledge, skills and experience and
maintaining continuity. The committee considers if a director is fit and proper to continue as a director,
including an assessment of independence in terms of King IV.
The committee is cognisant of the board composition and size as this is integrated within the board continuity mandate. We have been working to reduce the board size from 18 to 16 since 2021. We will continue to responsibly monitor the board's size to ensure it has the right mix of skills, knowledge and experience to execute Exxaro's strategy.
Changes to the board will be presented to shareholders at our 2024 AGM, which can be found in Our board of directors.
The committee achieved its mandate to establish and maintain a board directorship continuity programme through its recommendation to appoint Nosipho Molope as an independent non-executive director and member of the audit committee and SERC. Her appointment is effective from 3 January 2024, which will be confirmed by shareholders at the upcoming AGM on 23 May 2024.
The committee considered and agreed with Nosipho on a path and timeline for her to align her board mandates with the over- boarding guideline of the company, which effectively limits directors to four listed boards including Exxaro.
The board director appointment process is formal and transparent, in line with the nomination and appointment policy. The Exxaro website contains a summarised guideline of this process.
Nomination of directors (our business tab under governance)
To support management in addressing the impact of rail capacity constraints, the committee considered and recommended the membership for the ad hoc board logistics committee, reviewed its role and purpose and recommended that it becomes a standing committee of the board.
We continuously monitor the group
governance structures and framework to ensure clear guidance to the group on monitoring and oversight, authority
and decision making.
Policies are captured to ensure Exxaro achieves its strategy. The framework was accordingly
updated in 2023 to keep it in line with governance trends and to reflect the new logistics committee and two
additional management committees, as well as the management ESG steering committee and executive risk committee.
The nomination committee considers the topics to be addressed at the two annual board governance sessions to provide directors with focused inputs from regulatory, strategic and economic perspectives. The directors attended two board governance sessions and engaged with subject matter experts on ESG oversight, security and grey listing.
Throughout the year, our directors receive information and opinions on changes within the regulatory framework. The board has a designated reading room where topical and relevant information is shared. Directors are recommended to consider various training and development programmes to support ongoing development.
We conducted an induction session for Nondumiso Medupe upon her appointment in 2023. Similarly, an induction session was provided to newly appointed director, Nosipho Molope, early in 2024.
The board induction includes an introduction to management, access to all relevant company administration information, meeting management systems and processes, as well as constitutional documents, the delegation of authority framework and other policies. The induction programme includes an introduction to the company's strategy, group governance structure, operations and stakeholder engagement model and key advisers.
Succession planning for non-executive directors is typically iterative and part of an ongoing programme of planning and discussion by the nomination committee. Succession planning is based on the board's broader diversity and inclusion policy. The policy is formulated using a holistic approach to diversity with the aim of inclusion and supporting the group's strategic focus areas. In accordance with succession planning needs, filling independent non-executive director board vacancies is continuously addressed.
Given the changing context, the committee contributes to a governance enhancement programme aimed at aligning strategic changes in the group to board and board committee composition. The committee's terms of reference and mandate are reviewed annually.
The committee monitors the executive leadership succession planning. Succession planning is a well-entrenched process that supports the building of our senior leadership and executive pipeline. The committee recognises that improvement in this regard is required.
The committee considered recommendations flowing from the 2023 annual board governance roadshow. The purpose of the roadshow is to proactively engage with our investor community to outline Exxaro's positioning on long-term value creation, leveraging ESG for business resilience and sustainability.
Key concerns raised that require further board consideration in 2024 will be monitored by the committee.
Board key matters in focusThe implementation of outcomes flowing from the independent evaluation of the performance and effectiveness of the board, its committees and specific individuals conducted towards the end of 2022 were monitored by the committee, aimed at achieving desired governance outcomes and the group's purpose. The committee approved an internal board evaluation to survey the opinions of the individual board members on the effectiveness and the performance of the board as a whole.
Key focus areas 2023/2024
| Developing the framework on future optimal board structure and size to support Exxaro's strategy |
| Continue overseeing director induction and ongoing director development |
| Monitoring board and executive leadership succession planning |
| Considering 2023 board internal assessment outcomes and recommending matters for continuous improvement |
| Reporting on annual board governance roadshow outcomes and overseeing matters for implementation |
The nomination committee, in carrying out its respective duties, duly regarded the principles and recommended practices of King IV. The committee is satisfied that it has considered and discharged its responsibilities in accordance with its terms of reference.
On behalf of the nomination committee
Mvuleni Geoffrey Qhena
Nomination committee chairperson
10 April 2024
Report Index
IR