Directors

Non-executive directors

Chairman

Dumisa Buhle Ntsebeza

Selby Alan Masibonge Baqwa

Alexander Gordon Kelso Hamilton

Michael John Levett

Sibongile Susan Mkhabela

Thembalihle Hixonia Nyasulu

Steven Bernard Pfeiffer

Gonzalo Rodriguez de Castro de los Rios

Sango Siviwe Ntsaluba

Executive directors

Clive Bradney Thomson – Chief Executive Officer

Donald Gert Wilson – Finance Director

Peter John Blackbeard

Martin Laubscher

Oupa Isaac Shongwe

Peter Montagu Surgey

Board attendance

Assessing the performance of board members

Board effectiveness and evaluation

Induction and training

Company secretary

Board committees

• Executive
  
• Audit
  
• Empowerment and transformation
  
• General purposes
  
• Nomination
  
• Remuneration
  
• Risk and sustainability

Executive committee

• financial, strategic, operational, governance, risk and functional issues;
  
• formulation of the group strategy and policy; and
  
• alignment of group initiatives.

Executive committee attendance

Audit committee

• Considering the independence of the external auditors and making recommendations to the board on the appointment or dismissal of the external auditors;
  
• Being responsible for recommending to the board the engagement of the external auditors and the determination of the terms, nature, objectives and scope of the audit;
  
• Evaluating the independence, effectiveness and performance of the external auditors and considering any non-audit services rendered by those auditors, including satisfying themselves as to the validity of the non-audit services and defining any limits in this regard;
• Evaluating the independence, effectiveness and performance of the lead audit partner and ensuring that partners are rotated in accordance with applicable requirements;
  
• Considering and reviewing the reliability and accuracy of financial information and appropriateness of accounting policies and disclosure practices;
  
• Examining and reviewing the interim report, final profit statement, annual financial statements, prospectus or any other documentation to be published by the company;
  
• Reviewing compliance with applicable laws, best corporate governance practices, accounting standards and regulatory requirements;
  
• Reviewing the effectiveness of the group risk assessment process, adequacy of accounting records and internal control systems; and
  
• Monitoring and supervising the functioning and performance of internal audit.

Audit committee attendance

General purposes committee

Nomination committee

Empowerment and transformation committee

Empowerment and transformation committee attendance

Remuneration report

Key remuneration highlights and developments

Remuneration philosophy

Governance structure

Remuneration committee

Non-executive directors’ emoluments

Standard fees

Fees for additional services

Executive directors’ remuneration

• Guaranteed remuneration is based on the role complexity and scope of responsibility as measured by the Watson Wyatt Global Grading System;
  
• Although the company’s guaranteed remuneration policy guideline recommends competitiveness at market median levels, the most relevant market competitive position for total reward levels is based on individual performance;
  
• Company performance, individual performance and changes in responsibilities are also taken into consideration in setting salary levels each year; and
  
• In order to avoid disproportionate packages across divisions and business units of the group and between executives, adjustments are made as deemed necessary to ensure broad internal consistency. Adjustments may also be made to the reward levels for individuals to facilitate cross business unit mobility to either grow a business unit or enter new markets.

• Base pay

The executive directors’ base salary is revised annually and is set to be competitive at the median level in the appropriate competitive labour market. Individual and company performance and changes in responsibilities are also taken into account when determining base pay annually.

• Benefits

– Retirement funding
– Medical cover
– Personal accident cover
– Vehicle allowance

• Variable pay

This consists of short-term and long-term incentives.

Short-term incentives (bonuses) are provided to increase shareholder value through increasing CFROI/CVA and to achieve group, divisional and personal development objectives. Stretch objectives are set, linked to value drivers. A combination of financial, individual scorecard or personal objectives and other business unit specific strategic performance targets make up the components of the CFROI/CVA scheme.

• Set the stretch targets to a level which represents a significant and meaningful level of stretch in the context of the current business environment; and

• Raised the threshold targets such that they represent minimum acceptable performance for the businesses.

Long-term incentive scheme

• Share option scheme

Executive directors and selected key executives participate in the Barloworld share option scheme. Allocations of share options are generally made every year, based on the market value of the company’s shares. One-third of each allocation becomes exercisable by the employee after three years have elapsed from the date of allocation. A maximum of two-thirds of the original allocation is exercisable after four years, and the full allocation after five years. All options must be exercised in full by the employee or ceded by the employee to a family company or trust, or sold to an approved financial institution within ten years of grant or six years for options granted after 29 January 2004. An employee must be in the employ of, or have retired from, the Barloworld group at the time of exercise or cession of any share options.

It is the company’s policy that neither the chairman nor any of the other non-executive directors participate in the share option scheme.

No share options were granted in the year under review to executive directors nor to any other executives and there are no plans to issue further share options at this stage.

Share options granted previously have been re-priced in accordance with shareholder approvals following the unbundling of PPC and the unbundling of coatings.

• Share appreciation rights scheme

The Barloworld cash-settled Share Appreciation Rights Scheme (SARs scheme) has been developed with the object and purpose of providing employees an opportunity to benefit from growth in the value of the ordinary shares of the company in the medium and long term.

Share appreciation rights were awarded in 2008 to executive directors and a limited number of senior executives. Performance conditions have been introduced such that vesting of the SARs is subject to the achievement of real growth in headline earnings per share.

The 2008 award will vest in three tranches, one third on each of the third, fourth and fifth anniversaries of the grant dates respectively. All SARs will lapse if not exercised within six years from date of grant.

Termination periods for executive directors

Retirement and pensions

Risk and sustainability committee

• Setting out a formal policy for the management of risks;
  
• Reviewing and assessing the integrity and effectiveness of the risk management process each year;
  
• Considering annually the consolidated risk assessment results and determining trends, common areas of concern, emerging risks, and the most significant risks for reporting to the board;
  
• Monitoring and reviewing changes in stakeholders expectations, corporate governance codes and best practice guidelines relating to risk issues;
  
• Receiving reports covering matters relating to substantive environmental and health and safety risks;
  
• Reviewing and approving the insurance renewal programme; and
  
• Reviewing and approving the sustainability report.

Risk management process

Risk and sustainability committee

Internal audit

• Appraising and advising on systems, procedures and management controls;
  
• Assessing the effectiveness of risk management processes;
• Evaluating the reliability and integrity of management and financial information;
• Assessing the control over assets and verifying their existence;
  
• Reviewing compliance with policies and procedures; and
  
• Recommending improvements in procedures and systems to enhance efficiencies and prevent fraud.

Insider trading

Ethics

• Obey the law
  
• Respect others
  
• Be fair
  
• Be honest
  
• Protect the environment

Postal address:

South Africa:

Outside South Africa:

Barloworld Ethics Line – call statistics

Relationship with shareholders

Beneficial ownership by fund type (%) 2008