CORPORATE GOVERNANCE STATEMENT
The Legislature Services Board (LSB) was established in terms of the Legislature Services Act (Act No. 5 of 1996, The Public Finance Management Act, 1999 (Act 1 of 1999), and the recommendations of the King III, the Protocol on Corporate Governance for Public Entities. The Board of Directors is appointed in terms of section (4)1 of the Legislature Act and comprises the Speaker of the Legislature, who acts as Chairperson of the Board, the Deputy Speaker, Chairperson of Committees, Leader of the Democratic Alliance, Leader of COPE, the Secretary to the Legislature, Chairperson of the Audit and Risk Committee and the Chief Financial Officer. To ensure its efficient operation and in compliance with best practices and legislative requirements, the Board has appointed a Legislative Board Secretary (LSB Secretary) to assist the organisation in carrying out its mandate. The LSB has 4 Sub-Committees as depicted below.
THE STRUCTURE OF THE LSB
ROLE AND FUNCTIONS OF THE LSB
The LSB is ultimately responsible and accountable for the affairs and performance of the GPL and for ensuring the sustainability of the Institution into the future. The Board’s role includes, but is not limited to the following:
- Ensuring that appropriate systems and procedures are in place to enable the GPL to conduct its business in an honest, ethical and responsible manner;
- Ensuring that effective audit, risk management and compliance measures are in place;
- Reviewing, assessing and guiding management in setting group strategy and business plans;
- Reviewing and approving strategic plans, policies and operating budgets as well as monitoring financial performance and expenditure; and
- Ensuring accurate, concise, transparent and timely reporting.
The LSB executes its responsibility by delegating authority to the LSB sub-committees and management. The functions of the LSB sub-committees are described comprehensively in the Charters of these sub-committees. Powers delegated to management are prescriptive and controlled through Delegations of Authority to include only limited financial decision-making capacity without prior approval by the LSB.
LEGISLATURE SERVICES BOARD MEMBERS
BACK: B. Dlamini, S. Ntanjana, P. Skosana.
FRONT: J. Moodey, U. Moiloa, L. Maseko, N. Nkomo-Ralehoko, J. Davids
MEMBERS OF THE LSB SUB-COMMITTEES
Performance and Remuneration Committee
Lindiwe Maseko: Chairperson,
Uhuru Moiloa, Uhuru Moiloa, Lefokane Meshoe, Brian Goodall (Non-Executive Member) and Peter Skosana (Secretary to the Legislature).
Human Resource Development Committee
Uhuru Moiloa: Chairperson, Uhuru Moiloa, Siphiwe Mgcina, Joyce Pekane, Chwaro Setiloane (Non-Executive Member) and Peter Skosana.
Members Affairs Committee
Uhuru Moiloa: Chairperson, Nomanto Nkomo Ralehoko, Valentine Mbatha, Brian Hlongwa, Jacqueline Mofokeng, Mxolisi Xhayiya, Refilwe Mogale, Lefokane Meshoe, Moses Mayekiso, Glenda Steyn, Kate Lorimar, Bonginkosi Dhlamini, Rose Gudlhuza, Jaco Mulder and Peter Skosana.
Audit & Risk Committee
CHAIRPERSON: John Davis; INDEPENDENT MEMBERS: Mike Madlala and Alwyn Martin; NON-EXECUTIVE MEMBERS: Refilwe Letwaba: EXECUTIVE MEMBER: Peter Skosana
Each committee is governed by its own charter, which determines its Terms of Reference (TOR). Meetings of the LSB and its sub-committees are on an annual schedule and the LSB is required to conduct a minimum of four meetings a year. The sub-committees make recommendations to the LSB, which is the final decision-making structure on policy and strategic issues.
APPOINTMENT AND INDUCTION OF LSB MEMBERS
The Board requires individuals with the necessary competence in order to fulfil their strategic role as custodians of the Institution’s good governance. In exercising its duties, the Board is expected to act with due diligence and skill and are required to have a sound understanding of the business of the Legislature.
Directors are appointed on the basis of their proven track record in public and private sector leadership roles and a wide-range of expertise gained in different fields. In addition, appointments to the Board reflect provincial and national demographics. An orientation programme for new Directors is in place to ensure that they are adequately trained and have the required knowledge of the structure and mandate of the Institution, operations and policies to enable them to fulfil their duties and responsibilities.
FEES FOR NON-EXECUTIVE MEMBERS
Only external members (non-executive directors) receive a fee for their contribution as members of the respective LSB Sub-Committees. Fee structures are recommended to the LSB by the Chairperson of the Performance and Remuneration Committee, based on market research of trends and levels for Directors’ remuneration.
The following represents the core functions that the Chairperson fulfils:
The Chairperson manages the LSB and provides overall leadership and strategic direction; overseeing the adoption of appropriate governance principles and implementation at LSB meetings and ensuring that any potential conflicts of interest are managed properly and Ensuring that the LSB meets at least four per year.
EVALUATION OF THE LSB
The LSB carries out a self-evaluation process on an annual basis facilitated by Internal Auditors. The evaluation focuses on whether the LSB is fulfilling its mandate as contained in the Board Charter as well as examining the effectiveness of the LSB. The conclusions from the evaluation are reviewed by the LSB and, where appropriate, best practice recommendations are implemented.
THE BOARD SECRETARY
The Board Secretary is a an attorneys of the High Court of South Africa meeting the requirements of “Fit and Proper” and is appointed by the Chairperson of the Board on behalf of the Board of Directors to function within the ambits of the Public Finance Management Act (PFMA), Financial Management of the Gauteng Legislature Act of 2009 (FAMLA), the Protocol on Corporate Governance of Public Entities, the King III and best practice. This function also provides support and advice on corporate governance to the LSB and its sub-committees, the secretariat and reports to the Chairperson of the LSB, the Office Manager in the Office of the Speaker as well as the Secretary to the Legislature. The role of the Board Secretary includes provision of Corporate Governance advise to the LSB, its sub-committees and to the Secretary to the Legislature; reporting at any meeting of the sub-committees of the LSB on any failure to comply with relevant legislation; issuing and signing of all Committee Notice Meetings; ensuring that minutes of all LSB and its sub-committee meetings are properly recorded and resolutions communicated; ensuring that the organisation has systems and processes in place to address all corporate governance requirements; provision of legal advice to the Board and its sub-committees and managing and facilitating the induction of the LSB.
ACHIEVEMENTS OF THE BOARD
GOOD CORPORATE GOVERNANCE
In exercising good governance the LSB has led the administration towards effective leadership based on an ethical foundation. Compliance, as any other business activity, took place within the context of strong leadership and sound governance principles.
The Board has strived to ensure its alignment with the Public Finance Management Act (PFMA) and King III Report on principles of good governance and improved accountability. The LSB ensures that the GPL complies with all applicable laws and policies; and adherence to codes and standards. All these compliance responsibilities are very onerous, especially where the state is involved. This is exacerbated by the fact that different single provisions in laws, policies, codes and standards cannot be read in isolation, but need to be interpreted in the context of the entire scope of compliance applicable to the GPL.
MANAGEMENT OF RISK MANAGEMENT
The specialist intervention of managing risk is handled by an internal audit function that is outsourced by the GPL. In line with the King III Report on Corporate Governance and FAMLA, internal audit provides the Audit and Risk Committee and the GPL management with independent and objective assurance that the internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancement of the controls and processes.
During the year under review, the LSB monitored the corporate governance review implementation plan based on the Ten Key Risk Areas identified for effective corporate governance. The Legislature continued to conduct a risk assessment which identified high level risks to which the Institution was exposed. The outcome of this risk assessment was formally documented and approved by the Audit and Risk Committee and subsequently by the LSB. The Legislature updated the risk register based on the strategic priorities of the Institution. The risk register informed the development of the annual internal audit plan and the risk identification process within all Streams, including action plans to mitigate such risks. The risk register now features as a standard agenda item of the Audit and Risk Committee, LSB and senior management meetings.
The purpose of the FAMLA is to regulate the financial management of the Gauteng Provincial Legislature in a manner consistent with its status in terms of the Constitution; to promote accountable, transparent and sound financial management, to ensure that all revenue, expenditure, assets and liabilities of the GPL are managed efficiently, effectively and transparently; to provide for the responsibilities of persons entrusted with financial management in the Gauteng Provincial Legislature; and to provide for matters connected therewith. In essence, the FAMLA mirrors the PFMA while being more relevant to the legislative sector. The implementation of FAMLA has progressed well in terms of the quarterly reporting requirements to the executive authority.
DELEGATION OF AUTHORITY
The Secretary to the Legislature (CEO) has the LSB delegated authority for the management of the GPL and functions with the assistance of the Executive Directors. The delegated authority imposes certain restrictions and conditions appropriate for the effective exercise of such delegated powers. However, the LSB has not delegated its responsibility and accountability.