Lafarge Zambia Plc (the "Company" or "Lafarge Zambia") is committed to the principles of openness, integrity and accountability. The directors and employees of Lafarge Zambia strive to ensure that the Company is managed in an efficient, accountable, responsible and moral manner. The board of directors endorses the Lusaka Stock Exchange.
(LuSE) Corporate Governance Code for listed and quoted companies (the "Code") and believes that, in all material respects, the Company complied with the principles of the Code throughout the year under review.
Board of Directors
The board currently comprises seven directors, including four independent non-executive directors. The board composition is balanced so that no individual or small group can dominate decision making. The depth of experience and diversity of the board ensures that robust and forthright debate occurs on all issues of material importance to the Company.
The roles of chairman and chief executive officer ("CEO") and managing director ("MD") are separate and no individual has dominant control over decision-making. The chairman is an independent, non-executive director appointed by the board.
The board is responsible to shareholders for strategy and direction, monitoring of operational performance and management, risk management processes and policies, setting of authority levels and the selection of new directors. The board is also responsible for the integrity and quality of communication with stakeholders, including employees, regulators and shareholders.
The board follows a risk management framework and is responsible for the review of risk management processes in the Company and ensures that board policies and decisions on risk are properly implemented.
The Lafarge Zambia board meets formally at least three times annually.
The board is assisted in the discharge of its responsibilities by subcommittees. These committees are accountable to the board, with the exception of the executive committee of management which reports to the managing director. Minutes of sub-committee meetings are available to board members. Senior management staff are invited to attend meetings where appropriate.
The Audit Committee is chaired by Mr. Mark O'Donnell, an independent, non-executive director. The Audit Committee assists the board in the discharge of its duties relating to financial reporting to all stakeholders compliance, risk management and the effectiveness of accounting and management information systems. For practical reasons the board has decided that the members of the Audit Committee will also discharge the functions of the Board Risk Committee, as opposed to having a separate Board Risk Committee.
Meetings are held regularly throughout the year and are attended by senior management where necessary. Issues addressed include the review of accounting policies, internal and external audit functions, IT risks, business continuity plans, financial reporting, operational risks, risk management, compliance and the adequacy of management information.
Record of Directors’ Attendance
In accordance with the Companies Act, 1994, listing rules of the Lusaka Stock Exchange, the Securities and Exchange Commission (SEC) Act, 1993, the record of directors' attendance and meetings held during are available for inspection. The meetings of the board are presided over by the chairman. Written notices of board meetings, along with the agenda and other management reports are circulated at least seven days before the meetings. The minutes of the meetings are appropriately recorded by the company secretary, circulated and approved at subsequent board meetings.
Risk Management Committee
The Committee reviews the nature, extent and categories of risks facing the Company, probability of the risks occurring and the Company's policies among others. The Committee also monitors compliance of the Company regarding Health & Safety, Environment and Ethics. By invitation, the chief executive officer, chief financial officer and company secretary attend the meetings.
Organizational Ethics and Business Integrity
The issue of good governance and ethical conduct is critical to counterparty and investor perceptions of a listed company. Lafarge Zambia strives to ensure that the Company's integrity and professional conduct is beyond reproach at all times. While it is probably impossible to achieve a perfect result, the Company attempts to limit the cost of unethical behavior to the Company's stakeholders.
The Company has adopted a code of conduct formulated by the Group and LuSE. Lafarge Zambia has a firm approach in dealing with any inappropriate or fraudulent behavior of management or staff, suppliers or customers.
Executive Committee of Management
The executive committee of management headed by the chief executive officer is empowered and responsible for implementing the strategies and policies determined by the board, managing the business and affairs of the Company, prioritising the allocation of technical and human resources, and establishing best management practices
The Company has established management reporting procedures which include the preparation of annual strategic plans, performance progress plans and budgets. Actual results are reported monthly against approved budgets and revised forecasts and compared to the prior year.
The control systems are designed to safeguard the Company's assets, maintain proper accounting records and ensure the reliability of management and financial information produced by the Company. Control systems are based on best practices and established Lafarge Group policies and procedures and are implemented by trained personnel with an appropriate segregation of duties.
The Company's ultimate holding company, LafargeHolcim, is a foreign entity which is listed on the SIX Swiss Exchange in Zurich and Euronext in Paris. The Group is required to comply with both the Swiss and French laws which require that management of listed entities certify that they have evaluated the effectiveness of internal controls within the Group corporate structure.