Online Submission: Remuneration Committee Forum
The relationships between a board of directors, the executive management team, the shareholders and other stakeholders are at the heart of corporate governance. Nowhere is this more important than in the field of remuneration. As a body representing the board, the remuneration committee plays an essential role in overseeing the quality of the remuneration information, disclosures and decisions of a company. The remuneration committee therefore plays a significant role in building both public trust and in making sustainable business decisions.
Ernst & Young sponsored and hosted the Remuneration Committee Forum of the Institute of Directors Southern Africa (IoDSA) in May 2013. The panel was chaired by EY Advisory’s Ray Harraway and consisted of Aveng RemCo Chairman - Ric Hogben, Company Secretary at Altron - Andrew Johnston and EY Advisory’s Mokgadi Machaba-Abiodun who was the former Chairman of AVUSA RemCo and a former member of the SARS RemCo. The Remuneration Framework was well received by directors, shareholders and owners who attended the forum.
The discussions were interactive with resounding consensus that concrete guidelines needs to be put in place.
The key takeaway was the level of qualification and independence required to navigate the relationship with shareholders and the executive team to ensure sustainability of the company and aligning reward to the agreed strategy.
The participants expressed appreciated the value unlocked and the real life examples and perspectives from current and past chairmen of RemCo’s and Company Secretaries.
Given that the Audit and Social & Ethics committees are already regulated using frameworks by the companies act, this innovation led by Ray Harraway was a welcome addition.