According to principle 15.58a, internal audit should follow an approved risk-based internal audit plan. Explain in your own words what the term “risk-based audit plan” means in the context of the King IV requirements for internal audit.

Explain in your own words what the term “combined assurance model” means in the context of the King IV requirements.

Voting on the remuneration policy is only applicable to companies. Discuss who may vote and approve the remuneration policy, as well as what should happen if the remuneration policy and/or its implementation was voted against by 25% or more of the voting rights exercised.

List what should be disclosed by the governing body in relation to compliance according to the King IV Report.

Part 5.4 of the King IV Report deals with the governance of functional areas.  Explain what should be achieved by technology and information management, under the control of the governing body.

List the functions that the governing body should implement that will result in effective risk management.

Illustrate in a table who in the organisation is responsible for the following functions:

Recently while scanning through the annual report of Stadium Ltd, a company listed on the JSE, you came across the company's schedule of directors and committees.

 These appeared as follows:

1.           Board of directors (governing body)

 Chief executive officer                                –      Donald Winthrop

Managing director – Administration             –      Charles Tree

Finance director                                           -     Monty Mann

Operations director                                    –      Christo Wells

Human resources director                          –      Jerry German

Marketing director                                      –      Koos Katswinkel

Non-executive director                               –      Caz Kallim

Independent non-executive director            –      Mary Maswai

The company has not appointed a chair.  The most senior director who arrives at the directors' meeting acts as chair.

2.           Committees

 2.1   Nomination committee                   –   Donald Winthrop    (chairman)

                                                                 –   Charles Tree

This committee makes recommendations to the shareholders regarding who should be appointed as directors.  If the two directors on the committee disagree, Donald Winthrop has the casting vote.

2.2   Remuneration committee       –   Donald Winthrop (chair)   

                                                       –   Monty Mann

                                                       –   Koos Katswinkel

2.3   Audit committee                 –   Monty Mann (chair)

                                                    –   Christo Wells                                                                                                   

                                                    –   Mitchell Street (internal audit manager)

                                                    –   External Audit

                                                    –   Fred Carver (finance manager)

All committees meet as and when required.  The board meets every six months.

3.     Risk committee

 The risk committee was disbanded at the beginning of the year.  The directors know the business and the risks involved.

REQUIRED

Comment on the information presented above in relation to the requirements of the King IV Report.

The governing body should delegate certain functions to well-structured committees.  Are the chair of the governing body and the CEO allowed to be members of the following committees in terms of the principles of the King IV Report?

1.          Audit committee

2.          Remuneration committee

3.          Nomination committee

4.          Risk committee

5.          Social and ethics committee

Explain the functions of the lead independent director.