INTRODUCTION

Umgeni Water operates under a three-tiered management structure:

  • The Board of Umgeni Water, which is the official ‘Accounting Authority’ in terms of the Public Finance Management Act No. 1 of 1999
  • The Executive Committee (effectively the organisation’s executive management) and
  • Senior Managers.

The 15-member member Board comprising 14 non-executive and 1 executive member, provides strategic policy guidance to the executive team. Various Board committee meetings  address specific areas in detail in order for the Board to make informed decisions. This has mproved the corporate governance systems in the organisation.

The Board is governed by a code of ethics and the work of the committees is guided by specific terms of reference. Board meetings are well attended, and details of activities are disclosed below. Members of the Board consider and authorise strategic issues in accordance with laid-down Umgeni Water policy and procedures.

Responsibility for the efficiency and effectiveness of operations, the optimum utilisation of Umgeni Water resources, legal compliance, the safeguarding of assets and the existence of sound and effective internal controls rests ultimately with the Board. Accordingly the Board approves all corresponding policy, and monitors and guides the organisation’s overall performance.

The Chief Executive (CE) is assisted by four General Managers in implementing the policies, decisions and strategies adopted by the Board. In addition, the CE is responsible for fostering a culture of compliance and also ensuring that all employees support and abide by the Umgeni Water Code of Ethics. The General Managers attend all meetings of the Board to report on the activities of their divisions. Executive Management meetings are held fortnightly.

Shareholder Compact

In accordance with the Treasury Regulations issued in terms of the Public Finance Management Act 1 of 1999 (PFMA), the Board of Umgeni Water, as the Accounting Authority must, in consultation with its Executive Authority, the Minister of Water and Environmental Affairs, annually conclude a Shareholder Compact. The Shareholder Compact reflects the key performance measures and indicators to which Umgeni Water is committed. The Board continues to inform its Executive Authority on all major developments affecting the organization through:

  • Quarterly reporting against key indicators
  • Annual Sustainability Reports
  • Detailed five-year Business Plan
  • Direct contact between the Chairman, the Minister of Water and Environmental Affairs and the Portfolio Committee on Water and Environmental Affairs
  • Frequent communication at executive level on industry performance and policy issues.

Governing Bodies

Umgeni Water is fully committed to sound corporate governance. It actively embraces the King Report on Corporate Governance 2002 (King II), which advocates the need for institutions to be governed in accordance with its principles. Umgeni Water is driven by the values of customer focus, integrity, developmental approach, respect for people, environmental sustainability and excellence. Business relationships, characterized by ethical behaviour, require compliance with the set values, applicable legislation and business practices. Key initiatives to ensure continued compliance with good corporate governance included:

  • Alignment of the terms of reference of Board committees
  • Further refinement of the delegation of authority document to confirm alignment to legislation, regulations and internal policies
  • Formal incorporation of existing risk management initiatives into an Integrated Risk Management Framework to address and implement enterprise-wide risk throughout Umgeni Water
  • Development of a corporate business cycle to improve efficiency and effectiveness
  • Refinement of the corporate Balanced Scorecard to assist with meeting corporate objectives, using measurable targets.

The Board

 The Umgeni Water Board consists of 14 non-executive members and an executive member  (Chief Executive). The term of office of a non-executive director is determined by the Minister of Water and Environmental Affairs and is for a period not exceeding four years. Non-executive directors may be re-appointed for a period not exceeding three consecutive terms of office. The independence of the Board is maintained by adhering to certain key principles:

  • Limiting the number of hours per month that a Board member and Chairperson work on Umgeni Water business to 40 and 50 hours respectively
  • Keeping separate the positions of Chairperson and Chief Executive
  • Having an independent non-executive member of the Board as Chairperson
  • Having all Board Committees chaired by independent non-executive members.

The Chairperson is responsible for the overall leadership of the Board and is also a primary linkage between the Board, the Executive Authority and the Chief Executive.

Disclosure of Interest

On an annual basis and at every Board and Board Committees’ meetings members declare any interests and commit to non-disclosure of information that could unfairly advantage or disadvantage a party.

Code of Conduct

The Board Code of Conduct and Committees’ Terms of Reference set out the operational and other responsibilities of the Board. In effect, the Board Code of Conduct and Committees’ Terms of Reference serve to guide the Board and Committees in discharging their duties in order to ensure that the Board’s independence is upheld.

Role and Functions of the Board

The key functions of the Board are to provide strategic direction and leadership, ensure good corporate governance and be accountable for performance. Directors of the Board fulfil their role through attendance of and participation at Board meetings. The Board of Umgeni Water meets in accordance with the Corporate Business Cycle to hold discussions and take decisions on matters relating to the organisation’s Business Plan, budget, major capital expenditure, strategy and policies.