COMPOSITION AND FUNCTIONING OF THE BOARD

Umgeni Water has a unitary Board comprising 13 non-executive members and one Executive member, the Chief Executive. The roles of the Chairperson and that of the Chief Executive are separate to ensure balance of power. The Chairperson of the Board and all other Board members (with the exclusion of the Chief Executive) are independent non-executive directors in the manner described in King IV Report on Corporate Governance, 2016 (hereinafter referred to as “King IV”). All Board members execute their legal duties in a professional manner, with integrity and enterprise. In terms of the Water Services Act (No 108 of 1997), Board members (save for the Chief Executive who is appointed by the Board) are appointed by the Minister responsible for Water and Sanitation.

The Board Members who have been re-appointed by the Minister of Water and Sanitation and endorsed by the Cabinet on Wednesday, 3^rd November 2021, are:

Members of the Board have vast experience in the water sector and expertise in business, finance, legal, ICT, engineering and management to mention but a few. The Board is, in terms of the Public Finance Management Act 1 of 1999, read together with the Water Services Act 108 of 1997, the Accounting Authority with full responsibility for governance and oversight and reports directly to the Executive Authority, the Minister of Human Settlements, Water and Sanitation.

The Board is accountable for the leadership and control of Umgeni Water. Its responsibilities include the development, review and monitoring of strategic objectives, approval of major capital expenditure, risk management and monitoring of operational and financial performance.

The Government of the Republic of South Africa, represented by the Minister of Human Settlements, Water and Sanitation, is the sole shareholder of Umgeni Water. The Board concludes a shareholder compact with the Executive Authority on an annual basis.

A Board Charter (reviewed periodically) provides a framework for fiduciary duties, responsibilities and overall functioning of the Board. The Board Charter is read in conjunction with the Public Finance Management Act (No 1 of 1999), as amended together with Treasury Regulations and as amended from time to time, the Water Services Act (No 108 of 1997), as amended, and King Code of Governance Principles, 2016 (King IV) and subscribes to relevant principles of the Companies Act.

Non-executive directors receive no significant benefits other tool of work allowances; and director’s fees. Director’s fees are determined by the Executive Authority on an annual basis and, therefore, no Board member is involved in determining his or her own remuneration.

The Board has established four committees to assist it in discharging its responsibilities, namely:

• Audit Committee
• Capital Projects, Fixed Assets and Procurement Committee
• Human Resources and Remuneration Committee
• Governance Committee

Umgeni Water has a three-tiered management structure:

• The Board of Umgeni Water is the official Accounting Authority as per the Public Finance Management Act (No.1 of 1999), as amended; (PFMA) and
• The organisation's Executive Committee (Exco)
• Senior managers

The 13-member, non-Executive Board guides the Executive team on strategic policy issues, and the sub-committees of the Board meet regularly and provide guidance to Management. Sub-Committees report to the Board on their activities in line with the developed terms of references.

The Chief Executive assisted by the Executive Committee implements decisions of the Board and manages the organisation on a day-to-day basis. This Executive structure is supported by a number of Senior Managers who provide technical information and assist the Executive team. On areas of strategic importance to the organisation, Umgeni Water consults and shares and receives information through Staff Information Sessions, Site Visits, the Staff Advisory Council and through bilateral meetings with Nehawu, the recognised union at the organisation.

Normal management meetings with staff are ongoing. Regular consultation and information meetings are held with customers, the Department of Water and Sanitation and the Parliamentary Portfolio Committee on Water and Sanitation, as well as with the investor community, to inform them of organisational matters.