Question 2 (30 marks) Recently, while perusing the annual report of JSE listed company, Mullins Inc, you came across the company's disclosure of board and board committee composition. Mullins Inc manufactures agricultural machinery and was founded by Rob Mullins 30 years ago. He listed the company 10 years ago, and did not retain any shares in the company. From the extensive disclosures, commentaries and reports in the annual report, you were able to extract the following information pertaining to the board: Rob Mullins (Executive Chairman) B.Sc (Engineering) Tammy Quinn (CEO) B Comm MBA Beth Foley (Finance Director) (CA) SA Themba Dlamini (Operations Director) M. Sc (Agriculture) John Naidoo (Human Resources Director) B.A. (Sociology) Thembi Mbethe (Marketing Director) MBA Perry Majola (non-executive Director) CA (SA)) Pete Copley (non-executive Director) CA (SA) Note 1: Rob Mullins stepped down as CEO a year ago after 30 years of service as the CEO, immediately assuming the newly created role of Executive Chairman. Note 2: Perry Majola was for a number of years Mullins Inc's Finance Director, but retired 2 years ago. Rob Mullins, an engineer, was not interested in the financial function at all, and relied heavily on Perry Majola for financial information and financial decisions. He rejoined the board at Rob Mullins' request when Rob Mullins became the chairman, Rob Mullins has always taken responsibility for recommending and having directors appointed by the shareholders or appointing them himself. Note 3: Pete Copley is the CEO of Astro Invest, a large JSE listed company within the financial services sector. Neither Pete Copley nor Astro Invest have any financial interest in or business relationship with Mullins Inc. The company has two board committees, an audit committee and a remuneration committee each consisting of three members. Both are chaired by Rob Mullins and generally meet a few weeks after the financial year-end to discuss the recently completed audit and consider the remuneration of company personnel for the upcoming year. Perry Majola serves on both committees, as does Thembi Mbethe. The position of company secretary has been vacant for six months. Rob Mullins will make an appointment during the course of the upcoming financial year. The board of directors meets every quarter, but Thembi Mbethe is often forced to tender her apologies due to her demanding travel schedule and the fact that she holds the appointment of non- executive director in a number of other companies. Page 11 of 18 FACULTY OF COMMERCE, MANAGEMENT AND LAW YOU ARE REQUIRED TO: Comment on the information provided above in the context of the recommended practices provided by the King IV Code and the requirements of the Companies Act 2008 pertaining to the composition of the board and the composition, sufficiency, and role of the board committees