CORPORATE GOVERNANCE 

The Board of Directors (“Board”) of Umeme limited understands and appreciates that sound governance practices are critical to the sustainability of the company. The company espouses best in good governance standards to further its operations and dealings with regulators, customers, Government, suppliers, financing agencies, partners, shareholders, stakeholders and the general public.

The Company’s best practices are benchmarked against recognized local standards as well as international best practice standards. The Company’s corporate governance framework adopted the world class standards on health and safety, climate change and corporate governance which underpin the environmental, social and governance considerations driven by the ethos of the founding shareholders.
Sitting at the helm of the Company and tasked with oversight of all the Company’s affairs, the Board’s process and functioning is enabled by the Company’s governance framework. This position is demonstrated by the type of committees that the Board has established and the levels of authority it has delegated to Management.

The Company is also a corporate member of the Institute of Corporate Governance of Uganda.

The Company has been recognized for the following achievements;

i. Best Utility: Distribution/Transmission: by East Africa Power Industry Convention, Nairobi;
ii. Best ESG Power Producer – CFI Magazine UK;
iii. Best 2014 Annual Report – Uganda Category: Financial Reporting Awards | CPA Kenya;
iv. 2014 Annual Report of the year – Silver Award: Financial Reporting Award| CPA Uganda;
v. Best Listed entity 2014 – Financial Reporting Award CPA Uganda;
vi. Recognition by the World Bank of Umeme’s performance in improved connection process, thus improving Uganda’s position by 5 places in the Global ease of Doing Business Survey. 

The Company’s governance framework is underpinned by the 
Company’s values which are:

• We place the Safety of our employees and the public at the center of our actions; 
• We provide an experience of exceptional Customer Service;
• We act with Integrity, fairness and transparency in all our dealings;
• We deliver our services as one Team; 
• We deliver quality services and value through Innovation and the zeal to succeed, continuously raising the bar on our performance.

Compliance with laws, regulations and guidelines

The Company is a public listed company that is licensed and regulated by the electricity Regulatory Authority (ERA). Compliance with license terms, contracts, laws and regulations is fundamental in Umeme’s continued operations. 
The Company is in material compliance with all laws, regulations, standards and codes governing the electricity sector in Uganda, and its operations.

The Company is bound by the Corporate Governance Guidelines of the Capital Markets Authority (CMA) and the Corporate Governance requirements of the Uganda Securities exchange. The Board exercises oversight of compliance and has ensured that there is a framework for the identification and management of compliance risk within the Company. Day to day compliance and risk management is undertaken by Management. 

 

Governance Structure

The Company is managed by the Board which assumes the primary responsibility of fostering the sustainability of the Company’s business. 
The Company has a unitary board structure with the roles of Chairman and Managing Director, who is the Chief executive Officer of the Company, separate and distinct. The Chairman of the Board is an independent and non-executive director. 
The Chairman is responsible for leadership of the Board and ensuring its effectiveness on all aspects of its role.
The directors understand their responsibility to act in the best interests of the Company and accordingly discharge their duties independently. The directors particularly through the Board sub-committees engage and guide Management in the execution of its duties and firmly challenge Management’s actions and assumptions as and when the need arises.

The Board maintains a clear delegation of authority framework to ensure that the operations of the Company run smoothly but within an acceptable control framework. 

The following are the 6 committees established by the Board:

1. Audit Committee; 
2. Environmental, Social and Governance Committee;
3. Customer Service and Loss Reduction Committee; 
4. Remuneration Committee;
5. Nomination Committee and
6. Strategic Review Committee.

Each Committee’s terms of reference set out its responsibilities, scope of authority, composition and procedures to be followed. 

BOARD COMMITTEES

Audit Committee

The Audit committee is responsible for the oversight of the financial reporting and related disclosures of the Company including the Company’s audit and control functions.

Composition: 

• Christopher Nicholson (Chairperson) 
• Adrian Mucalov 
• Stuart David Michael Grylls
• Gerald Ssendaula

The Committee was established by the Board of Directors to assist the Board in its oversight of: 
• The adequacy of the Company’s accounting system and internal control environment;
• The adequacy of the Company’s system for compliance with relevant laws, regulations, standards and codes;
• The identification of improvements that can or should be made to the Company’s internal controls, policies and financial disclosures;
• The functioning of the internal audit function and ensuring that the internal auditor has an unobstructed and clear communication channel to the Committee and the Board;
•    The frequency and significance of all transactions with related parties and assessing their propriety;
• The Company’s risk management system;
• The integrity and quality of the Company’s financial information; and
• The independence, objectivity, scope and quality of the external audit.

Environmental, Social and Governance (ESG) Committee

Composition:

• Pieter Adrian Faling (Chairperson) 
• Stuart David Michael Grylls 
• Charles Chapman 
• Florence Nsubuga
• Selestino Babungi

The ESG Committee advises the Board in relation to environment, social and governance matters arising out of the activities of the Company as they affect employees, contractors, visitors and communities.
The Committee’s responsibilities include:
• assessing and monitoring compliance with legislation and the regulatory requirements; 
• assessing standards for minimizing risks; 
• considering issues that may have strategic business and reputational implications for the Company and recommending appropriate measures and responses;
• reviewing significant incident investigation reports including fatality reports.

Customer Service and Loss Reduction Committee (CSLR)

The Committee is responsible for overseeing and advising on two important pillars of the Company’s strategy. It is generally responsible for ensuring that the Company provides the best services to all of its customers and remains focused on reducing energy losses in an effective and efficient way within its financial and policy constraints.

Composition:
 
• Gerald Ssendaula (Chairperson)
• Pieter Adriaan Faling 
• Florence Nsubuga
• Samuel Zimbe 
• Selestino Babungi

The Committee’s responsibilities include:
• ensuring that the Company has in place robust customer service and loss reduction strategies and implementation plans (“CSLRs”);
• providing guidance to Management in developing relevant CSLRs;
• monitoring the progress of implementation of the CSLRs; and
• providing status updates of Management’s performance against the CSLRs and making relevant recommendations to the Board. 

Remuneration Committee

The Remuneration Committee is responsible for ensuring that the Company has coherent remuneration policies and practices which are consistent with human resources objectives and which enable the Company to attract and retain executives and directors who will create value. 

Composition:

• Stuart David Michael Grylls (Chairperson) 
• Charles Chapman 
• Adrian Mucalov
• Selestino Babungi

The Committee assumes responsibility for equitably, consistently and responsibly rewarding Management having regard to the performance of the Company, the performance of the individual manager and the general pay environment.

The Committee’s other responsibilities include:
• Review of the Company’s approach to compensation;
• Oversight of the establishment of compensation proposals;
• Considering all material remuneration decisions e.g. those relating to the Managing Director and the Chief Financial 
Officer; and
• making recommendations as to appropriate incentive schemes. 

Nomination Committee

The Nomination Committee reviews and considers the structure and balance of the Board and makes recommendations regarding appointments, retirements and terms of office of directors.

Composition: 

• Adrian Mucalov (Chairperson)
• Patrick Bitature 
• Stuart David Michael Grylls 
• Gerald Ssendaula

The Committee’s responsibilities include:
• identifying and recommending to the Board, candidates for the Board and competencies of new directors;
• reviewing induction procedures;
• assessing and considering the time required of directors to fulfil their duties;
• reviewing succession plans for the Board and senior Management; and
• reviewing measures for keeping directors up to date with the Company’s activities and external developments.

The Committee is also tasked with reviewing succession plans for the SMT and is actively involved in the selection and appointment of the new executive directors. 

Strategic Review Committee

The Strategic Review Committee advises and assists the Board in matters of long-term planning for company.

Composition: 

• Charles Chapman (Chairperson)
• Patrick Bitature
• Stuart David Michael Grylls
• Samuel Zimbe 
• Selestino Babungi


The Committee’s responsibilities include:
• Serve as the Planning Implementation Committee; 
• Coordinate the collection and sharing of information, suggestions and proposals concerning long planning for Company;
• Study and report on specific issues and monitor specific projects as requested by the Board.

Strategic Planning;

The Board is responsible for providing the strategic direction of the Company. It approves the medium and long term strategy of the Company and engages with SMT at least once a year to review the strategic initiative so far undertaken and agree on changes if any. At the strategy sessions, the non-executive directors constructively challenge and help develop proposals on strategy. Performance against the approved strategic objectives is monitored at quarterly Board and committee meetings and assessed annually.

Company Secretary

The Board appoints a Company Secretary whose duties are to ensure that the Board remains cognizant of its duties and responsibilities to conduct the induction of new directors, coordinate Board trainings and maintain Board and Company records. All directors have access to the services of the 
Company Secretary. The Company Secretary function is currently outsourced to Shonubi, Musoke & Co Advocates who are empowered to play their pivotal role in the Company’s corporate governance framework.

Succession Planning

The Board is committed to succession planning through supporting local and foreign leadership training and talent identification and management. The Board is confident that its succession planning and talent management strategy will ensure continuity of the Company’s business in the long term.

Shareholder Relations

The Board ensures that regular and pertinent communication on the Company’s affairs is provided to all its shareholders. In addition to the AGM which all shareholders are encouraged to attend and which all directors attend, the Board provides other opportunities for shareholders to engage with the Management and the Directors of the Company. Institutional investors meet with Management to discuss performance and corporate governance matters at least twice a year following the publication of periodic reports and exercise their votes during AGMs. At the AGM, the Chairman explains each proposed resolution and grants reasonable time for discussions and questions on the proposal before a vote is taken.

The Board has implemented an effective investor relations function and process to assist it in executing its responsibility of ensuring appropriate shareholder engagement. 

Stakeholder Engagement

The Board is focused on ensuring that the Company maintains appropriate engagement with its key stakeholders who include the Government of Uganda, Electricity Regulatory Authority, suppliers, financial institutions, customers and the general public. The goodwill of stakeholders is important to the Company’s long-term future. The Board pursues these engagements directly and through the Management team, through the Communications function. At Board and committee meetings, the Directors discuss the state of stakeholder engagements and the steps to remedy any gaps in those relationships.

 

 

Dealing In Securities of the Company

The Company has a Prohibition of Insider Trading Policy whose purpose is to ensure that dealings in the Company’s shares by directors, major shareholders, contractors, senior management, employees in critical roles with access to sensitive information and their related parties, are conducted in an ethical manner that does not prejudice other current and prospective investors of the Company. The policy is strictly applied.
Under the policy, certain employees and directors are prohibited from trading in the Company’s shares during closed periods.

Management of Conflicts of Interest

The Company’s Articles of Association provide that a director who is in any way interested in a contract or proposed contract with the Company or in any matter which is about to be discussed or determined by the Board or a committee of the Board shall declare the nature of his or her interest at the meeting of the Board discussing the contract or matter and to the extent that the discussion or decision concerns that interest, he or she shall exclude himself or herself from further attendance at that meeting. 
Cases of conflicts of interest are duly taken note of by the Company Secretary.

Sustainability

The Sustainability Report provides an analysis of the Company’s sustainability performance in relation to issues that are relevant and material to the Company and to its stakeholders.