1. Retirement Fund Industry Challenges in enhancing greater accountability and oversight – what audit committees can do. Sbu Luthuli

2. Page 2 Agenda 5 th Annual Audit Committee Conference ► Retirement Fund Structure ► Governance Challenges ► What can Audit Committees do

3. Page 3 Retirement Fund Structure ► Governed by a Board of Trustees ► Elected/Appointed in terms of Fund Rules ► Trustee ► One to whom something is entrusted ► Occupy a position of trust 5 th Annual Audit Committee Conference

4. Page 4 Retirement Fund Structure Cont.… ► Accountability ► Responsible ► Account in a transparent manner ► Answerable ► Oversight ► Watchful and responsible care ► Act of directing work being done ► Responsible for making sure it works efficiently and correctly 5 th Annual Audit Committee Conference

5. Page 5 Retirement Fund Structure Cont…… ► Board Committee ► Audit Committee (AC) ► Internal Control ► Risk Management ► AFS ► Governance ► Internal Audit ► External Audit ► Compliance 5 th Annual Audit Committee Conference

6. Page 6 Governance challenges 5 th Annual Audit Committee Conference

7. Page 7 Governance challenges Cont.… ► Trustees are Elected/Appointed 5 th Annual Audit Committee Conference

8. Page 8 Governance challenges Cont…. ► This creates a skills diversity challenge ► Imagine a soccer team with strikers only – no defenders ► Audit Committee skills required ► “The essence of the independent mind lies not only on what it thinks, but how it thinks it….” 5 th Annual Audit Committee Conference

9. Page 9 Governance challenges Cont… ► This is a very complex industry ► Reliance on service providers ► Fiduciary responsibility – member life savings 5 th Annual Audit Committee Conference

10. Page 10 What can Audit Committees do ► Clear delegation from the Board of Trustees ► Terms of Reference for AC ► Clearly defined roles and responsibilities ► Code of Conduct ► Ability to seek professional advice ► Skills gap-analysis ► Ability to appoint external experts to AC ► Training and development for AC 5 th Annual Audit Committee Conference

11. Page 11 What can Audit Committees do Cont… ► AC Self Evaluation exercise ► Adequate Fidelity Cover ► SLAs with service providers ► ESG issues ► Adequate insurance ► Ability to commit time to AC by members 5 th Annual Audit Committee Conference

12. Page 12 What can Audit Committees do Cont….. 5 th Annual Audit Committee Conference

13. Page 13 What can Audit Committees do Cont….. ► Example: ► African Bank saga ► Can SLAs be improved to hold service providers accountable ► How were ESG issues applied ► Has anyone been held accountable ► What are the lessons to improve role of AC to prevent such incidents 5 th Annual Audit Committee Conference

14. Page 14 5 th Annual Audit Committee Conference Thank you

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