QUESTION 2 (CORPORATE GOVERNANCE) (20) The managing director of one of your firms clients Milano (Pty) Ltd, a large textile manufacturing company, has completed your firms standard corporate governance questionnaire which has been submitted to you for evaluation. An extract from the questionnaire is shown below. Question Response by managing director 1. Are the positions of Chief Executive Not applicable. We do not consider it Officer and Chairperson of the Board necessary to have a Chairperson of the Held by different people? Board. Directors meetings are controlled By me. 2. Number of directors 2.1 executive directors? There are seven executive directors. 2.2 non executive directors? There are two non executive directors. 2.3 independent non executive None. We dont consider that there is such a Directors? Thing as an independent non executive Director. If you are a director you must be Totally committed to the company, you Cant be independent. 3. Are Board committees appointed by No. I appoint all committees to assist the The directors? Board. 3.1 audit committee? No, not necessary as we have an efficient Internal audit department which reports Regularly to me. 3.2 remuneration committee? Yes, a three man committee consisting of Myself, the director of Human Resources And one of the non executive directors. 3.3 other committees(specify)? No other committees considered necessary. If we need a committee for a specific task I Appoint it. Page 9 of 12 YOU ARE REQUIRED TO discuss the action which your firm should take to comply with its professional duties and evaluate Milano (Pty) Ltds compliance with the recommendations of the King Report IV on corporate governance based on the information provided.