Introduction
The Steinhoff group and its directors are fully committed to the principles of corporate governance and to applying the highest ethical standards in the conduct of its businesses. The group endorses the principles of openness, integrity and accountability advocated by the code of corporate practices and conduct (the code) set out in the King II Report on Corporate Governance (King II).

Taking into account the structure of the board and the decentralised nature of the group’s operations, the position of chairman has remained with Bruno Steinhoff, who continues to play a key executive role. The roles of the chairman and chief executive officer (CEO) are, however, clearly defined and have been separated. In conducting its annual assessment of the composition of the board, the nominations committee reviews and assesses not only prescribed factors such as length of service, but also the performance-related independence of individual non-executive directors. At the annual general meeting of shareholders to be held on 10 December 2007, the notice of which appears on pages 225 to 231 of this report, shareholders will be asked to approve the appointment of an additional two independent, non-executive directors.

Should these proposed appointments be approved, the majority of directors serving on the board will be non-executive. This will ensure the appropriate balance between executive and non-executive directors as recommended by the code. In all other areas covered by the code, Steinhoff is fully compliant.

The group constantly reviews and, where required, adapts its structures, processes and policies to take into account internal developments and accommodate externally recognised standards of best practice as they evolve. In all dealings, we strive to ensure that the interests of our stakeholders are foremost in our decisions and that they are fully informed of the process. We believe that a corporate culture of compliance with applicable laws, regulations, internal policies and procedures is a core component of good corporate governance. This culture of good corporate citizenship in each jurisdiction in which we operate serves to maximise sustainable returns and to provide all stakeholders with the assurance that the group’s businesses are being managed appropriately.