Governance, Commitments & Engagement

  • 4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight

    Integrated Report 2012 - Board of directors
    Integrated Report 2012 - Corporate governance report - Board committees
    Annual General Meeting Document 2012 - Corporate governance report

    The board and its committees are constituted in terms of the requirements of the Companies Act and The King Report on Governance for South Africa (King III), and are governed by written terms of reference.

    The board recognises it is the central point for and custodian of corporate governance. As such, the board always strives to ensure that the group aligns itself with local and international codes of good corporate governance, seeks to apply best practice and follows relevant trends of good corporate governance.

    King III became effective for the group in its 2011 financial year. The board continuously reviews the extent to which Barloworld applies the principles and recommended practices.

    This review identifies the governance principles already being applied and those which the company needs to address or further entrench. The review also identifies areas of improvement or ways in which our governance practices could be enhanced. 

    The group applies the governance principles contained in King III and continues to further entrench and strengthen recommended practices in our governance structures, systems, processes and procedures. 

    Membership of the board, which is the group’s ultimate governance structure, is reflected in the table below.  Also reflected is membership of board sub-committees.

    Board and subcommittees composition

    Number Year
    appointed
    Audit General
    purposes
    Nomination Remuneration Risk and
    sustainability
    Social,
    ethics and
    transformation
    Independant non-executive directors                        
    DB (Dumisa) Ntsebeza (chairman)   1999       Chairman   Chairman   Member       Member
    AGK (Gordon) Hamilton   2007   Chairman   Member   Member   Member   Member    
    SS (Bongi) Mkhabela   2006           Member           Chairman
    B ( Babalwa) Ngonyama   2012   Member                    
    SS (Sango) Ntsaluba   2008   Member           Member   Chairman    
    SB (Steve) Pfeiffer   2001       Member   Member   Chairman        
    G (Gonzalo) Rodriquez de Castro Garcia de los Rios   2004                       Member
    Non-independant, non-executive directors                        
    NP (Neo) Dongwana   2012                        
    AGK (Gordon) Hamilton   2007       Member                
    Executive directors                        
    CB (Clive) Thompson
    (chief executive)
      2003       Member           Member   Member
    PJ (John) Blackbeard   2004                   Member   Member
    PJ (Peter) Bulterman   2009                   Member    
    M (Martin) Laubscher   2005                   Member    
    OI (Isaac) Shongwe   2007                   Member   Member
    DG (Don) Wilson   2006                   Member    

  • 4.2 Indicate whether the Chair of the highest governance body is also an executive officer

    Integrated Report 2012 - Board of directors
    Integrated Report 2012 - Corporate governance report - Chairman and chief executive
    Annual General Meeting Document 2012 - Corporate governance report - Composition of the board
    Annual General Meeting Document 2012 - Corporate governance report - Chairman and chief executive

    The chair of the highest governance body, the board of directors, is not an executive officer.

    No individual has unfettered powers of decision-making. Responsibility for running the board and executive responsibility for conducting the business are differentiated. Advocate Dumisa Ntsebeza SC, an independent non-executive director, is chairman of the board and Clive Thomson, an executive director, is chief executive officer.

    The roles of the chairman and chief executive are separate and clearly defined. The chairman is responsible for leadership of the board, ensuring its effectiveness on all aspects of its role and setting its agenda. The chief executive provides leadership to the executive team in running the business and co-ordinates proposals developed by the executive committee for consideration by the board.


  • 4.3 For organisations that have a unitary board structure, state the number and gender of members of the highest governance body that are independent and/or non-executive members

    Integrated Report 2012 - Board of directors
    Integrated Report 2012 - Empowerment and transformation - Diverse board of directors

    Integrated Report 2012 - Employees by employment level and gender – group
    Annual General Meeting Document 2012 - Corporate governance report - Board of directors

    Considerable thought is given to board balance and composition. Collectively the board believes that the current mix of knowledge, skill and experience meets requirements to lead the company effectively. The board has fifteen (15) directors, comprising nine (9) non-executive directors, and six (6) executive directors. There are four (4) female directors.

    The Barloworld board has a majority of independent non-executive directors. The board considers seven of the nine non-executive directors to be independent. Hixonia Nyasulu is not regarded as independent in view of her participation in the black ownership transaction that resulted in the transfer to her, indirectly or directly, of shares that are considered to be material in relation to her personal wealth. Neo Dongwana is not considered independent as she was a partner in Deloitte, the company’s external auditors, until December 2010. Despite the determination reached, the board believes the skills, knowledge and experience of these directors remain valuable to the organisation.

    Board and subcommittees composition

    Number Year
    appointed
    Audit General
    purposes
    Nomination Remuneration Risk and
    sustainability
    Social,
    ethics and
    transformation
    Independant non-executive directors                        
    DB (Dumisa) Ntsebeza (chairman)   1999       Chairman   Chairman   Member       Member
    AGK (Gordon) Hamilton   2007   Chairman   Member   Member   Member   Member    
    SS (Bongi) Mkhabela   2006           Member           Chairman
    B ( Babalwa) Ngonyama   2012   Member                    
    SS (Sango) Ntsaluba   2008   Member           Member   Chairman    
    SB (Steve) Pfeiffer   2001       Member   Member   Chairman        
    G (Gonzalo) Rodriquez de Castro Garcia de los Rios   2004                       Member
    Non-independant, non-executive directors                        
    NP (Neo) Dongwana   2012                        
    AGK (Gordon) Hamilton   2007       Member                
    Executive directors                        
    CB (Clive) Thompson
    (chief executive)
      2003       Member           Member   Member
    PJ (John) Blackbeard   2004                   Member   Member
    PJ (Peter) Bulterman   2009                   Member    
    M (Martin) Laubscher   2005                   Member    
    OI (Isaac) Shongwe   2007                   Member   Member
    DG (Don) Wilson   2006                   Member    

  • 4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body

    Integrated Report 2012 - Stakeholder engagement
    Integrated Report 2012 - Our people - Critical success factors for employee value creation
    Integrated Report 2012 - Corporate governance - Relationship with stakeholders
    Integrated Report 2012 - Our people - Employee engagement
    Annual General Meeting Document 2012 - Letter from chairman
    Annual General Meeting Document 2012 - Notice of annual general meeting
    Annual General Meeting Document 2012 - Form of proxy and notes
    Annual General Meeting Document 2012 - Relationship with stakeholders
    Annual General Meeting Document 2012 - Shareholders' diary and map
    Annual General Meeting Document 2012 - Question form of annual general meeting

    The company is a strong proponent of transparency, best-practice disclosure, consistent communication and equal and timely dissemination of information to shareholders. It encourages active participation by shareholders at general meetings and maintains an investor relations programme which, inter alia, organises for corporate and divisional executives to attend regular meetings with shareholders and potential investors.

    The company has regular dialogue with institutional shareholders where it believes this to be in the interests of shareholders generally.  Feedback from these visits is shared with the board. The chairman routinely offers key shareholders the opportunity of meeting to discuss governance, strategy or other matters. 

    The interests of private shareholders remain paramount and, recognising their needs, our website contains a range of investor relations and material issues, including an update on activities, copies of all presentation materials given to institutional investors and further explanation of matters in the integrated report. 

    The Annual General Meeting is normally attended by all directors. Shareholders are encouraged to attend and to ask questions. They also have the opportunity to meet with directors after formal proceedings have ended.

    The notice of annual general meeting, detailing all proposed resolutions appears in the Barloworld Annual General Meeting document.

    Barloworld complies with all legal communication requirements. The group regularly engages its shareholders and the investor community through a number of interventions, including: 

    Bi-annual results presentations
    Annual general meetings
    Annual reporting
    Investor conferences and presentations
    Investor site visits and ‘Roadshows’
    Media releases
    Focused surveys

    Employee engagement processes provide opportunities for our people to make recommendations and influence direction and include:

    Individual meetings
    Structured team forums
    Individual and team performance discussions
    Briefings
    Strategic plan briefings
    Anonymous, structured individual perception surveys
    Global leaders conferences at which the top leadership team participates in formulating the company’s strategy and related issues. These are held every two years, with the most recent conference held in March 2011 and the next scheduled for March 2013.


  • 4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization's performance (including social and environmental performance)

    Integrated Report 2012 - Remuneration summary report - Short term incentives
    Annual General Meeting Document 2012 - Remuneration report
    Annual General Meeting Document 2012 - Remuneration report - Remuneration committee
    Annual General Meeting Document 2012 - Remuneration report - Short-term incentives

    The remuneration committee makes recommendations to the board on the structure and development of policy on executive and senior management remuneration, taking into account market conditions. It determines the criteria necessary to measure the performance of executive directors in discharging their functions and responsibilities. It also determines remuneration packages for the chief executive officer and executive directors of the company.

    For non-executive directors, the committee makes recommendations to the board on fees to be paid to each non-executive director for services rendered as a member of the board or a board sub-committee. Once these fees have been adopted by the board, they are submitted to shareholders at the general meeting for approval prior to implementation and payment. Details of fees proposed to shareholders for approval are set out in the notice of annual general meeting.

    Where appropriate, the committee consults with the chief executive or other executive or non-executive directors in fulfilling their duties under the committee’s terms of reference.

    Key responsibilities and role of the committee include:

    Determining any criteria necessary to measure the performance of executive directors in discharging their functions and responsibilities
    Reviewing the terms and conditions of the chief executive and executive directors’ service agreements, taking into account relevant market information and information from comparable companies where relevant, to ensure that they are fairly, but responsibly appraised and rewarded for their individual contributions towards enhancing the company’s performance
    Determining specific remuneration packages for the chief executive and executive directors of the company, including but not limited to basic salary, benefits in kind, any annual bonuses, performance-based incentives, share-based incentives, pensions and other benefits
    Determining any grants to executive directors and other senior employees made pursuant to any executive share scheme adopted by the company in the annual general meeting.

    Executive incentivisation includes addressing central aspects of group strategy including sustainable development objectives such as energy and emissions efficiency. Managing of this process is facilitated through an integrated performance scorecard system.  


  • 4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided

    Integrated Report 2012 - Corporate governance summary report - Conflict of interest
    Annual General Meeting Document 2012 - Corporate governance - Conflict of interest

    The board recognises the importance of acting in the best interest of the company and protecting the legitimate interests and expectations of its stakeholders. The board consistently applies the provisions of the South African Companies Act and JSE listing requirements on disclosing or avoiding conflicts of interest. Directors are required to declare their interests in general annually, and specifically at each meeting of the board, as well as to recuse themselves when appropriate.

    Among other measures to deal with conflicts of interest the company has a policy that addresses accepting gifts. This requires that gifts be officially declared and registered on the company’s gift register.


  • 4.7 Process for determining the composition, qualifications, and expertise of the members of the highest governance body and its committees, including any consideration of gender and other indicators of diversity

    Integrated Report 2012 - Corporate governance summary report - Composition of the board
    Integrated Report 2012 - Corporate governance summary report - Board appointment process
    Annual General Meeting Document 2012 - Corporate governance report

    To ensure a rigorous and transparent procedure, any appointment of a director is considered by the board as a whole, on recommendation of the nomination committee.

    The selection process involves considering the existing balance of skills and experience and continuously assessing the needs of the company.  Barloworld’s commitment to empowerment and transformation and the ideal that its employee and leadership profile should reflect the society in which it operates, is an essential element of this process. Non-executive directors are required to devote sufficient time to the company’s affairs.

    While there is no formal limit on the number of other appointments directors can hold, approval must be obtained from the chairman prior to accepting additional commitments that may affect the time that can be devoted to the company.  Non-executive directors are required to advise the board of subsequent changes or additional commitments from time to time as approved by the chairman.

    Executive directors are permitted to accept external non-executive board appointments limited to a single external ‘for profit’ board.

    Independence of non-executive directors

    The Barloworld board has a majority of independent non-executive directors. The board considered the independence of directors, evaluating the rationale and purport of the requirements of independence in King III. An assessment, considering the salient factors and unique circumstances of each person, was performed for each non-executive director.

    In addition, the independence of non-executives who have served on the board for longer than nine years was assessed.

    The board is satisfied that seven of the nine current non-executive directors are independent.

    Hixonia Nyasulu is not regarded as independent in view of her participation in the black ownership transaction that resulted in the transfer to her, indirectly or directly, of shares that are considered to be material in relation to her personal wealth. Neo Dongwana is not considered independent as she was a partner in Deloitte, the company’s external auditors, until December 2010. Despite the determination reached, the board believes the skills, knowledge and experience of these directors remain valuable to the organisation.


  • 4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation

    Integrated Report 2012 - About Barloworld - How we do business ' the Barloworld way '
    Integrated Report 2012 - Implementing our strategy

    Integrated Report 2012 - Stakeholder engagement

    Integrated Report 2012 - Our People - Critical success factors for employee value creation

    Integrated Report 2012 - Empowerment and transformation
    Integrated Report 2012 - Environment: Identified material aspects
    Annual General Meeting Document 2012 - Corporate governance

    A number of these have been developed and contextualised in an overall framework.

    The commitment to building and sustaining an ethical organisational culture is entrenched in the company’s vision, mission, strategies and operations. The board assumes ultimate responsibility for the company’s ethical performance by delegating to executive management the task of setting up a well-designed and properly implemented ethics management process.

    In May 2011 the board approved an ethics and compliance programme for the group. This is designed to further entrench and integrate the requirements of good corporate governance throughout the group. The programme addresses ethics and governance, includes executive commitment, the worldwide code of conduct, systems infrastructure and due-diligence standards. The compliance standards provide the operational requirements for setting and maintaining policies, training, communication and reporting.

    The business of the group and its relationship with stakeholders is governed by a worldwide code of conduct and a code of ethics, both are approved by the board.

    The worldwide code of conduct articulates Barloworld’s commitment to doing business the right way, according to best practices, guided by the values of integrity, excellence, teamwork and commitment. The code of ethics enjoins Barloworld directors, management, employees and stakeholders to obey the law, respect others, be fair, honest and protect the environment.

    These guiding principles are supported by a group anti-fraud policy and a further policy dealing with directors and prescribed officers, agents, distributors, intermediaries, trade restrictions, export controls and sanctions. All these instruments appear on our website – www.barloworld.com

    The company also maintains an Ethics Hotline introduced in South African operations in 2002. This is an independent and confidential system for stakeholders to report unethical, dishonest or at risk behaviour, including non-compliance with company policies, as well as corruption and fraud.

    All incidents reported are investigated and, where appropriate, action is taken.

    The hot line is outsourced to Tip-offs Anonymous, an independent body within Deloitte, the group’s external auditors. Our commitment not to victimise whistle-blowers, as prescribed in legislation, enables transparency and promotes ethical conduct.

    The board and management understand that the company is not only an economic entity but a corporate citizen and, as such, it has a social and moral standing in society with all the responsibilities of that status.

    The board is therefore responsible for ensuring that the group protects, enhances and invests in the wellbeing of the economy, society and the natural environment and pursues its activities within the limits of social, political and environmental responsibilities outlined in various international conventions. To give effect to the group’s commercial, social and moral responsibilities, a number of standards, guidelines, policies and codes of practice apply, including:


  • 4.9 Procedures of the highest governance body for overseeing the organisation's identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles

    Integrated Report 2012 - Risk management
    Integrated Report 2012 - Corporate governance report - Corporate citizenship

    Integrated Report 2012 - Corporate governance report - Compliance with laws, rules, codes and standards

    Integrated Report 2012 - Corporate governance report - Regulatory compliance

    Integrated Report 2012 - Corporate governance report - Statutory compliance
    Integrated Report 2012 - Corporate governance report - Board committees
    Integrated Report 2012 - Corporate governance report - Internal Audit

    Integrated Report 2012 - Social, ethics and transformation committee report
    Annual General Meeting Document 2012 - Corporate governance - Ethical leadership and corporate citizenship
    Annual General Meeting Document 2012 - Corporate governance - Compliance with laws, rules, codes and standards

    Annual General Meeting Document 2012 - Corporate governance - Regulatory compliance
    Annual General Meeting Document 2012 - Corporate governance - Role and function of the board
    Annual General Meeting Document 2012 - Corporate governance - Statutory compliance
    Annual General Meeting Document 2012 - Corporate governance - Board committees
    Annual General Meeting Document 2012 - Corporate governance - Social, ethics and transformation committee

    Annual General Meeting Document 2012 - Corporate governance - Risk and sustainability committee
    Annual General Meeting Document 2012 - Remuneration report - Advisers

    There are essentially three aspects to this:

    1. Oversight and approval of the group’s strategic plan
    2. Review of group performance at quarterly board meetings. This includes:

      a. Economic
      b. Social
      c. Environmental aspects.

    3. Review of performance based on the terms of reference of various board committees which include: (link to committees in full Governance report)

      a. Audit
      b. General purposes
      c. Nomination
      d. Remuneration
      e. Risk and sustainability
      f. Social, Ethics and Transformation
      g. Executive

    The social, ethics and transformation committee’s responsibilities include adherence and compliance to the Companies Act, internationally agreed standards, codes of conduct and principles, including those in the United Nations Global Compact.

    The board is responsible for ensuring that the group complies with applicable laws and regulations and considers adhering to non-binding rules, codes and standards.

    The board recognises that the group’s operations cover many jurisdictions. These are at different levels of maturity and the rule of law exists in varying degrees with hybrid systems of governance developing in some instances.

    The board strives to ensure appropriate structures, processes and procedures with appropriate checks and balances are established to assist it in discharging its legal responsibilities and overseeing legislative compliance.

    Processes are also in place to ensure that the board is kept abreast of significant developments in applicable laws, rules, codes and standards. Compliance risk thus forms an integral part of the company’s risk management process and the board delegates to management implementation of an effective compliance framework and associated processes.

    The board and management understand the company is not only an economic entity but a corporate citizen and, as such, it has a social and moral standing in society with attendant responsibilities.

    The board is therefore responsible for ensuring the group protects, enhances and invests in the wellbeing of the economy, society and natural environment and pursues its activities within the limits of the social, political and environmental responsibilities outlined in international conventions.

    Identification of risks and opportunities follows a robust and systematic process. A comprehensive risk management policy is in operation throughout the group, complemented by the Barloworld Limited risk management philosophy. This includes dedicated divisional risk assessments with internal audit and group risk management services present. Risk management is incorporated into the group’s strategic planning process.

    In line with international best practice, risks are assessed on their probability, severity and quality of the existing control environment. These measures result in residual risk scores that indicate the importance of the risk and evaluate assessment of progress in addressing identified risks.

    Risks are detailed, comprehensively assessed and managed through acceptance, transfer, avoidance or reduction measures. Details are recorded in divisional and group risk registers.

    Formal reporting to the risk and sustainability committee takes place bi-annually and to the board annually. Initiatives to address identified risks include developing and implementing business continuity and disaster recovery plans. These include information technology and communications solutions as appropriate.

    While this planning is regularly reviewed at executive and board levels, internal audit plays a significant role in reviewing processes, procedures and controls.


  • 4.10 Processes for evaluating the highest governance body's own performance, particularly with respect to economic, environmental, and social performance

    Integrated Report 2012 - Chairman's letter
    Integrated Report 2012 - Corporate governance summary report - Board performance assessment
    Annual General Meeting Document 2012 - Corporate governance report - Board and board committees' performance assessment

    Annually, the performance of the chairman, chief executive officer and the board as a whole is appraised. The chairman and chief executive officer do not participate in discussions on their own performance. The chairman holds formal and informal meetings with individual directors during the year and, at the end of the year, there is a formal evaluation exercise.

    The assessment of the performance of the board for the year under review was independently conducted by an external service provider (PwC). After the performance evaluation of individual directors by their peers in 2012, the chairman discussed results with individual directors to obtain comment on issues raised by peers and to provide advice, guidance and offer assistance where appropriate.

    The group’s Annual General Meeting, full-year and interim result presentations and other ad hoc and ongoing stakeholder interventions give external stakeholders an opportunity to review the board’s performance against an open set of criteria including economic, environmental and social performance.


  • 4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organisation

    The group is mindful of the precautionary principle and its related obligations. Its code of ethics and structured risk management approach ensures that future risks to the public and the environment from its activities are identified and considered. Activities related to any identified risk are addressed. This applies to all group activities, including building new facilities. The group’s leading principals would be mindful of this principle in developing and introducing new products.


  • 4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organisation subscribes or endorses

    Integrated Report 2012 - Human resources, strategy and sustainability director’s report
    Integrated Report 2012 - Corporate governance report - Compliance with laws, rules, codes and standards
    Integrated Report 2012 - Corporate governance report - Corporate governance
    Integrated Report 2012 - Corporate governance report - Regulatory compliance
    Integrated Report 2012 - Environment: Identified material aspects - Targets
    Integrated Report 2012 - Environment: Identified material aspects
    Annual General Meeting Document 2012 - Corporate governance report - Corporate governance
    Annual General Meeting Document 2012 - Corporate governance report - Regulatory compliance

    Annual General Meeting Document 2012 - Corporate governance report - Statutory compliance
    Annual General Meeting Document 2012 - Corporate governance report - Standards of directors' conduct

    Obligatory

    1. The King Report on Governance for South Africa 2009 (King III). Effective 1 March 2010

    Voluntarily the group

    Ratified the UN Global Compact in December 2004
    Became a signatory to the South African Energy Efficiency Accord in 2005
    Is a signatory to the South African National Business Initiative’s (NBI) Energy Efficiency Leadership Network’s (EELN) Pledge which is also signed by the Department of Energy in South Africa in 2011
    Applies the South African Department of Trade and Industry’s broad-based black economic empowerment scorecard since its introduction in 2007
    Certain operations have ISO certifications such as ISO 9001 and ISO 14001 (These have various certification dates and validity periods).


  • 4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization: Has positions in governance bodies; Participates in projects or committees; Provides substantive funding beyond routine membership dues; or Views membership as strategic 

    Integrated Report 2012 - Stakeholder engagement
    Integrated Report 2012 - Environment: Identified material aspects

    The group is a member of or / signatory to

    UN Global Compact
    World Wide Fund For Nature (WWF)
    National Business Initiative (NBI)
    Endangered Wildlife Trust (EWT)
    The Business Trust
    Business Leadership South Africa
    Business Unity South Africa (BUSA)
    Member of Black Management Forum(BMF) in South Africa
    Member of the South African Supplier Diversity Council (SASDC)
    World Business Council for Sustainable Development (through NBI)
    Various chambers of commerce and industry
    Various industry and other relevant associations through its respective divisions


  • 4.14 List of stakeholder groups engaged by the organisation

    Integrated Report 2012 - Stakeholder engagement

    Barloworld recognises that its entire value-creation approach is underpinned to varying degrees by stakeholder engagement, by understanding stakeholder expectations and the impact of these relationships on its ability to create value across its strategic focus areas. Stakeholders are identified in a number of ways, engaged through a range of different channels and on a range of issues. Accountability for stakeholder engagement is centred in operational management and functional structures in the group.

    Additionally, the group’s stakeholder engagement is designed to connect commercial success (profitable growth) with societal benefits expressed, for example, through empowerment and transformation and/or sustainable development. The group understands that its competitiveness and societal well-being are closely intertwined.

    Dialogue with stakeholders assists the group to meet the needs of society, such as the provision of products with lower environmental impacts, for instance, to gain operating efficiencies and to anticipate risks and opportunities in the broader environment.  

    The group appreciates the role of social media in stakeholder engagement and strives to implement structures and systems, as well as allocate resources, in a way that uses the medium to the group and its customers' advantage.

    Refer to the group’s stakeholder engagement policy.

    Stakeholder   Nature of relationship   Nature of engagement   Material issues raised   Actions / Outcomes
    Shareholders and providers of capital  
    Central to sourcing and  securing capital
     
    Compliance with all legal communication requirements
    Bi-annual results presentations
    Annual general meetings
    Annual reporting
    Investor conferences and presentations
    Investor site visits
    Ad hoc media releases
    Central to sourcing and  securing capital
     
    Competitive return on investment
    Market perspectives Value creation performance
    Under-performing business units
    Strategy and identified growth opportunities
    Group's legitimacy
    Investor site visits
    Sound governance structures
    Executive remuneration including incentive schemes
     
    Communicate early in an honest and transparent manner
    Strategic issues are considered and appropriately addressed through group structures
    Executive resources in place to manage investor relations
    Independent remuneration advisors (PwC and PE Corporate Services)
    Full remuneration report tabled at annual general meeting
    Remuneration committee chaired by independent non-executive director
    Customers  
    Understanding customer sentiment
    Understanding customer requirements
    Business sustainability
    Long-term relationships
    Mutual benefit
    Identifying potential risks to, and opportunities for, the business
     
    Numerous individual and collective customer engagement interventions take place during the year
    Regular visits by senior executives
    Open days and site visits
    Anonymous surveys Entrenched in ISO 9001 standard
    Customers satisfaction survey
     
    Value of product, service and solution provided
    Ability to enhance customers’ value creation activity
    Service level agreements
     
    Delivery of required products, services and customer solutions
    Respect for consumers’ rights
    Provide information that is honest and relevant
    Ongoing customer contact and interaction
    Employees and their representatives  
    Sustainable value creation for and by employees
    Employer of choice
     
    Individual meetings
    Structured team forums
    Individual and team performance discussions
    Intellectual capital reviews
    Team briefings
    In South Africa; Work Skills and Employment Equity Forums are established
    Anonymous Individual
    Perception Monitoring (IPM) surveys conducted at least biennially throughout the group examine employee perceptions of a range of issues
    Meeting with employee representatives including trade unions in terms of recognised and industry / national agreements  

     

     
    Strategy, company performance and results
    Individual conditions of employment
    Security of employment
    Health and safety issues
    Career path and development
    In South Africa, work-skills plans and progress on employment equity
     
    Alignment with leadership philosophy

    Continual review of Employee Value Proposition to ensure employee attraction and retention, including:

    Conducive/flexible work environment
    Continual review of Employee Value Proposition to ensure employee attraction and retention, including:
    Responsible HR management
    Equitable reward and wage system
    Open and flexible communication
    Investment in employee development
    Sustainable organisational restructuring
    Awareness of strategic objectives and individual roles
    Principals and suppliers  
    Delivery of competitive integrated customer solutions
    Mutual benefit
    Long term relationships
    Governance framework
    Strategic frameworks
     
    Dealer, dealer council and licensee meetings
    Principals' conferences
    Formal reporting and information sharing
    Ongoing informal contact
    Product launches  
     
    Product issues and innovation
    Market positioning
    Financial and other performance review
    Customer issues and satisfaction
    Sustainable development matters
    Market information
    Supply chain empowerment

     

     
    Successful relationships with mutual value maximised
    Leading products and services
    Retained distribution rights
    Mitigation of an identified key risk
    Supply chain optimisation
    Terms and conditions of relationship updated and maintained
    Expanded preferential procurement and empowerment
    Public sector  
    Government institutions, departments and training initiatives
    Local authorities
    Diplomatic corps
     
    Consultation on emerging policy frameworks
    Compliance issues
    Progress on employment equity plans
    Fiscal and local issues such as building plans
    Training programmes and rebates
    Technical and financial assistance for SED
     
    Socio-economic development in South Africa
    Emerging policy and regulations on  climate change and carbon taxes  
     
    Collaboration on achievement of social and economic development objectives
    Consultation on emerging policy
    Civil society and local communities including beneficiaries of the company's , CSI, social economic (SED) and enterprise development (ED) initiatives  
    Industry associations and organised business organisations
    Non-governmental organisations
    Guidance and global best practice
     
    Relevant industry issues, industry lobbying and responses to proposed legislation or regulation
    Consultation with, and evaluation of, educational, environmental and welfare organisations
     
    Relevant industry issues, industry lobbying and responses to proposed legislation or regulation
    Development initiatives evaluated for leadership, technical and financial support
    Enterprise development opportunities identified

     

     
    Relevant industry responses submitted
    Appropriate initiatives supported through company’s CSI,  ED and SED initiatives
    Appropriate executive and leadership interventions implemented
    Climate change mitigation
    Empowerment partners  
    Mutual value creation / benefit
     
    Ad hoc meetings
    Structured interventions
    Operational meetings
     
    Operational performance and share price
    Respective contributions to enhance the relationship
     
    Communicate timeously and effectively on material issues
    Ensure two-way communication to strengthen relationships and establish mutual interests and objectives
    Enhanced company transformation
    Enhanced community service group partners' delivery
    Act on stakeholder transformation views and concerns
    Media  
    Open and co-operative relationship
     
    Annual media day
    Operational meetings and site visits
    Media releases
     
    Thought leadership
    Commentary on industry
     
    Annual review of media plan
    Appropriate exposure in media
    Main public reflection of company
    Good relationships Managed positioning of the Barloworld brand

  • 4.15 Basis for identification and selection of stakeholders with whom to engage

    Integrated Report 2012 - Materiality
    Integrated Report 2012 - Stakeholder engagement
    Integrated Report 2012 - Relationship with stakeholders
    Annual General Meeting Document 2012 - Corporate governance report - Relationship with stakeholders

    The identification and selection of stakeholders is in line with the group’s value-based management philosophy and approach. A core group of stakeholders incorporates employees, shareholders, customers, suppliers/principals, regulators and the communities in which business is conducted, as well as society at large.

    However, in the course of doing business, Barloworld engages a wider range of stakeholders who have different interests in the group and those whose activities can affect the group, and those which the group’s activities will affect, are prioritised.

    Barloworld recognises that an important component of its value-creation offering is based on inclusive stakeholder relationships and focused engagement. The intelligence gleaned in engagements is essential to ensuring that the group can better understand and respond to stakeholder needs and expectations, and strengthen its most important relationships. Stakeholders in turn are empowered through their inclusion in the company’s processes and derive benefit from having their concerns addressed.

    Stakeholders are identified through a range of channels in the course of doing business and as business leadership in society; sometimes stakeholders come forward and identify themselves. Irrespective, where concerns are legitimate, the company addresses these, listens to suggestions and engages honestly.
    Accountability for stakeholder engagement is centred in the operational management and functional structures in the group. The group’s stakeholder engagement policy is available at www.barloworld.com.

    The group’s key stakeholder groupings include:

    Shareholders and providers of capital
    Employees and their representatives
    Customers
    Principals and suppliers
    Public sector
    Civil society, including local communities and beneficiaries of the groups social economic (SED) and enterprise development (ED) initiatives
    Empowerment partners
    Media.


  • 4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group

    Integrated Report 2012 - Stakeholder engagement

    Shareholders and providers of capital

    The group regularly engages with its shareholders and investor community through:

    Bi-annual results presentations
    Annual general meetings
    Annual reporting
    Investor conferences and presentations
    Investor site visits
    Media releases
    Focused surveys

    Customers

    Barloworld’s relationships with customers are critical. The nature of the integrated solutions, rather than products, offered by group companies involves the company’s alignment with its customer’s strategic business objectives and building sound, long term partnerships. Therefore the group has comprehensive engagement processes in place across all divisions. By engaging and listening to its customers, the group can quickly determine material issues and respond appropriately.

    Numerous individual and collective customer engagement interventions took place during the year focused on long-term relationships and mutual benefit. All divisions appreciate the importance of these interactions and conduct appropriate interventions, including open days and focused surveys.

    Engaging with customers includes daily contact to evaluate service levels, invitations to give feedback and suggestions, and regular visits by senior executives.

    Principals and suppliers

    As a distributor of leading international brands, Barloworld represents a significant number of high-profile global principals.

    Distribution agreements, long-term relationships, structured meetings, reporting and performance reviews, and ongoing informal communication ensure frequent contact with principals.

    Our people also attend principals’ conferences where strategic issues, including product launches, are shared. Participants have an opportunity to engage with principals and raise concerns, make suggestions and participate in related workshops and discussions. Ongoing principal interactions cover product issues, market positioning, financial performance, customer satisfaction, sustainability matters, territory issues, market information, and the relationship in general.

    Mutual benefit, trust and transparency underpin the success of these relationships.

    A range of other suppliers including major contractors, long-term and ad hoc suppliers are engaged as appropriate. Small/black supplier development and outsourcing initiatives are also undertaken. 

    Employees and their representatives

    Employees are the focus of numerous and detailed engagement processes. These are formal or informal, structured and ad hoc, individual and collective.  Employee interaction is key to ensuring that the workplace supports productivity, employee contentment and allows them to further their personal and professional ambitions.
    Engagement processes enable employees to make recommendations and influence direction and include:

    Individual meetings
    Structured team forums
    Individual and team performance discussions
    Briefings
    Anonymous individual perception monitoring, at least every two years across the organisation
    Meeting with employee representatives (including trade unions) in terms of recognition or industry agreements for collective bargaining, organisational restructuring and other specified matters.

    Public sector, civil society and local communities

    We routinely engage government institutions and departments, municipal authorities, organised business and industry organisations and non-government organisations. We also engage with the applicants and beneficiaries of our social economic development and enterprise development initiatives, other development practitioners/organisations and funders.

    Empowerment partners

    The company meets with its empowerment partners as required or appropriate for the different categories. Central themes are operational performance, our share price and the respective contributions by the parties to our value-creation activities. We also address the relationship between the company and its empowerment partners and, in the case of our trusts, dividends.

    Media

    Barloworld regards the media as an important stakeholder and we are committed to accessible, open and transparent engagements. A wide range of initiatives includes statutory disclosures, integrated reporting, advertising, ad hoc announcements, editorial comment and publications, formal and informal meetings and briefings.

    Engagement specifically undertaken as part of the report preparation process

    Engagement in this regard is confined to internal stakeholders and with the group’s external auditors. The process for conceiving and compiling the report is an extensive one and involves a number of role-players across the organisation. Decisions regarding content, which includes materiality, and look and feel are taken by senior personnel in the group’s strategy and communications departments and signed off by the executive committee, board sub-committees, including audit committee, and the board.


  • 4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting

    Integrated Report 2012 - Stakeholder engagement

    Through our various engagement processes, we arrive at a set of material issues which we use to refine our strategy and define report content. These issues are reflected in the table below.

    Many of the issues raised by key stakeholder groups are dealt with as part of the engagement that takes place during the year. Given that customers are a key group, and that the business relies solely on their loyalty, issues and concerns raised by customers are prioritised. They are essentially individually focused and service oriented.
    Issues raised by employees and investors, principals and other service providers, are also addressed as quickly as possible during the year. Again, given the nature of Barloworld’s activities, geographic spread and range of principals, these are usually of an individual and specific nature, rather than collective and broad-based.

    In annual reporting, these issues are categorised and disclosed with a 12 month perspective focussing on themes rather than the individual issues.

    Key topics by stakeholder are shown in the following table:

    Stakeholder   Key issue   Management response
    Shareholders and providers of capital  
    Attractive financial returns through business cycles
     
    Addressing underperforming operations and implementing turn-around strategies
    Reallocation of resources to higher-returning businesses
    Financial targets and hurdles set for all operations
    Close monitoring and review of financial performance
    Financial performance incorporated into performance and remuneration metrics
       
    Competitive advantage through BEE status
     
    Optimise benefits resulting from leading empowerment status
       
    Internal cost savings through efficiency and stewardship initiatives
     
    Internal aspirational energy and emission efficiency improvement targets set
    Water stewardship initiatives being implemented
    Recycling, rebuild and remanufacturing initiatives in place
       
    Under-performing business units
    Identified growth opportunities
     
    Reallocation of resources to higher-returning businesses
    Under-performing business units receive attention
    Annual general meetings
       
    Executive remuneration and incentive schemes
     
    Disclosed in full remuneration report tabled at AGM
    Remuneration committee chaired by independent director in place
    PricewaterhouseCoopers and PE Corporate Services retained as independent remuneration advisors
    Customers  
    Unique solutions and relationships to achieve objectives
    Competitive offerings
    Easily accessible channels to market
     
    Close relationships and delivery of unique integrated customer solutions
    Alignment with leading principals
    Internal focus on effective and cost efficient structures and customer solutions delivery
    Established web-based channels to market in all divisions
       
    Achieve B-BBEE targets and localisation objectives to reflect local demographics and for commercial sustainability
     
    Focus on employment equity, skills development and procurement targets to retain leading B-BBEE status for all companies
       
    Solutions to assist in achieving own sustainability objectives
     
    Aligned with leading principals and central to products, services and customer offering
    Developed leading supply chain optimisation solutions that address environmental footprint issues
    Employees and their representatives  
    Strategy, company performance and results
    Individual conditions of employment, recognition and reward
    Security of employment
    Health and safety issues
    Career path and development
     
    Continual review of employee value proposition to ensure employee attraction and retention
    Conducive/flexible work environment
    Leading human resources management
    Competitive and equitable remuneration
    Performance management and career-path initiatives
       
    Non-discrimination and support
    In South Africa, work-skills plans and progress on employment equity
     
    Identified as group strategic focus area with set performance targets and objective
    Actively managed and drive to entrench diversity culture
       
    Enhanced employee value proposition through culture of sensitivity to environment and pride in stewardship initiatives
     
    Identified as group strategic focus area with aspirational targets set
    Commitment to lead in sustainable developmen
    Encouraged involvement in environmental stewardship
    Actively managed and drive to entrench sustainability culture in group
       
    Security of employment
    Individual conditions of employment, recognition and reward
     
    Addressing underperforming operations and implementing turn-around strategies
    Addressing operations in economically stressed regions to ensure sustainability
    Realistic and appropriate terms and conditions of employment in all operations
       
    Career opportunities and job security
    Group strategy, company performance and results
     
    Growth industries and regions identified
    Skills and resources identified to support growth strategies
    Job opportunities communicated
    Appropriate individual appointments and transfers made
    Principals and suppliers  
    Leading representation of products and services
    Identified market shares
    Engagement in product development
    Customer satisfaction
    Market information
     
    Leading distribution and after-market offering
    Investment into world-class facilities
    Focussed skills training and development initiatives
    Regular interaction and contact with principals
    Regular customer satisfaction surveys and feedback
    Mutual sharing of market and customer intellenge
     
    Alignment with their sustainable development initiatives and product offering
     
    Identified as group strategic focus area with aspirational targets set
    Commitment to lead in sustainable development
    Actively managed and drive to entrench sustainability culture in group
     
    Viability of dealer
     
    Addressing underperforming operations and implementing turn-around strategies
    Reallocation of resources to higher-returning businesses
    Financial targets and hurdles set for all operations
    Public sector  
    Support of social transformation and economic development objectives
     
    Identified as group strategic focus area with set performance targets and objectives
     
    Climate change mitigation and support for low carbon future
     
      Aspirational energy and emission efficiency improvement targets set
      Environmentally responsible customer solutions offered
    Support for appropriate public initiatives
    Civil society and local communities  
    Economy to reflect demographics of society
     
    Identified as group strategic focus area with set performance targets and objectives
     
    Responsive corporate citizenship
     
    Responsible business leadership
    Engagement with civil society on legitimate interests and concern
    Addressing needs of  local communities through corporate social investment, socio-economic and enterprise development programmes
     
    Responsible environmental custodianship
     
    Embedded in business operations through strategic process and  management metrics
    Empowerment partners  
    Mutually beneficial relationship and value creation
    Operational performance and share price
     
    Communicate timeously and effectively on material issues
    Open two-way communication
    Share relevant information
    Act to address concerns where possible
    Media  
    Relevant, credible, comparable information  and reporting
     
    Media informed through statutory disclosures, integrated reporting, advertising , ad hoc announcements, editorial comment and publications, formal meetings and briefings
    Operational meetings and site visits
    Media releases

     


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