Social, ethics and transformation report

 

The social, ethics and transformation committee (the committee) is pleased to present its report for the financial year ended 30 September 2016.

 

The committee operates according to written terms of reference approved by the board and reviewed by the board annually. During the course of the 2016 financial year, the committee met formally five times to discharge its duties and responsibilities. The committee has a clearly defined framework, aligned to the Companies Act, King III and other relevant legislation and standards, to determine the most effective processes and reporting formats to deal with matters under the committee’s mandate. The framework complements existing monitoring and reporting initiatives.

The committee recognises the fact that some of its statutory functions overlap with the functions or mandates or terms of reference of other committees of the board. Where appropriate, these functions had been aligned to the mandate of the committee. In other areas of overlap, such as safety, health and environmental matters, the committee, without derogating from its duties and responsibilities, worked closely with and relied upon the work of other committees of the board.

The attendance schedule of the committee is disclosed on page 144 of the corporate governance report.

Composition

The committee consists of a mix of independent non-executive directors and executive directors. The committee is constituted as follows:
  • SS Mkhabela (chairman – independent non-executive)
  • PJ Blackbeard (executive)
  • NP Dongwana (independent non-executive)
  • DB Ntsebeza (independent non-executive and chairman of the company)
  • OI Shongwe (non-independent non-executive)
  • CB Thomson (CE)

Purpose of the committee

The role of the committee is to assist the board of Barloworld Limited in discharging its statutory duties of ensuring that:
  • Diversity and inclusion is promoted throughout its operations
  • Non-discrimination is advanced through the elimination of any existing unfair discriminatory conditions, whether purposeful or inadvertent
  • Broad-Based Black Economic Empowerment and transformation initiatives are pursued
  • Social and economic development is promoted in communities in which the company operates
  • The environment is protected
  • Public health and safety is promoted
  • Ethics is effectively managed in the group and is supported and governed by our values, in accordance with the Barloworld Worldwide Code of Conduct and Code of Ethics

Further, the committee strives to apply relevant codes of best practice including but not limited to the United Nations Global Compact Principles and Sustainable Development Goals, the Organisation for Economic Cooperation and Development (OECD) guidelines regarding corruption, International Labour Organisation Decent Work Agenda, and the principles of good corporate citizenship as espoused in the King Report on Corporate Governance in South Africa (King III).

The committee has access to any director or prescribed officers or employees of the company. Where appropriate, they have provided information or explanation necessary for the performance of the committee’s functions.

Focus areas for the year under review

Responsibilities
The committee carried out the following duties:
  • Approved the diversity and inclusion programmes and targets on gender and race (South Africa only) for 2016
  • Considered restructuring proposals including the impact on employment at the Equipment southern Africa and Handling South Africa businesses
  • Received reports on the ethics line which identified certain matters for investigation with a report back to the committee, to understand emerging trends and behavioural traits that needed to be addressed
  • Received reports on progress on the implementation of the public sector engagement strategy for the South African operations
  • Approved the initiation of a strategic review of the corporate social responsibility programme to ensure better alignment with the company’s strategy, to address national development imperatives of countries where we operate and to continue support for only those programmes that have the requisite social impact
  • Reviewed and considered the impact of the new B-BBEE codes on the company’s transformation agenda and approved a revised supplier diversity strategy
  • Reviewed and considered the adequacy of the company’s programme and policies for the effective management of ethics
  • Reviewed and considered the company’s Worldwide Code of Conduct for alignment with the Sustainable Development Goals of the United Nations and the National Development Plan of South Africa
  • Received reports on the company’s involvement in business organisations in South Africa and the engagement with stakeholders on developments in the economic, social and political arenas
  • Received reports on the company’s activities relating to the environment, health and public safety
  • Received reports on labour relations climate across the group with focus on operations where restructuring was under way
  • Received a report on the effectiveness of social and ethics committees in South Africa and considered insights garnered therefrom to enhance committee performance

Diversity and inclusion

The adoption of diversity and inclusion as a strategic focus area for the company has elevated the profile of initiatives undertaken to date, not just in the eyes of our employees, but also our stakeholders. The bold targets we have set to increase workforce diversity requires a review of traditional HR strategies and a different approach that includes identifying and eliminating any employment barriers, perceived or real, to support the strategy. While the bulk of company spend is on procurement from OEMs, plans are under way to increase non-OEM spend with suppliers from under-represented groups in the supply chain. The diversity and inclusion strategy is aimed at ensuring the company remains competitive, credible and legitimate in the eyes of stakeholders and remains a leader in diversity and inclusion.

Evaluation of the committee

The performance of the committee is formally assessed annually. The evaluation report confirmed that the committee was performing its overall responsibilities effectively and satisfactorily.

Areas of focus for 2017

In a continued effort to meet the responsibilities under its mandate, the committee will focus on the following areas in the 2017 financial year:
  • Consumer protection: our terms and conditions of sale in respect of the impact they have on consumers
  • Stakeholder engagement: enhance the quality of relationships with stakeholders in the public sector
  • Diversity and inclusion: review company policies and attraction and retention strategies to support the drive to foster a culture of inclusion for all
  • Human rights: increase awareness of the importance of human rights in the company’s supply chain
  • CSR: oversee the review of the corporate social programme to ensure that strategy remains aligned to company objectives.

 

SS Mkhabela
Chairman
Social, ethics and transformation committee

18 November 2016