Stakeholder engagement review
Our stakeholder approach
Fundamental to our approach is listening, exchanging ideas and understanding our stakeholders’ perspectives prior to defining and implementing related initiatives and programmes.
During the period we progressed a number of issues raised by our stakeholders as well as those identified by ourselves as a priority. We continued to drive the strategic intent and progress towards the related KPIs. Underscoring our commitment, the group’s strategic focus areas include people, diversity and inclusion, and sustainable development.
People
While we have continued to drive improvements in health and safety through the group, we sadly had one work-related fatality due to a motor vehicle accident. We are committed to our goal of zero work-related fatalities and this tragedy heightens our resolve and commitment to related training and awareness programmes. I am pleased that through this commitment, our lost-time injury frequency rate improved by 25% during the period.
The six elements of our integrated employee value model (IEVM), Inspire, Grow, Thrive, Live, Relate and Reward, focus our human resources initiatives and inform our approach to achieving a high performing organisation, as well as accessing the collective wisdom and efforts of all employees.
With the downturn in the mining sector and the depressed economic environments in southern Africa and Russia, we more than ever relied on our human capital to progress the company’s strategic objectives. The past year has proved challenging in terms of fulfilling all our employee value ambitions; however, notwithstanding the economic circumstances, our acquisitions enabled us to widen career opportunities for our people, with promotions, transfers to different business units to broaden their exposure, experience and a strengthening of our talent pipeline.
One of the interesting trends we are closely monitoring is the impact of millennial generation employees in Barloworld who comprise approximately 48% of our workforce. Their career aspirations, attitudes, perspectives and their usage of technology has necessitated a review of our recruitment, retention and training and development strategies, to better align with these individuals, as well as to attract and retain their skills.
Technology continues to impact employment practices and we are adapting the design of our work practices accordingly. Equipment southern Africa has implemented a platform that digitises repetitive HR tasks using cloud-based technology. Via their mobile phones, employees are able to access and view payslips, leave balance and view claims and workflow items. This is the first phase of a paperless system and we have recorded a corresponding increase in productivity in affected operations. Our plan is to expand the system to incorporate additional aspects of our IEVM and extend the initiative into other operations in the year ahead.
Another exciting development has been the formalising of our longstanding mentorship and coaching programmes. Our management teams received refresher training on mentoring and a number have gone on to become certified coaches. An early assessment indicates improved feedback from both management teams and the mentees, and we expect improved outcomes in terms of our IEVM and employee value creation metrics. We continue to track progress against these metrics in accordance with our Vision 2020 ambitions.
We are mindful of global trends and the topical issues of executive remuneration and bridging the inequality that exists in society, and that these need to be addressed. Internally, we measure the pay ratio between executives and the average of the lowest grade in each country where we operate with the purpose of appropriately managing the ratio and ensuring that it does not increase. While a minimum wage is not legislated in most geographies of operation, we monitor wages at the lower levels to ensure they align with our goals and standards. Our experience has been that where acquisitions have been made, target employees have, in general, experienced an improvement in their benefits as they are aligned to Barloworld standards.
Diversity and inclusion
Our diversity and inclusion strategy has energised the business not just to strive to reflect the demographics of the countries where we operate, but to assume leadership with regard to gender representation and in the case of South Africa, also with respect to race.
During the past year, a number of women were appointed, younger managers promoted and persons classified as “previously disadvantaged” in South Africa appointed to senior and executive management positions. All divisions remain focused on achieving targets in place on gender, and race in South Africa, in terms of Vision 2020. Our competitiveness depends on appointing the right calibre of leaders, reflective of local demographics, who have been equipped to succeed.
Our approach has enriched diversity of thought and broadened understanding of the different cultures in our employee base. As we accelerate initiatives to promote inclusivity in line with our strategy, we expect a positive response from employees and to see increased trust levels of the leadership of the organisation.
While the bulk of procurement spend is on OEM products, supplier diversity has been receiving focus with the aim of building capacity in small and medium enterprises, sourcing from a broader section of the local population and supporting the national imperatives of the countries where we operate. In South Africa we have aligned with the objectives of the National Development Plan by partnering with the Department of Trade and Industry to set up an Incubation Hub for small businesses to promote long-term sustainability through capacity building and access to markets.
Strategy
While the past year has been difficult, we remain committed to our Vision 2020 aspirations and the ambitions of our six strategic focus areas. Our strategic planning methodology continues to be entrenched throughout the group, informing the process for our operations to develop an integrated strategic approach to realising Vision 2020, and optimally positioning the group for the future.
Our approach incorporates identifying divisional and group business models, risks, opportunities and growth areas, performance measures, and related strategies. Accountability for strategy rests at the highest divisional and group levels. Our process is entrenched throughout the group by a network of strategy coordinators, as well as formal approval, monitoring and review structures. It is underpinned by our shared value philosophy and our perspective on sustainable development, one of Barloworld’s strategic focus areas.
We appreciate the implications of Vision 2020 on our stakeholders and strive to balance their interests, now and into the future.
During the period we completed a number of strategic actions to enhance returns and support our growth ambitions. These were identified through our processes and predominantly executed at divisional levels.
We continue to review the group business model and structure. The appointment of Chris Wierenga to the executive committee with responsibility for group strategy, mergers and acquisitions underscores our commitment to purposeful strategy, growth and sustainable value creation.
Our Worldwide Code of Conduct forms part of our strategic framework. It informs our individual and collective behaviour and sets the standards against which we and others judge our actions. It is central to Barloworld being a respected corporate.
Sustainability
Our approach to sustainable development incorporates being a respected corporate citizen, reducing our environmental impact, offering and delivering solutions that generate sustainable outcomes, and enhance our customers’ and group profitability.
By having sustainable development as one of our six strategic focus areas, and sustainability as one of our five core values, we ensure that they are inseparable elements of our value creation process.
Our priorities include the health and safety of our employees and other stakeholders affected by our business, non-renewable energy consumption, greenhouse gas emissions, renewable energy, water usage, responsible waste management and respected corporate citizenship.
Our Vision 2020 includes aspirational targets for these aspects and we report our progress on an annual basis.
In support of our objectives we continue to refine our reporting processes and platforms, and have significantly enhanced our water recycling capacity. Internally we have initiated a renewable energy programme and continued our focus on responsible waste management. Both of these aspects are also components of solutions available to our customers.
Corporate social investment
In playing our part to advance the Sustainable Development Goals of the United Nations, our CSI spend has largely been directed to interventions that will have an impact on access to quality education, eradicating poverty and partnering with communities to address their pressing needs in line with our shared value philosophy. Equipment southern Africa and Handling have made a difference to lives of the learners in rural community schools in the past year through the provision of two computer laboratories with the purpose of upgrading basic computer skills in the Limpopo and North West provinces. The value of holistic development of learners extends to physical well-being and the initiative by our Motor Retail to develop a needed multi-purpose sports facility at a school in Soweto was well received. In the year ahead we will continue to align our efforts and support the attainment of inclusive quality education for all and lifelong learning is realised as outlined in the Sustainable Development Goals.
We believe efficient and effective communication is central to legitimate stakeholder engagement and that our integrated reporting is a key element of this. It is pleasing that Barloworld remained a constituent of the Dow Jones Sustainability Emerging Markets Index and was included in the FTSE/JSE Responsible Investment Top 30 Index.
In line with previous years our reporting includes a set of responses to the GRI G4 as well and our UNGC COP.
Sibani Mngomezulu
Group executive: Human resources and stakeholder relations
18 November 2016