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Social and ethics committee report

The social and ethics committee (the committee) is pleased to present its report for the 12 months ended 30 September 2017.

The board has allocated the oversight of, and reporting on, organisational ethics, responsible corporate citizenship, sustainable development and stakeholder relationships to the committee.

COMMITTEE GOVERNANCE

Composition and meetings

Members of the committee and its chairman are appointed by the board, on the recommendation of the nomination committee, and in consultation with the Chairman of the committee. During the year under review, the committee comprised two independent non-executive directors and three executive members, namely Mrs P Mnganga (chair), Mr WA Hook, Mr KJ O’Brien, Ms T Tabudi and Mr CF Wells. The Chairman of the board and CEO attend by invitation. Their qualifications and experience are available here.

King IVTM recommends that the committee should comprise a majority of non-executive members of the board. Accordingly, on the recommendation of the Nomination Committee, which was approved by the board on 14 November 2017, Mr KJ O’Brien and Ms T Tabudi will resign as members of the committee and attend meetings by standing invitation.

The committee meets formally twice a year. The Chairman of the board and the CEO attend meetings by invitation. Members attendance at meetings was as follows:

Terms of reference

The committee operates in accordance with a formal terms of reference and work plan, which was reviewed and amended in line with the King IVTM recommendations and approved by the board on 14 November 2017.

A copy of the committee’s terms of reference is available here.

Role and responsibilities

The committee oversees the company’s social and organisational activities relating to the environment and its stakeholders. It monitors the company’s sustainability performance to ensure that the company’s ethics support its culture, it is seen as a responsible citizen, and that there is a balance between the company and the needs, interests and expectations of all stakeholders.

Details of the committee’s duties are contained in its terms of reference, which are available here.

In addition to the key activities below, the committee received feedback on the following matters

Detailed feedback on the above issues can be found here

The committee also undertook a self-evaluation of its performance and strongly believes that:

  • it is appropriately constituted with clearly defined terms of reference and appropriate reporting lines to the board;
  • the frequency and duration of committee meetings were appropriate to enable members to discharge their mandate;
  • it has a mix of the required skills to address a range of issues and risks pertaining to the committee;
  • the members have a clear understanding of their responsibilities and authority;
  • it provides clear and specific guidance to the board as mandated, and assists the board in its overall responsibility to ensure the proper governance of the company;
  • members are well prepared for their meetings; and
  • the Chairman of the committee is effective.

Key Activities

ORGANISATIONAL ETHICS

Ethics within the company is addressed through SPAR’s Code of Ethics. The code applies to all the company’s employees and directors. Ethics at SPAR is simply ‘the way we do things here’, and is defined as: ‘Doing the right thing in the best long-term interest of all stakeholders, even when no one is watching.’

SPAR subscribes to Tip-offs Anonymous, a confidential whistle-blowing hotline service operated by Deloitte & Touche that enables employees to report illegal actions and ethical misconduct. A hotline report is received per distribution centre and central office monthly. During the 2017 financial year, three reports were received relating to alleged fraud and unethical behaviour, all of which were addressed satisfactorily by internal audit and the relevant distribution centres.

The SPAR Code of Ethics was relaunched during the 2017 financial year under review, along with the Tip-offs Anonymous hotline. The code was translated into Afrikaans, isiZulu, isiXhosa and Sesotho. Each employee received their copy of the code with a personalised message regarding ethics from the respective divisional managing directors and the CEO.

Although employees are aware of the whistle-blowing hotline, a whistle-blowing policy is not in place and will be drafted for committee and board review and approval in 2018.

CORPORATE CITIZENSHIP

The committee reviewed and approved the corporate social responsibility policy, and received assurance on all relevant matters in its terms of reference from the following committees during the 2017 financial year:

  • Audit Committee
  • Risk Committee
  • The SPAR Guild of Southern Africa Social and Ethics Committee
  • The Build it Guild of Southern Africa Social and Ethics Committee

During the 2018 financial year, the committee will address any non-compliance with King IVTM, with respect to corporate citizenship.

STAKEHOLDER RELATIONSHIPS

A comprehensive stakeholder engagement framework is being developed and will incorporate the engagements currently being undertaken in the joint business planning meetings held with 13 suppliers.

The committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference and has performed its statutory duties, as set out in the Companies Regulations.

Thanks go to the members of the committee for their dedicated and constructive contributions to the functioning of the committee.

P Mnganga
Chairperson
14 November 2017