The Social and Ethics Committee (the committee) presents the following report to shareholders for the 2019 financial year, in accordance with the requirements of the Companies Act.
Members of the committee for the financial year under review were independent non-executive directors, Phumla Mnganga (Chairperson) and Chris Wells and executive director, Wayne Hook. Their qualifications and experience are available here.
The following changes are noted in respect of the committee for the 2020 financial year:
- Lwazi Koyana was appointed as a member of the committee with effect from 1 November 2019.
- Wayne will retire as a member of the committee on 31 December 2019.
- Graham O’Connor will replace Wayne as a member of the committee on 1 January 2019.
The committee met formally twice during the financial year under review. Members’ attendance at meetings are recorded here. Permanent invitees at meetings are the Chairman of the board, the CEO, the Group Risk and Sustainability Executive, the Group Human Resources Executive and the Company Secretary (who acts as the secretary of the committee).
Evaluation of the committee
The committee conducted a self-assessment evaluation to measure its effectiveness and performance during the financial year under review. There were no concerns raised with the functioning of the committee nor with the efficiency and competence of its members. The next evaluation will be undertaken in 2021.
Role and responsibilities
The committee’s role and responsibilities are governed by its terms of reference as reviewed and approved annually by the board. The board has allocated the oversight of, and reporting on, organisational ethics, responsible corporate citizenship, sustainable development and stakeholder relationships to the committee.
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.
The committee receives feedback on all relevant matters in its terms of reference from the following committees:
- 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
The committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference, a copy of which can be found online.
Key focus areas
The committee is responsible for reviewing the group’s policies relating to ethics, social and economic development, good corporate citizenship, sustainable development and stakeholder relationships and during the financial year under review considered and recommended to the board for approval:
The Supplier Code, which emphasised SPAR’s values and how SPAR foresees its culture being lived across its entire business. The code outlines what common values are expected of all SPAR’s suppliers and for them to assist in appropriate decision-making and behaviour, based on what SPAR deems acceptable in terms of is people, community and environment.
The Sustainability Policy, which policy outlines SPAR’s approach to the management and integration of sustainability issues, including matters relating to the physical and social environment, economic development, governance and stakeholder engagement.
The Gift Policy, which provides guidance on the behaviours expected in accordance with SPAR values; promotes transparency and avoids business-related conflicts of interest; ensures fairness in the interest of employees and SPAR; and documents the process for the acceptance, receipt and giving of gifts.
Going into the 2020 financial year the committee will continue to review the various policies in place dealing with ethics, social and economic development, good corporate citizenship and sustainable development and implement a formal corporate compliance programme in order to monitor the company’s activities in this regard.
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.’
A SPAR Code of Ethics template for all offshore subsidiaries was circulated to the management of those subsidiaries, to be used as the basis for drafting their respective Code of Ethics polices.
The company encourages employees and other stakeholders to disclose any serious impropriety or improper conduct. SPAR subscribes to Deloitte’s Tip-offs Anonymous, which is an independent hotline that enables employees to report illegal actions and ethical misconduct confidentially.
During the financial year year under review 12 reports (2018: 12) were received. All reports were investigated and of the 12 reports received, three were in respect of independent SPAR stores and referred to the respective retailers for further investigation. Disciplinary action is taken where employees are found to have transgressed and corrective actions implemented where necessary to improve controls and prevent a recurrence of the incident.
An Ethical Culture Assessment was undertaken during the 2018 financial year by The Ethics Institute (TEI). Management have undertaken to implement the recommendations by the TEI to establish a comprehensive ethics management programme to create ethics awareness and talk and improve employee relations.
The committee is mandated to consider not only the impact the company’s performance has on shareholders, but also on it employees, society, the economy and the natural environment. Accordingly, during the financial year under review, the committee received feedback from management on the following matters:
- Broad-based black economic empowerment (BBBEE)
- Trade union activity
- Corporate social investment
- SPAR’s CDP submission
- Staff benefits for retail staff members
- SPAR’s rural hub
- Sustainability initiatives being undertaken by SPAR, such as packaging, nutrition, and wellness
- The Giannacopoulos group
Detailed feedback on a number of the above-mentioned matters can be found in our online report.
The committee has oversight of stakeholder engagement and monitors a stakeholder-inclusive model throughout SPAR. SPAR continues to:
- engage with suppliers to form strategic alignments where possible; and
- collaborate with Government in assisting to address various sustainable development issues.
In addition to the key focus areas above, the committee considered the sustainability content included in the online report and recommended it to the board for approval. The committee is required to report through one of its members to the company’s shareholders on the matters within its mandate at the company annual general meeting to be held on 11 February 2020. Any specific questions relating to the report may be sent to the Company Secretary at firstname.lastname@example.org prior to the meeting.
Thanks go to the members of the committee for their dedicated and constructive contributions to its functioning.
Chairperson of the Social and Ethics Committee
12 November 2019
|Revenue||109 477||101 018|
|Net cost of product and services||100 967||93 273|
|Value added||8 510||7 745|
|Income from investments and associates||175||158|
|Wealth created||8 685||7.90||100.0||7 903||7.80||100.0|
|Salaries, wages and other benefits||4 888||56.3||4 412||55.8|
|Providers of capital||1 692||19.5||1 687||21.4|
|Interest on borrowings||261||3.0||329||4.2|
|Dividends to ordinary shareholders||1 431||16.5||1 358||17.2|
|Replacement of assets||754||8.7||698||8.8|
|Retained in the group||733||8.4||469||5.9|
|Wealth distributed||8 685||100.0||7 903||100.0|
|*||Refer to restatement Note 9|