|Ms BLM Makgabo-Fiskerstrand
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|Mr PL Campher
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|Mr MV Moosa
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|Mr GR Rosenthal
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|Independent non-executive director||Independent non-executive director||Non-executive director||Independent non-executive director|
|Meeting attendance: 3/4||Meeting attendance: 4/4||Meeting attendance: 4/4||Meeting attendance: 4/4|
The main purpose of the social and ethics committee (“the committee”) is to assist the board in ensuring that the Group is, and remains a responsible corporate citizen by overseeing the sustainability development performance of the Group.
The committee was constituted as a statutory committee in 2011 in accordance with regulations of the Companies Act and to assist the board in ensuring that the Group remains a responsible corporate citizen. This is the fourth year of the committee’s existence and our processes and reviews have evolved over this period, ensuring that material matters are canvassed by the committee within clearly defined parameters. The committee also performs the requisite statutory functions on behalf of all Group subsidiaries and reports to these subsidiary boards in terms of the execution of its statutory mandate. This ensures that the committee’s decisions are implemented across the Group with overall accountability at board level. In addition, the committee reports to companies within the Group that are not defined as subsidiaries in terms of the regulations.
In addition to the members of the committee reflected above, executive management are standing invitees to the committee and are represented by the Chief Executive, Chief Financial Officer, Director: Corporate Services and Legal, Director: Legal Affairs, Director: Group Human Resources, Director: Group Internal Audit, the Group SED manager and the Group environmental manager. These invitees represent business areas that fall within the remit of the committee’s review and these attendees provide the committee with regular reports and input into the Group’s social standing and progress on matters within their expertise.
The committee chairperson reports to the board following each committee meeting and to shareholders at the Company’s annual general meeting on matters in accordance with the committee’s approved terms of reference. In fulfilling its mandate and with a view to building the Group’s corporate reputation, the committee met on four separate occasions during the year under review and to date of this report to consider the Group’s activities having regard to relevant legislation and prevailing codes of best practice in respect of matters relating to: social and economic development; responsible corporate citizenship; the environment; health and public safety; consumer relationships; and labour and employment. These matters are canvassed more fully in the remainder of this report.
The committee has reviewed the Group’s standing and progress in accordance with the goals and purposes of the 10 principles set out in the United Nations Global Compact Principles (“UNGC Principles”) and the Organisation for Economic Co-operation and Development guidelines for multinational enterprises 2011 regarding corruption. The committee concluded that the Group either complied with or exceeded the requirements of the UNGC Principles, and that there were no material areas of concern raised with the committee. An analysis of the Group’s standing with reference to the UNGC Principles has been provided for stakeholders who wish to review the Group’s standing in further detail.
The Group has elected this year to join the global membership of the UN Global Compact as we believe that together with like-minded organisations, we can continue to make lasting positive impacts in society. Our public commitment to the UN Global Compact is reflective of the Group’s commitment to social development.
The Group’s anti-corruption policy continues to be applied across jurisdictions and reflects the Group’s zero-tolerance for any type or form of corruption. There have been no material infringements of this policy reported to the committee in the year under review. The contents of this policy are a mandatory part of the Group’s induction program for all new employees and refresher training on the policy is made available to all existing employees.
The Group remains committed to the advancement of matters relating to broad-based black economic empowerment (“B-BBEE”) and continues to make advancement in most areas. The Group is cognisant of the amended B-BBEE legislation and the potential impact of the same on the Group. Management are proactively addressing these changes to ensure its state of readiness and the committee is monitoring such progress against the current B-BBEE Act, 53 of 2003 and the Employment Equity Act, 55 of 1998. In this regard, the committee regularly reviews the relevant reports noting areas of improvement. The committee has requested that management target certain improvements in employment equity within the Group for the forthcoming year, as the Group emerges from a Section 189A restructuring process. Management has submitted an annual employment equity plan to the Department of Labour on the understanding that its longer term employment equity plan will be submitted after finalisation of the Section 189A process.
The Group also re-established its central B-BBEE committee which is comprised of stream leaders from each of the pillars underpinning the B-BBEE Act with a focus to refine and in certain instances redevelop the Group’s approach based on the amended B-BBEE requirements. The Chairman of the B-BBEE committee reports to the committee at each meeting on progress made by the B-BBEE committee and on management’s initiatives to address the various B-BBEE pillars. The Group has made good progress on each of the pillars and there has been significant effort placed on improving the spectres of procurement, supplier development and enterprise development. The committee has reviewed the Group’s enterprise development initiatives which are contributing to the development of sustainable businesses and a Group enterprise development strategy is in the process of being finalised.
The committee is satisfied that the Group’s B-BBEE rating as verified by Empowerdex, an external accredited verification agency, has been maintained at Level 2 contributor status.
Further to the Group’s commitment to the promotion of equality, the prevention of unfair discrimination and zero tolerance approach to corruption, the committee has reviewed the Group’s policies, processes and undertakings to ensure that these matters are sufficiently monitored and addressed throughout the year. Good corporate citizenship is fundamental to the Group’s licence to operate.
In the year under review, the committee monitored the Group’s substantial initiatives and contributions towards the development of communities in which its activities are predominantly conducted or marketed. Group Internal Audit (“GIA”) verified the record of sponsorship, donations and charitable giving across the Group and submits an annual report to the committee for review.
A revised Group socioeconomic development strategy and implementation plan was presented to the committee led by the Group’s newly appointed SED manager which highlighted a fundamental change in shifting the group from a traditional corporate social investment philosophy to one that adopts the principles of Creating Shared Value. These principles effectively address both business needs and societal ails with the aim of creating shared value for all participants. The committee will be monitoring the evolution in thinking as the Group’s SED initiatives are fundamental to making the difference that our communities need. It remains imperative that the Group creates sustainable economic benefit for these communities.
The Group remains firmly committed, as it has since inception, to the National Responsible Gambling Programme (“NRGP”), which remains well regarded globally as a leading programme to promote responsible gaming. The NRGP publishes a quarterly report to create awareness of the public initiatives undertaken in the industry which include, amongst others, public awareness training and prevention, treatment and counselling, training and interventions for regulators and industry employees, research audits and life-skills programmes for schools. In addition, management reports to each of the subsidiary boards as well as to the committee on its own focused efforts in leveraging the NRGP principles across all of its casino properties. Management reports on matters such as crèche utilisation rates which remain strictly monitored at all properties, as well as on the training of all staff in terms of the different stages of NRGP training. These practices are audited at each property by GIA, which further reports on such audits to both this committee as well as the Group’s audit committee.
The Group’s environmental manager reports on the Group’s progress on all environmental and related sustainability matters. During the year under review, the key focus areas were established in the Group’s sustainability strategy which includes, inter alia, the Group’s strategy on climate change. This has been a key issue for the Group and its efforts in ensuring that it is addressing climate change matters at its operations and we are pleased with the progress to date. A focus in the year ahead will include a focus on improving the Group’s waste management across all properties to ensure consistency in the approach to effectively managing waste.
The Group remains committed to the finalisation in roll-out of an ISO14001 environmental management system, embedding the Group’s climate change strategy together with carbon foot-printing and disclosure, participation in the Carbon Disclosure Project through the submission of a carbon and water disclosure and reinforcing the Group’s sustainability partnerships.
The Group has also partnered this year with the National Business Initiative (“NBI”) (the NBI assists with the activities of the United Nations Global Compact Local Network in South Africa) and participated in the NBI’s PSE (Energy programme), which affirmed the Group’s environmental commitment, and the UN Global Compact which brought with it international best governance practices and recognition thereof on a global platform.
Health and safety audits are conducted throughout the Group by GIA as the safety of our employees and guests remain a key focus. Whilst each property has a health and safety officer, a Group health and safety officer will be appointed shortly to ensure coordinated efforts and compliance across the Group.
The committee reviews the Group’s stakeholder engagement with regard to all stakeholder and guest relationships. Extensive work is undertaken throughout the Group under the direction of the Group’s legal department to ensure awareness of and compliance with the provisions of the Consumer Protection Act, No 68 of 2008. Any instances of potential non-compliance are reported to the committee and there have been no new consumer complaints lodged against the Group in the year under review.
Management reports on the Group’s standing in terms of the International Labour Organisation’s protocol on decent work and working conditions. During the year under review, emphasis has been placed on the fair and proper implementation of the Section 189A restructure process across our South African operations. The impact on our employees was and is being felt across affected and non-affected staff. The committee received regular feedback from management on the process and status of this process with specific focus on the interactions between the various stakeholders involved in the process.
The committee is of the opinion that the S189A process, whilst difficult, has been conducted fairly and with due respect to the rights of our employees and unions. Management have been tasked to focus on the rebuilding of the Sun International culture in the year ahead, as the Group emerges from a tough but necessary process to ensure the long term sustainability of the Group. Indeed, many such initiatives would have commenced by the time our stakeholders receive this report and includes efforts such as selecting and inculcating new values that will lead Sun International forward as well as the executive leadership roadshows at each of the Group’s properties.
Overall, the committee is satisfied that there were no significant areas of risk with regard to the matters to be addressed by the committee in terms of statute and the provisions of its terms of reference other than set out in this report.
Furthermore, the Group is pleased to report that there have been no material instances of non-compliance during the year under review. Accordingly, the committee is comfortable that the Group operated in the year under review as a socially responsible corporate citizen demonstrating an ongoing commitment to sustainable development.
Corporate citizenry forms part of each employee’s performance contract as the fifth pillar of the Group’s strategy, “Governance & Sustainability”. At management level these objectives have a direct link to remuneration.
In the year ahead, management have received a clear mandate from this committee in terms of areas of focus and improvement. Responsible corporate citizenship whilst inherent in our business practices and in management’s enduring commitment to create value for all its stakeholders, will remain a principle that we build on each and every day.
Sun International Limited social and ethics committee
16 October 2014