|
|
|
|
| |
| |
|
|
 |
|
|
| |
|
| |
| |
| Financial Sector
Charter |
The stability and growth of
the financial services sector in South Africa
depends on the sector’s ability to offer
globally-competitive services, facilitate commerce
and direct investments into targeted sectors of
the economy. Furthermore, the sector must provide
access to savings, finance and protection to all
South Africans, particularly those who have been
previously disadvantaged. In light of government’s
Black Economic Empowerment (“BEE”)
objectives, the sector developed the Financial
Sector Charter, which was released in October
2003.
The Charter has set targets for various dates
in the future in respect of core components, which,
when weighted, make up the scorecard against which
financial institutions will be rated each year.
The Charter has, however, not yet been gazetted
due to the fact that in late-2004 and mid-2005
the Department of Trade and Industry issued for
comment various phases of its Codes of Good Practice
on Broad-based Black Economic Empowerment (“DTI
Codes”). The outcome is expected in late
2006. The underlying principles of the DTI Codes
largely match those of the Charter. The process
of recognising industry-specific differences and
of alignment is underway and this will clarify
certain points of detail.
In the meantime, we have had our BEE status as
at 31 December 2004 audited against Broad-based
Black Economic Empowerment criteria. This produced
an A-rating in October 2005 and an assessment
as what is called a ‘level four contributor
with unrestrained operational capacity’.
Although this provisional rating will be replaced
by Charter-based ratings, the exercise has helped
to measure progress, identify gaps and inform
our transformation strategy in addressing the
various aspects of BEE. We are committed to transformation
of our entire South African business, not just
quantitatively but also qualitatively in the spirit
of empowering the previously-disadvantaged and
thereby ensuring sustainability. The Financial
Sector Charter Council has, in the meantime, called
for self-assessments as at 31 December 2005. Our
report has been forwarded to the council.
Ownership and control: The
Charter’s 2010 target for Black ownership
is 25%, with a minimum of 10% as direct ownership.
At present, our South African business is owned
30% by the three entities each of which is majority-black-owned,
namely Shanduka Group with 16%, the Alexander
Forbes Community Trust with 5% and a Staff Trust
announced in late 2005 with 9%. As regards control,
we continue to work with Shanduka Group in achieving
the Charter’s targets for Black directors
and executives.
Human resource
development: the Charter has set minimum
targets for 2008 in respect of blacks and black
women at senior, middle and junior levels of management
and sets a target of 1,5% of payroll for skills
development of all black employees. Elsewhere
in this report, we have set out the position for
the year under review. We are essentially on track
as regards the junior and middle management levels.
Achieving the senior level represents a strategic
priority of the South African business, where
management has set key performance targets and
has further reviewed our recruitment, development,
retention and career-pathing programmes. We see
transformation as more than meeting targets and
we aim to involve blacks fully at all levels and
spheres of our business, as required by Sections
5.8 and 15.2.6 of the Charter. |
| |
| |
 |
| |
| |
| • |
Procurement and enterprise
development, where suppliers are now required
to provide evidence of their BEE status.
This process has included engagement with
suppliers on our transformation requirements
and this has contributed to transformation
elsewhere. On procurement, we are ahead
of the Charter’s target of 50% by
2008 and anticipate that as suppliers’
own BEE credentials increase, our performance
will be further enhanced. Our ‘adopta-
shop’ project which we managed and
partly financed has led to a pilot enterprise
development project, namely a comprehensive
equipment and skills upgrade of a Soweto-based
motor body repairer called Zombodze Panel
Beaters. The process involved an assessment
of barriers to entry and of the supplier’s
needs, using influence and seeking co-operation
of a number of organisations with whom our
claims management unit has dealings, and
finally their generous support. Through
monitoring progress, we may help develop
guidelines for the future. The Charter Council
continues to advocate support by established
businesses of BEE enterprises. The support
given by Investment Solutions to Umbono
is another example of our commitment to
ongoing enterprise development. |
| |
|
| • |
Empowerment financing,
where although we are not a financing institution,
we have vendor-financed the purchase in
2003/4 of a 30% stake in our South African
business by the Shanduka-led consortium,
which included the Alexander Forbes Community
Trust’s 5% stake. To promote targeted
investments by institutional investors,
our Asset Consulting division has developed
an index to measure performance of socially
responsible investment portfolios and has
held workshops for asset managers. The Charter
has also set targets for low-cost housing.
By applying the initiative and expertise
of our Health Management Solutions unit
and of their partners, we have played a
key role in the Home Loan Guarantee Company’s
facility whereby both lenders and borrowers
are protected from exposure to HIV/Aids-related
risks. This world- first arrangement has
a significant social outcome in that an
infected borrower is counselled and enters
an appropriate therapy programme. Through
his/her extended lifespan and productivity,
the borrower is not just able to work longer
and service his/her loan for longer, but
will be able to care for his/her children
through their formative years. As mentioned
above, we see the Charter as not a scorecard,
but as a guide to how financial and other
institutions can apply their expertise,
innovation and goodwill in working together
for the well-being of all South Africans. |
| |
|
| • |
Access to financial services
and consumer education, where, at present,
the Charter’s scorecard relates to
developing and distributing relevant financial
services for the LSM 1-5 sector. We have
been granted an exemption in respect of
the 31 December 2005 reporting. Nevertheless,
we have developed various insurance facilities
for emerging black businesses so as to assist
them to manage risk and engage in business
for which they may not otherwise have had
the capacity. On consumer education, the
Charter’s 2008 target spend is 0,2%
of post-tax profit. We currently exceed
this target, but will be reviewing the position
once clarity on the codes is achieved. |
| |
|
| • |
Corporate social investment,
where a target of 0,5% of post-tax operating
profit by 2008 has been set. The Alexander
Forbes Community Trust, which holds 5% of
Alexander Forbes South Africa, supports
various causes which are related to the
nature of our business, including education,
the aged, women empowerment, those affected
by HIV/Aids and the disabled. For the Charter’s
reporting period ending 31 December 2005,
we have exceeded this target on contributions
through the Trust, which amount excludes
various initiatives conducted at divisional
level and by employees. |
|
| |
| |
|
| |
|
|
|
|
| |
 |
|
|
| |
|
|
 |
| |
|
|
|
| |
|
