The Social and Ethics Committee report

The unprecedented COVID-19 pandemic has devastated economies and societies globally. South Africa has not been exempted from the resultant socio-economic effects and deaths of citizens.

The Social and Ethics Committee (The Committee) is a statutory Committee in terms of section 72(4) of the Companies Act, read in tandem with Regulation 43 of the Companies Regulations, 2011. It fulfilled its duties assigned to it in terms of its approved terms of reference. The Committee monitors the Group’s activities in relation to organisational ethics, responsible corporate citizenship, ESG, sustainable development and stakeholder relationships.

The Committee’s membership and meeting attendance is detailed in Key governance actions. Members of Group Exco and other senior employees are standing invitees.

Some of the year’s key focus areas are set out below, with cross-references to where more detailed information is included.

Organisational ethics

In support of King IV principle 1, which states that “the governing body should lead ethically and effectively”, the Committee considered and recommended the annual ethics leadership commitment statement for FY2021 to the Board for approval. This sets the “tone from the top” and demonstrates ethical behaviour and leadership in a tangible manner.

The Committee approved the development of an integrated ethics and cloud-based fraud rollout training plan. The training plan’s four modules were based on the Telkom Group ethics handbook and were designed to embed and enhance an ethical culture. The plan promoted and encouraged ethical behaviour and decision-making. Refer to Combined assurance.

Good corporate citizenship

TGF reports assist the Committee in monitoring the execution of its mandate to reduce corruption and mitigate against potentially fraudulent activities. The focus was largely on proactive initiatives through fraud awareness and early fraud detection initiatives to address identified trends. These initiatives included increasing the whistle-blowing touchpoints to make it easier for internal and external stakeholders to report economic crimes. Refer to Maintaining our business integrity .

Telkom Foundation’s programmes during COVID-19 focused on pressing educational inequality challenges, for example, the need to reconfigure the schooling system towards new ways of learning through online initiatives. Refer to Social and relationship capital. The Department of Basic Education and Telkom worked collaboratively towards addressing priority areas geared at the reconfiguration of schools into the future. The Digital Skills programme conducted a study developed in collaboration with the Department of Health to enhance online learning for learners and educators.

FutureMakers’ strategic objectives included launching the Township Innovation Incubator to use social entrepreneurship to drive technology solutions in townships through innovation, prototyping and business case development for solving community problems. Refer to Social and relationship capital.

As a result of losing government’s facilitator status under ownership, the Group’s B-BBEE certification status for Telkom moved to level 3, and BCX moved to level 2. Telkom continues to try and understand the regulatory landscape so that it can comply and effectively execute the regulatory requirements. Refer to Social and relationship capital.

The Group conducted an HR survey in FY2021, which highlighted the psychological challenge of employees battling to find a balance between working from home and still caring for their families. In adapting to the “new normal” brought about by the COVID-19 disruption of the traditional work environment, the Group transitioned well to meet organisational and customer needs and demands. It developed a remote work framework aimed at assisting employees to transition to this new way of working to ensure organisational and customer objectives were managed, while gradually adopting a culture of self-directed teams and outcomes-based performance. Refer to Human capital.

The Committee monitors mental and physical health and safety within the Group through its activities. Management reported a continuous positive trend in lost-time injury frequency rates and total recordable injury rates, and had zero contractor fatalities. It sadly registered an employee operational fatality in February 2021 after 804 days of zero employee fatalities. The health and safety division developed and implemented administrative controls for COVID-19, and further provided content for COVID-19 awareness in conjunction with the Group Emergency Management Team. Refer to Human capital.

ESG

Telkom is on a journey to enhance its ESG disclosures as requested by key stakeholders (set out in Reporting boundary and approval). The key focus areas this year included more enhanced disclosures against Telkom’s key SDGs. These disclosures are summarised here Telkom’s contribution to the United Nations SDGs.

In addition, Telkom adopted the TCFD framework. The Committee will be responsible for monitoring and oversight in relation to TCFD activities, while the Risk Committee will be responsible for monitoring and assessing TCFD-related risks. Telkom has included certain disclosures relating to governance, risk and strategy in this report and will develop related metrics and targets over a
two-year period. Refer to the TCFD disclosures on risk (Enterprise risk management and compliance), strategy (Our strategy review) and governance (Natural capital).

In closing

The Committee remains committed to fulfilling its mandate as required in terms of the Companies Act and its Regulations, but also in ensuring that Telkom maintains its responsible corporate citizenry status. We acknowledge the contributions of the late Dolly Mokgatle to the Committee and express our condolences to her family.

Kholeka Mzondeki
Chairperson
Social and Ethics Committee