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Embedding an ethical culture |
The Board approved the annual ethics leadership and employee commitment statement for FY2023 focusing on the commitment to gender and age diversity. The Chairperson of the Board and the GCEO signed the statement on behalf of the Board and management. This sets the tone from the top and demonstrates ethical behaviour and leadership tangibly.
The Group Company Secretariat developed a joint ethics and governance strategy to further embed the relationship between ethics and governance to our stakeholders which was approved by the Board.
An ethics survey was conducted for employees and service providers. In response to the negative findings from the ethics survey, the planned ethics, governance and fraud-related initiatives are the following:
To further embed ethical conduct, a Group supplier ethics and fraud survey was conducted to assess the knowledge of suppliers around the Supplier Code of Conduct and their awareness of the whistle-blowing procedure in preparation of Supplier Day.
The negative findings of the survey and the planned initiatives are discussed in the following table:
Group-wide supplier and employee blacklisting processes through the Supplier Compliance Council.
New suppliers’ due diligence to verify the following:
Telkom reviewed its share dealing policy due to the amendment in the JSE Listings Requirements. The policy is included in the Group Ethics Handbook, but also remains a standalone policy due to its critical role in promoting transparent disclosure requirements. This policy is informed mainly by the Financial Markets Act, 19 of 2012 and the JSE Listings Requirements. All Directors and Group Prescribed Officers must obtain clearance from the dealing Committee prior to trading and a SENS announcement must be released thereafter according to the provisions of the JSE Listings Requirements.
Directors and employees must adhere to the policy's provisions. We do not permit trading in the Company's securities during prohibited periods, which comprise price-sensitive periods and closed periods (financial and cautionary closed periods).
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Zero tolerance for fraud and |
As per the Group Ethics Handbook, Telkom has zero tolerance towards fraud, corruption, and irregular conduct. To that end, Telkom Group Forensics (TGF) investigates allegations of fraud and irregular conduct without regard to any employee's relationship with the business, stature, position or length of service.
TGF conducted its activities as per the ERM Strategy plan 2022- 2025 and the annual fraud risk management (FRM) plan. The FRM services offered by TGF includes ethics and fraud awareness and training, fraud prevention, fraud detection, and forensic investigations, advisory and remedial services.
At the core of TGF’s services is value-adding proactive forensic activities to mitigate fraud risk. Activities performed in FY2022 included the launch of the Vulumlomo – Speak Up whistleblowing campaign. Working with Group Communications, the Ethics Office and other assurance providers in the combined assurance awareness forum (CAAF), we conducted 75 awareness campaigns or engagements with customers/members of the public, employees and suppliers and their employees. This is an average of 6.25 engagements per month. The engagements were made through online internal articles, face-to-face, video messages, social media, webinars or panel discussions, media articles, radio interviews, and other initiatives like surveys, phone bill inserts and lock screens.
These initiatives, specifically the Vulumlomo - Speak Up whistle- blowing campaign, led to 2 049 incidents being reported to the Tip-Offs Anonymous Hotline. These were mainly directed to physical security, network protection services, credit management fraud and TGF. This represented a 70% increase in the number of reports to the hotline compared to FY2021.
We made it easy for incidents to be reported by increasing the whistle-blowing reporting channels from two to six. These channels are email, telephone, intranet, website, WhatsApp and a post-box. Apart from the hotline, incidents are also reported to TGF through walk-ins, that is, direct internal escalation to forensics. Several of these hotline and walk-in incidents were converted into cases that were fully investigated. The increase in the number of reported incidents, led to the 25% increase in the number of investigations conducted by TGF in FY2022, compared to FY2021.
TGF performed an ISO 37001 anti-bribery management system gap analysis to align with the ISO 37001 standards or best practice. TGF worked with management to mitigate the identified gaps.
As part of CAAF we conducted employee surveys, supplier surveys, and the Supplier Day awareness to obtain their views on issues regarding whistle-blowing and other related issues. Telkom's key message was "whistle-blowing without fear". We dealt with the concerns raised by employees and suppliers regarding fears of victimisation and lack of trust in the anonymity of the hotline. This led to improvement in the number of reported incidents by suppliers.
We are pleased that no incidents of whistle-blower victimisation were reported. On average, 88% of our whistle-blowers preferred to be known, 6% claimed partial anonymity, and only 6% claimed full anonymity.
Other than forensic investigations triggered by reported incidents, we conducted proactive measures like fraud detection reviews, fraud risk assessments, and fraud data analytics exception reporting. The outcomes of these forensic assignments led to an improvement in internal controls, corrective action against employees, third-party employees and suppliers, recovery of fraud loss, opening of criminal cases, and provision of litigation support.
The pie chart below shows the percentage split of various incident types that TGF dealt with.
The following actions emanated from the forensic assignments conducted:
At the end of FY2022, three employees were due to be disciplined based on the outcomes of forensic investigations.
We reported suspected criminal acts to the police. Several internal and external people were implicated in criminal cases that were opened. Where warranted, implicated parties were arrested. These cases are in various stages of the criminal justice system, and some were convicted and sentenced based on the criminal cases that were opened in prior financial years. Where Telkom suffered fraud losses, we used appropriate legal remedies to recover the losses from the responsible parties.