![Page 1: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/1.jpg)
FirstRand Limited
SSI 2013
Sizwe Nxasana
![Page 2: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/2.jpg)
Agenda
1. Structural Challenges
2. Corporate Governance
3. Business and Community Development
4. Partnership and Collaboration
5. Conclusion
![Page 3: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/3.jpg)
South Africa's structural challenges
SA is still one of the world’s most unequal middle income countries
one of the world’s highest gini coefficients
POVERTY
EDUCATION
UNEMPLOYMENT
Source: Development Indicators, SA Govt.
![Page 4: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/4.jpg)
South Africa's structural challenges
POVERTY
EDUCATION
UNEMPLOYMENT
• Unemployment rate in Q4 2012 was 24.9% (35.9% expanded)
• Approx 61% of job seekers do not have matric
• SA's labour force participation rate is 54.6%
• World average ~ 64.1%.
• Youth unemployment rate ~ 48%
• Brazil ~ 18%%
• Sub-Saharan Africa ~ 12%
• World average ~ 13%
• By 2015 more than half of the working age adults will still be
out of work
Source: StatsSA ; ILO
![Page 5: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/5.jpg)
South Africa's structural challenges
EDUCATION
UNEMPLOYMENT
POVERTY
The rate of unemployment is
worse in Free State, Mpumalanga and
Eastern Cape
Lower unemployment
rates associated with higher
levels of education
Source: Stats SA, Q1 2012 Survey
![Page 6: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/6.jpg)
South Africa's structural challenges
EDUCATION
UNEMPLOYMENT
Source : StatsSA
POVERTY
% CSI SpendGP 23.3%WC 11.4%EC 7.6%KZN 6.4%MP 4.2%NW 4.2%LP 4.1%FS 2.3%NC 2.0%National 34.6%
Source: JET
30 37 15
![Page 7: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/7.jpg)
South Africa's structural challenges
EDUCATION
UNEMPLOYMENT
• Adult literacy rate ~ 89%
• While 76% of whites over 20 years old and 62% of Indians have a high school or higher qualification, this figure is only 35% among blacks and 33% among the coloured population
• Student participation rate is almost 20% (proportion of 18- to 24-year olds in higher education• Whites 59%• Indians 46%• Coloureds 15%• Blacks 14%
Source : StatsSA
POVERTY
![Page 8: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/8.jpg)
Agenda
1. Structural Challenges
2. Corporate Governance
3. Business and Community Development
4. Partnership and Collaboration
5. Conclusion
![Page 9: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/9.jpg)
• Impact of the global financial meltdown
• Increased social isolation
• Civic alienation
• Flaw of “Everyman for himself” mindset exposed
• Image of business fraternity damaged
• Investors
• Customers
• Government
• General public
Future of Capitalism
• Desperate need for business community to
• Repair image
• Re-examine value system
• Give a “human face” to capitalism
![Page 10: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/10.jpg)
Significant shift in relationship between private enterprise and society
Financial Performance
Environmental Performance
Social Performance
Ethical imperative
towards investors only
![Page 11: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/11.jpg)
• New Companies Act 71 of 2008
• Came into force May 2011
• Approach sourced from King III Report on Corporate Governance
• Shift from ‘shareowner compact’ to ‘stakeholder compact’
• States that reputation is a company’s most significant asset
• Management and effective stakeholder engagement crucial
Proper governance and management focus on social and ethical matters
Financial Performance
Environmental Performance
Social Performance
Responsible business
conduct and good
corporate citizenship
• Company acting in a responsible and ethical manner leads to
• Good financial performance in long run
• Maintaining productive relationships with government and regulators
• Requirement to establish
• Social and Ethics Committee
• Social and Advisory Panel to assist committee
• Ensures proper governance and management focus on social and ethical matters
![Page 12: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/12.jpg)
Agenda
1. Structural Challenges
2. Corporate Governance
3. Business and Community Development
4. Partnership and Collaboration
5. Conclusion
![Page 13: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/13.jpg)
Why get involved in community development
Customer Employees
ShareholdersSociety
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others
Profit
People
Planet
![Page 14: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/14.jpg)
Why get involved in community development
• Meet customer needs
• Establish strong customer relationship
• Maintain strong consumer value
• SustainabilityCustomer Employees
ShareholdersSociety
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others
![Page 15: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/15.jpg)
Why get involved in community development
• Working conditions• Employee
engagement• Reciprocity
• Volunteerism
Customer Employees
ShareholdersSociety
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others
![Page 16: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/16.jpg)
Why get involved in community development
• Sustainability• Corporate
Citizenship• Brand image
Customer Employees
ShareholdersSociety
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others
![Page 17: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/17.jpg)
Why get involved in community development
• Accountability• CSI / Partnerships
• Private• NGOs• Government• Society
Customer Employees
ShareholdersSociety
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others
![Page 18: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/18.jpg)
Agenda
1. Structural Challenges
2. Corporate Governance
3. Business and Community Development
4. Partnership and Collaboration
5. Conclusion
![Page 19: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/19.jpg)
• Responding to national need to address structural challenges
• Taking advantage of the national plans and commitments by key stakeholders i.e. NDP Vision 2030• Fresh vision for SA future
• Useful beacons for guidance
• Active Citizenry
• Importance of stakeholder consensus and willingness to work together
Rationale for collaborationProfit
People
Planet
![Page 20: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/20.jpg)
• Working on increasing value for money• Increasing focus of interventions on priority areas
• Eliminate duplication of activities
• Increasing collaboration between non-governmental and government interventions
• Jobs fund
• Education spend
• Improving sustainability of the interventions
• Promoting integration between reform, transformation and improvement initiatives
• Capitalising on the gains of the past 18 years
• Addressing systemic challenges in the country
Rationale for collaborationProfit
People
Planet
![Page 21: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/21.jpg)
• Corporate-to-Corporate level
• Not much has happened
• CSI viewed as competitive
• Failure to distinguish between
• sponsorship to benefit business
• “right thing to do”
• Corporate-to-Government level
• Trust, a major factor
• Foundation to build trust
• Value importance of relationship
• Develop shared and common vision together
• Invest in relationship and nurture it
• Honesty is vital
• Differences must be understood
• Focus on commonalities
Partnership and Collaboration
Profit
People
Planet
![Page 22: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/22.jpg)
• Consultative manner
• Greater involvement from company
• More sustainable solutions for beneficiaries
• Need to talk and listen to communities
• Understand intricacies of initiatives
• Design solutions for the communities
• Avoid imposing company/NGO-created solutions
• Takes more time to set up, implement and follow through
• Benefits of approach
• Ensures beneficiaries receive most suitable and sustainable benefits
• Easier to gain deeper understanding of involvement areas
• Focus through fewer areas of specialisation
Partnership with Communities
Profit
People
Planet
![Page 23: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/23.jpg)
Agenda
1. Structural Challenges
2. Corporate Governance
3. Business and Community Development
4. Partnership and Collaboration
5. Conclusion
![Page 24: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/24.jpg)
• Perception of CSI
• Hard-earned reputation for flakiness
• Today’s leadership has evolved past this perception
• Difficulty linking to concrete tangible outcome
• Measurement is key
• Measure to understand
• Understand to control / monitor
• Control / monitor to improve
• Impact of CSI
• Social value is inseparable from its business value
• Business value of initiatives need to be rigorously quantified
• Partnership and collaboration on initiatives
• Collaboration framework
Conclusion
![Page 25: Impact matters - Serious Social Investing 2013](https://reader035.vdocuments.us/reader035/viewer/2022062706/557dc956d8b42a8a4e8b5214/html5/thumbnails/25.jpg)
FirstRand Limited
SSI 2013
Sizwe Nxasana