Telkom Integrated Annual Report 2020

The social and ethics committee report

The committee focused on ethics, corporate citizenship, the SDGs, the Consumer Protection Act and other ESG matters.

Telkom response to COVID-19

The group, through the committee, considered the risk of the COVID-19 outbreak within South Africa. As the spread of the pandemic increased, the board considered a range of interventions, among others, the risk of customer-facing employees, low productivity, high absenteeism and the psychological impact on employees.

As of 15 March 2020, Telkom had over 80% of its employees working remotely. The impact on the group's financial sustainability, supply chain, business operations where the "work-from-home" arrangement has become the new normal, is encouraged by leadership. Telkom continues to contribute toward the accelerated agile and flexible online learning platform to ameliorate learning backlogs, drive personalised learning and support future skills. Refer to Group Chief Executive Officer’s report for more insight into the COVID-19 response.

Strengthening the committee

We strengthened the committee by appointing three additional non-executive directors on 11 July 2019. The new members attended induction to enhance their respective understanding of the committee's mandate, and to enable them to immediately contribute meaningfully.

The induction focused on the statutory and regulatory mandate of the committee, ethical conduct and leadership, customer service, group forensics, corporate social investment, sponsorships, sustainability reporting and stakeholder management.

The committee's mandate and members are set out on social and ethics committee. The chairperson of the risk committee is a member of this committee to ensure matters raised as an ethical risk, are also brought to the attention of the risk committee. Members of group exco and other senior managers are standing invitees to this committee.

Organisational ethics

We reviewed and recommended the group ethics handbook to the board for approval. The objective with creating this integrated ethics management strategy is to enhance the governance of ethics and contribute to Telkom's value creation by all employees living the Telkom values. The group ethics handbook rollout and the ethics leadership pledge coincided with the international fraud awareness week. For more information, refer to ensuring business integrity.

The business objectives behind these initiatives were to motivate employees to operate in an ethical, safe and compliant manner to decrease incidents of misconduct and irregularity. The committee was taken through the various planned initiatives. This included, among others, print and digital materials on ethics and fraud-related policies, workshops for exco and subsidiary governance structures, etc. The ultimate outcome of these initiatives will drive change in employee behaviour and promote and build an ethical culture.

The planned ethics maturity assessment and revised strategy was deferred due to operational requirements and budgetary constraints. Telkom is planning to conduct an ethics risk assessment in FY2021 while assessing the current ethics landscape and ethics maturity of the group. Thereafter, targeted interventions and initiatives will be formulated to bridge any gaps, aligned to best practice.

Ethical conduct is the underlying principle of the committee's mandate and, through its monitoring of these activities, the committee ensured adherence thereto.

Good corporate citizenship

The reports from TGF assists the committee in monitoring the activities to reduce corruption and mitigate against potentially fraudulent activities. We focused on conflict of interests matters. After consultation with business unit leadership, there was an improved awareness around the identification of potential, perceived and actual conflicts of interest.

TGF continues to co-ordinate the fight against economic crimes through the economic crimes forum, as well as the co-operation with internal assurance providers as well as external industry crime fighting bodies. The outcome of these initiatives, among others, led to action being taken against service providers, employees, customers, and syndicates. Some of these actions include contract terminations, dismissals, recovery of losses and arrests of those implicated.

We monitored these initiatives to ensure the fight against corruption is prevented, detected and investigated.

The execution of the Telkom Foundation's strategy was tabled at each meeting to confirm compliance to the statutory responsibility of donations and charitable activities. We aim to ensure a meaningful impact is made in society, specifically the educational sphere, to contribute to the future skills demand around ICT skills. Refer to Telkom Foundation for more insight into the Foundation.

Sustainable Development Goals

Telkom is committed to playing our role to support the UN SDGs long-term agenda to end poverty, protect the planet and ensure prosperity for all in the lead up to 2030.

The following four SDGs and selected underlying targets present the most material opportunities for Telkom to enhance its positive impacts (SDG 4, SDG 8 and SDG 9) and decrease its negative impacts (SDG 12) in support of the SDGs.

Environment, social and governance

The committee, through its activities, monitors safety within the group. There was a notable improvement of the reportable safety incidents with a reduction of 36% in the total record of injuries, and 37% reduction in lost-time injuries. There were zero fatalities and zero incidents of post-traumatic stress disorder incidents. These were attributed to interventions such as implementation of the early injury management and injury on duty management processes.

Skills development is extensively discussed at each meeting to ensure measures are implemented to improve on this pillar of the B-BBEE scorecard. Telkom continues with the process aimed at developing a shared value strategy to deliver value to society through its business operations, over and above the legislative and compliance requirements.

Commitment

The committee remains committed in fulfilling its mandate as required in terms of the Companies Act and Companies Regulations, and in ensuring that Telkom maintains its responsible corporate citizenry.

Khanyisile Kweyama

Chairperson
Social and ethics committee

Also refer to

• Human capital
• Social and relationship capital
• Natural capital