The Board approved the annual ethics leadership and employee commitment statement for FY2024, 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 to set the tone from the top and demonstrate ethical behaviour and leadership.
This annual Ethics Leadership Pledge is cascaded down to subsidiary level and adopted by the subsidiary boards. The ethics pledges are available at https://group.telkom.co.za/governance/governance.html.
Telkom developed a joint ethics and governance strategy to further embed the relationship between ethics and governance among stakeholders. The Board approved the strategy, which was implemented within the Group. Resultant enhancements in the ethics environment were already visible in FY2024.
The Group Ethics Office focused on regular ethics awareness initiatives, embedding a Group-wide ethical culture. With support from the business unit Ethics Champions, we conducted regular initiatives promoting ethical behaviour by employees and suppliers.
In March 2024, an independent supplier provided whistle‑blowing training to the Group Exco and business unit Executive Committees. Group Exco also received training in ethics and fraud detection.
An ISO 37002: 2021 Whistle‑blowing management systems – Guidelines gap analysis was conducted in FY2023. To close some of the identified gaps, we enhanced our whistle-blowing process and developed a whistle-blowing framework. We also updated and reviewed the Group Ethics Handbook for the protection of whistle‑blowers financially, legally and reputationally. As part of International Fraud Awareness Week, we ran four virtual training sessions for sales employees in November 2023.
The Group Ethics Handbook promotes and encourages ethical behaviour and decision‑making by employees, enabling Telkom to live its values and standards. We reviewed the handbook, revising the sections on gifts, conflicts of interest, and whistle‑blowing activities.
The Group Ethics
Office participated in
International Fraud
Awareness Week
(12 to 18 November 2023) under the
theme “Be a whistle‑blower.
Be a hero.
Be the face of
courage.”
The annual ethics compliance statistics demonstrated commitment to ethical conduct and doing what is right, especially when no one is watching. We achieved 99% compliance for FY2024, with declarations of interest compliance at 92% (FY2023: 93%).
We developed a process for dealing with ethical and reputational matters through the ethics reporting protocol, in cases where members of the public, employees or entities report alleged misconduct by Telkom or its suppliers. We also amended the whistle‑blowing section of the Group Ethics Handbook to address the matter.
Telkom’s share dealing policy is included in the Group Ethics Handbook but remains standalone 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, Group Company Secretary, company secretarial staff and all affected persons, and Group Prescribed Officers must obtain clearance from the Dealing Committee before trading. 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). The respective closed periods are communicated to affected Directors, persons and employees under the share dealing policy.
Telkom Group Forensics (TGF) and Telkom Physical Security (TPS) executed their respective work as per the ERM strategy plan 2022-2025, the fraud risk management plan, and the security risk management annual plan. At the heart of these plans is the importance of minimising the impact of fraud, corruption, theft and other economic crimes on the achievement of Telkom’s strategic objectives.
The forensic activities outlined in the fraud risk management plan are 78% proactive and 22% reactive. This is in line with the TGF objectives of preventing fraud before it happens. Forensic activities executed in FY2024 included:
On the reactive side, we addressed allegations that were directed from TGF, emanated from the hotline, or were reported as walk-ins. We secured evidence to substantiate most of the allegations reported. As per Telkom’s commitment to zero tolerance for fraud or irregular conduct, we applied consequence measures against implicated parties. We also improved internal controls to prevent reoccurrences.
TGF and TPS participate in various external forums geared at addressing economic crimes. These include the Communication Risk Information Centre, Southern African Fraud Prevention Service, Economic Sabotage of Critical Infrastructure Forum, and Non-Ferrous Metals Crime Combating Committee. As an example of the benefits of this participation, we influenced the introduction of a temporary ban on the sale of copper scrap metal, which was critical in combating theft and vandalism of critical Telkom infrastructure.
The Telkom hotline is independently managed and operates 24 hours a day. In FY2024, 1 067 incidents were reported via the hotline. The declining number of incidents reported indicates that our plans and processes are yielding results. This is supported by other success measures, including:
In addition, the confidence level of whistle‑blowers appears to be on the increase: 93% of our whistle‑blowers revealed their identities, 4% claimed partial anonymity, and only 3% claimed full anonymity. No incidents of whistle‑blower victimisation were reported to TGF.
The graph below shows the percentage split of incident types dealt with by TGF:
The top security matters dealt with by TPS are copper cable theft (24%), battery theft (49%), and optic fibre damage (27%). Overall, these three incident types have declined by 31% compared to FY2023.
The main focuses of our forensic activities were prevention and detection and the improvement of internal controls. Other than that, the following emanated from TGF and TPS efforts to combat economic crime: