Stakeholder engagement

The focus on stakeholder management has sharpened as the difficult prevailing economic conditions have highlighted the importance of stakeholder inclusivity and responsiveness in achieving strategic objectives.

As stated in the 2012 Integrated Report, we have embarked on a process to bolster our stakeholder engagements and processes. Feedback received on last year’s stakeholder engagement section revealed a need for greater clarity around the value-add of stakeholder engagements and how it facilitates the achievement of strategic objectives.

Further areas of improvement as per the 2012 audit findings suggested that responses to stakeholder issues and concerns should be tracked, measured and reviewed at least every quarter and that the mitigating actions are continually assessed. A further recommendation to ensure greater robustness was to review the process followed by stakeholder owners to identify their stakeholders’ issues.

A fully functional stakeholder management working group was introduced in 2013 and will be responsible for driving and monitoring our responsiveness to stakeholder issues and ensuring continuous assessment of the effectiveness of our responses to stakeholder issues.

Telkom is in the process of implementing an automated centralised stakeholder issues database that will enable a common view of material issues across the organisation, ease of monitoring and evaluation as well as reporting on stakeholder issues to various structures.

Improvements to stakeholder management reporting over the last financial year include linking a stakeholder material issue to specific interventions and the separation of customer material issues so that each customer segment and the respective material issues are dealt with individually.

The 2013 financial year saw an exodus of Telkom board members when government exercised its rights as majority shareholder to elect a board that it believed could steer Telkom in the desired strategic direction. Immediate stability was brought about with the election of the new board members and chairman. Following the resignation of the GCEO, a new GCEO and chief operating officer were appointed on 1 April 2013. These appointments will further enable the achievement of top management’s strategic objectives.

Owing to the changes that occurred at board level during the reporting year, there were no material issues from the recently appointed Board, however, the board effectiveness report highlights the concerns for 2013.

STAKEHOLDER MANAGEMENT PROGRESS

Telkom has placed greater impetus on its approach to enterprise stakeholder management. The organisation has over the past few years focused on the alignment of its stakeholder relationships with its strategic objectives. Telkom has a dedicated unit that focuses strictly on stakeholder management and reports into the Social and Ethics Committee.

Below are the highlights of our stakeholder management journey for the 2013 financial year:

Telkom’s Stakeholder Management Policy, approved by the Board in 2009, was reviewed in the 2013 financial year. The outcome was an increase in the number of stakeholder groups from 11 to 13. ‘Government’ and ‘Regulators’ are now listed as separate stakeholder groups, previously grouped as ‘Authorities.’ ‘Partners’ were removed from under ‘Suppliers’ to become a stand-alone stakeholder.

Telkom’s Enterprise Stakeholder Management strategy, which we began implementing in 2011, was formally approved by the Board. The strategy provides the foundation on which the implementation of the Stakeholder Policy should be based and ensures better connection of business strategy to stakeholder issues.

During 2012, Exco approved the prioritisation of stakeholder groups which will assist us execute our strategy and business plan so that at all times we have a clear sense of those stakeholders driving the sustainability of the business without neglecting other key stakeholders.

Following Telkom’s participation the SRA pilot project, which yielded useful results on our strengths and weaknesses among our stakeholders, Exco approved the first phase of the SRA model for government stakeholders, with the other groups to follow. This will enable us to better respond to the concerns of these stakeholders.

The organisation has adopted an IoDSA-approved governance assessment instrument. This instrument allows Telkom to perform self-assessment with regard to King III compliance. We obtained AAA scores in each of the categories indicating that we fully apply or explain non-compliance to the King III principles in all the categories provided for in the assessment instrument.

MATERIAL ISSUES RAISED DURING THE 2013 FINANCIAL YEAR