Page 98 - Capricorn IAR 2020

REMUNERATION REPORT BOARD SUSTAINABILITY GLOSSARY OF TERMS AND ETHICS REPORT
BOARD SUSTAINABILITY AND ETHICS REPORT
Capricorn Group is dedicated to enhancing and sustaining ethical business practices through leadership commitment to ethical business conduct and by institutionalising ethical behaviour.
Purpose and mandate
The Group BSEC is the custodian of ESG matters that relate, inter alia, to the Group’s sustainability, stakeholder relationships, corporate citizenship and ethical standing. The committee provides oversight and monitors a range of aspects within the ambit of this role.
The committee’s members, responsibilities and key focus areas are set out in the corporate governance report on from page 55.
In addition to the non-executive directors serving as members of the committee, we engaged a specialist adviser in sustainability to attend the BSEC meetings and provide input. The role contributes to the following:
• The provision of an external, independent, and unbiased perspective on the content of BSEC meetings
• Insight on potential gaps and risks
• Advice on key focus areas for management consideration
• Advice on the strategic approach for the integration of
sustainability into corporate strategy
• Guidance on disclosure standards on ethics, sustainability
and CSR
Milestones for 2020
• Registration of the Capricorn Foundation as a non-profit association incorporated under Section 21 of the Companies Act of Namibia
• Oversight of the implementation of the ethics strategy and ethics reporting
• Subsidiary-driven sustainability initiatives and reporting
Committee matters overview
• As recommended by the BSEC, the Group board reviewed and adopted an enhanced Corporate Social Responsibility Policy. The main objective of the policy is to provide a framework for the management of CSR activities throughout the Group to ensure proper administration of funding, and to put CSR funding to optimal use. The Group regards CSR as a component within the broader theme of sustainability.
• The Group revamped the Ethics Policy to include the protection of anonymity for whistleblowers. The board approved the revised Ethics Policy on 16 June 2020.
• The BSEC considered research done to establish the payment of legal minimum wages versus living wages by suppliers. Recommendations to address this were discussed, submitted to the Bank Windhoek executive management team and outcomes were tabled for BSEC approval. These salaries will be adjusted as part of the September 2020 annual increase. The board procurement committee also approved a contract increase to pay for the travel for cleaning employees from September 2020. Going forward, procurement will include the basic salary and benefits that outsourced employees should earn that work for third party suppliers contracted
to the Group.
• The BSEC reviewed key performance indicators related to
customers, procurement, society and the environment.
• The BSEC discussed stakeholder engagement reports and
forward-looking stakeholder engagement plans, with an emphasis on promoting collaboration between subsidiaries.
Ethical and effective leadership in
challenging times
The 2020 financial year will be remembered for three significant events that required oversight of intense stakeholder engagement and responsive leadership as part of the BSEC mandate. We provide detail on these events and outcomes to illustrate how the committee assists in creating value through its governance oversight role, while ensuring the Group remains true to its purpose.
Corruption in the fishing industry
In December 2019 a major corruption scandal was revealed in Namibia. A whistleblowing report led to an investigation into fishing licences that uncovered fraud and collusion between senior political and business figures and a range of other parties, including the Icelandic fishing conglomerate, Samherji. The exposé dealt with corrupt transactions that involved bank accounts at several Namibian banks.
The scandal created reputational risk for Bank Windhoek as one of the banks involved, and potential sanction by international anti-money laundering bodies. The Group was deeply concerned about the risk of the public losing trust in the financial system.
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