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Social, ethics and transformation committee report

I am pleased, on behalf of the social, ethics and transformation committee (“the committee”), to present this report to shareholders for the financial year ended 30 September 2020, in accordance with the requirements of the Companies Act. This report is being delivered during what is definitively, the most uncertain of times with the outbreak of COVID-19. Life Healthcare, and the portfolio of businesses within its stable, is therefore operating in an unpredictable and complicated environment. In addition, we experienced a cyber-attack on our IT systems.

However, this unique environment also presented a distinct opportunity to observe the Company’s culture, and in doing so – develop a deep appreciation for its resilience and resolve. For the year under review, the committee therefore focused keenly on its role in supporting the Board and the business in general, to best understand how to navigate these difficult times.

Our ability to effectively respond to the pandemic and provide quality care to our patients in this time of crisis is largely due to the dedication and unwavering support of all our frontline employees. The Company wishes to acknowledge their invaluable contribution and to sincerely thank them.

Chairman: Social, Ethics and Transformation Committee

Audrey Mothupi

Composition of the Committee

The current constitution of the committee is as follows:

  • AM Mothupi (Chairman and independent non-executive director)
  • Prof M Jacobs (independent non-executive director)
  • J Netshitenzhe (independent non-executive director)
  • Dr MP Ngatane (independent non-executive director)
  • PG Wharton-Hood (Chief Executive Officer and executive director)

The following directors resigned as members of the committee, during the year under review:

  • PJ Golesworthy (independent non-executive director)
  • Dr SB Viranna (previous Chief Executive Officer and executive director)

Senior executives and functional heads attend meetings of the committee, as appropriate. All members of management who present on various matters are experts on each of the disciplines or areas falling within the mandate of the committee specified in regulation 43(5) of the Companies Act. The Chairman of the Board is a standing invitee. The committee met three times during the year under review, and the proceedings of each meeting were reported to the Board.

The mandate of the committee is contained in formal terms of reference, which guides the committee in performing its oversight role to ensure that the Group, as a responsible corporate citizen, conducts business in an ethical, transparent and sustainable manner.

Responsibilities

The Group continues to strive to deliver value to all our stakeholders as a responsible and caring corporate citizen in line with our core values of providing quality and effective healthcare to our patients. The committee has a statutory responsibility to monitor the Group's activities in terms of the Companies Act with regard to matters relating to:

  • ethics and business integrity
  • social and economic development
  • good corporate citizenship
  • environment, health, patient and public safety
  • consumer relationships and
  • labour and employment practices.

The committee continues to execute on its responsibility to draw matters within its mandate to the attention of the Board and to shareholders, when necessary.

Functioning

The committee oversees the Group's social and organisational activities relating to the environment and its stakeholders. It monitors the Group's sustainability performance to ensure that the organisation's business integrity framework supports its culture, it is seen as a responsible corporate citizen, and that there is a balance between the Group and the accompanying needs, interests and expectations of all its stakeholders.

The committee, together with the clinical committee of the Board, also pays credence to the ethical standards adopted by the Company in ensuring and promoting moral and social values such as patients' welfare and safety, patients' privacy, clinical quality and compliance with relevant legislation.

During the financial year ended 30 September 2020, the committee addressed the following key issues:

  • Oversight of the final stage of the group-wide implementation plan of the Group's global code of conduct, which requires all employees and others to be treated with fairness, equality and respect to foster an open, transparent, progressive and trusting environment that is free from prejudice, discrimination and harassment
  • The environment, health and public safety and compliance to relevant legislation
  • Focus on the recently enacted POPIA legislation, and the impact on the Group
  • Performance with regard to the B-BBEE scorecard, procurement and enterprise development, and effective and ethical leadership
  • Skills and other development programmes aimed at employees' education
  • Labour and employment practices and policies
  • Corporate social initiatives, including the Company's role during the pandemic
  • Consumer relationships and reputation management, including the Group's advertising, public relations and compliance with consumer protection laws.

Corporate Social Responsibility and Employee
Assistance during COVID-19
During the COVID-19 period, we provided 770 employees, who could not isolate or quarantine at home with Company funded accommodation. Additionally, the Employee Assistance Fund paid out R5.8 million in support of 1 435 employees during these unprecedented times. The Company also paid out a gratuity bonus totalling R45 million to 14 947 employees. We donated R1.5 million towards a food relief project that provided approximately 4 000 food parcels to communities across Gauteng, the Western Cape, Eastern Cape, North-West, Mpumalanga, Limpopo, KwaZulu-Natal and the Free State. Each food parcel feeds a family of four for one month. We additionally donated approximately 2 000 cloth masks for students and employees at the SANCB Optima College, and 750 cloth masks to the volunteer employees at SA Depression and Anxiety Group – an NGO with a focus on mental health. We also provided funding to families for the funerals of employees who tragically lost their lives as a result of COVID-19.

Stakeholder engagement

The outbreak of COVID-19 highlighted the importance of engagements between the public and private sectors in South Africa. Guided by our belief that healthcare providers have an obligation to partner with government, especially during times of unprecedented crisis, we were ready to assist the South African government in various ways to treat public sector patients in our facilities. During the pandemic, the Group also engaged with the various governments and regulators in the other countries in which we operate, to ensure that Life Healthcare contributed, where it could, to a collective effort in fighting the pandemic. We believe that a sustainable social compact was created during these unprecedented times, which provides hope for a future of sustained economic recovery, post-COVID-19.

Diversity and inclusion

Diversity and inclusion remain key drivers of our transformation journey and are, we believe, integral to building a workforce that reflects our commitment to equal employment opportunities regardless of race, gender, age, disability, political belief or activity, religion, or sexual preference, and reflects the demographics of the countries in which we operate. As a Group, we continue to support strategies, with racial and gender parity remaining a key focus across the Group.

Broad-Based Black Economic Empowerment (B-BBEE)

The Group has retained a level 4 B-BBEE contributor in 2020, based on the measurement criteria contained in the B-BBEE Codes of Practice. The independent verification process was completed during September 2020.

Conclusion

The committee was pleased to note that the Group retained its position as a constituent of the FTSE/JSE Responsible Index based on the FTSE environmental, social and governance (ESG) rating. This achievement reinforces the committee's view that ESG responsibilities are imperative to the Group. Based on its monitoring activities for the year, no substantive non-compliance with legislation and regulations relevant to the committee's mandate was raised.

The committee remains cognisant of the fact that our material matters are those issues that could affect the economic, environment and social value we create for our stakeholders. With this in mind, the committee continued to play a key role in assisting with the strategic management of our material matters, to ensure sustainable value in the short, medium and long term.

The committee is satisfied that it has discharged its responsibilities in accordance with its mandate for the year ended 30 September 2020.

Audrey Mothupi

Chairman: Social, Ethics and Transformation Committee