sizwe nxasana - making csi matter

The Role of Business in DevelopmentDevelopment

Making CSI Matter Trialogue Conference 2012Trialogue Conference 2012

Sizwe Nxasana

May 2012

Agenda

1. Structural Challenges

2. Why Corporates must get involved in development and CSI

3. Partnership and Collaboration

4. Volunteerism

South Africa's structural challengesg

SA is the world’s most unequal middle income country and the trend is increasing

POVERTY

UNEMPLOYMENT

EDUCATION

DEPENDENCE ON GRANTSGRANTS

2000 – 2011 average

Source: UNDP HDR REPORT 2011

one of the world’s highest gini coefficients

Source: UNDP HDR REPORT 2011


POVERTY • Total number of unemployed is currently around

4.5 m people

UNEMPLOYMENT• Women are 1.2 times more likely to be

unemployed than men

EDUCATION• SA's labour force participation rate is 54.7%

compared with a world average of 64.1%.

DEPENDENCE ON GRANTS

p g

• Youth unemployment rate is 35.9% compared

with a world average of 12 6%GRANTS with a world average of 12.6%

• Only 1.2 million South Africans are self-

employedemployed

• By 2015 more than half of the working age

d lt ill till b t f kadults will still be out of work


%POVERTY % Lower unemployment

rates associated

UNEMPLOYMENTwith higher

levels of education

EDUCATION

DEPENDENCE ON GRANTSGRANTS

The rate of unemployment is

worse in Free StateState,

Mpumalanga and Eastern Cape

Source: Stats SA, Q1 2012 Survey


• Illiteracy rates currently stand at around 18% of adults over 15 years old (about 9-million adults are not functionally literate

POVERTY

UNEMPLOYMENT

not functionally literate

• While 65% of whites over 20 years old and 40% of Indians have a high school or higher qualification

EDUCATION

Indians have a high school or higher qualification, this figure is only 14% among blacks and 17% among the coloured population


• 1 out of 3 matriculants are unemployed

GRANTS • Student participation rate is almost 20% (proportion of 18- to 24-year olds in higher education• Whites 57%Whites 57%• Indians 45%• Blacks 13.3%• Coloureds 14 8%• Coloureds 14.8%

Source : StatsSA


Growth in grants is acceleratingPOVERTY

UNEMPLOYMENT• Spending on social grants projected to reach R122bn in

FY2014/2015 – 3.2% of GDP

EDUCATION • 5.9 m tax payers are supporting 15.3 m people who get


grants – this is not sustainable

GRANTS• Recipients to reach 16.7 million in next three years

• No incentives to work – promoting a culture of

d ddependencySource : BUSA

Agenda




4. Volunteerism

Future of Capitalism• Impact of the global financial meltdown

p

• Increased social isolation

• Civic alienation

• Flaw of “Everyman for himself” mindset exposed

• Image of business fraternity damaged• Investors

• Customers

• Government

• General publicGeneral public

• Desperate need for business community to• Repair image

• Re-examine value system

• Give a “human face” to capitalism

Why get involved in development and CSI

Customer Employees

Corporate

ShareholdersSociety

Profit / People / Planet (Triple bottom line view)

What is good for one is good for the others


• Meet customer needs• Establish strong customer grelationship

• Maintain strong consumer value• Sustainability

Customer Employees

Corporate

ShareholdersSociety




•Working conditions•Employee engagementp y g g•Reciprocity•Volunteerism

Customer Employees

Corporate

ShareholdersSociety




Customer Employees

Corporate

ShareholdersSociety

•Sustainability•Corporate Citizenship•Brand image




Customer Employees

Corporate

ShareholdersSociety

•Accountability•CSI / Partnerships•Private•NGOs•Government•Society



Types of CSI

Strategic/ P t hi /Partnership/ Integrated Approach

Market Driven

Corporate Philanthropy

Types of CSI


Market Driven


• Act of genuine benevolence• Fund causes that touch the heart• No real strategic benefit• May receive favourable publicity

Types of CSI


Market Driven


• Fund causes that will create good publicity• No or minimal strategic benefit irrelevant• Driven by marketing or corporate affair dept.

Types of CSI


Market Driven

Corporate Philanthropy • Invest in social causes that will enhance long-

term strategic position• Design their CSI programmes• Strategic benefits independent of publicity.

Significant shift in relationship between private enterprise and societyprivate enterprise and society

Financial Performance

Environmental Performance

Social Performance

Ethical imperative towards

i t linvestors only

Proper governance and management focus on social and ethical matterson social and ethical matters

Financial Performance

Environmental Performance

Social Performance

Responsible business

conduct and good

t

N C i A t 71 f 2008

corporate citizenship

• New Companies Act 71 of 2008• Came into force May 2011

• Approach sourced from King III Report on Corporate Governancepp g p p• Shift from ‘shareowner compact’ to ‘stakeholder compact’

• States that reputation is a company’s most significant asset

• Management and effective stakeholder engagement crucial• Management and effective stakeholder engagement crucial

• Company acting in a responsible and ethical manner leads to

• Good financial performance in long run

• Maintaining productive relationships with government and regulators

• Requirement to establish • Social and Ethics Committee

• Social and Advisory Panel to assist committee

• Ensures proper governance and management focus on social and ethical matters

Reputation is keyp y

Source: 2012 Reputation Institute

Agenda




4. Volunteerism

Partnership and Collaboration Planet

• Corporate-to-Corporate level

p

Profit

People

• Not much has happened

• CSI viewed as competitive

• Failure to distinguish betweenFailure to distinguish between • sponsorship to benefit business

• “right thing to do”

• Corporate-to-Government level• Trust, a major factorj

• Foundation to build trust• Value importance of relationship

D l h d d i i t th• Develop shared and common vision together

• Invest in relationship and nurture it

• Honesty is vital

• Differences must be understood

• Focus on commonalities

Partnership with Communities Planet

• Consultative manner

p

Profit

People

• Greater involvement from company

• More sustainable solutions for beneficiaries

• Need to talk and listen to communities• Understand intricacies of initiatives

• Design solutions for the communities

• Avoid imposing company/NGO-created solutions

• Takes more time to set up, implement and follow through

• Benefits of approach• Ensures beneficiaries receive most suitable and sustainable benefits

• Easier to gain deeper understanding of involvement areas

• Focus through fewer areas of specialisation

Agenda




4. Volunteerism

Volunteerism-Partnership with Employeesp p y

• Doing good must be embedded in the values

• Employee participation drives better employee engagement

• Leadership development tool• Leadership development tool

• If the company contributes 1% of its after tax profits employees can contribute 1% ofIf the company contributes 1% of its after tax profits, employees can contribute 1% of their work time to volunteerism. At least 3 days per year per employee.

FirstRand Volunteers Programme Planet

• Falls under the FirstRand Foundation

g

Profit

People

• Launched in 2003

• Includes staff, “heart of the business”

• All four divisions participateAll four divisions participate

• Voluntarily donate both time and money

• More than R22 million contributed since launch

• Charity organizations selected by employees, across a range of sectors:• Orphaned and vulnerable children• Orphaned and vulnerable children

• Community engagement

• Health

• Education

• Community care

A i l lf• Animal welfare

• People with disabilities

• The elderlyy

FirstRand Volunteers Programme Planet

• Collaboration between the four divisions encouraged

g

Profit

People

• Host annual group drives to • Maintain the momentum• Maintain the momentum

• Ensure sustainable difference to the needy

• Teams encouraged to share and give feedback on their success stories

• Chairman’s Volunteer Recognition Awards Programme• Run every second year

• Active volunteer teams and individuals invited to submit entriesActive volunteer teams and individuals invited to submit entries

• Hosts a “Community Conversation”• Run every second year

• For charity organizations supported across the group

F t f ti• Forma t of conversation• Do we help or hinder?

• How we can be of better support?

Planet

Profit

People

“ there is ultimately a limit to how much regulation can do In the... there is ultimately a limit to how much regulation can do. In thefinal analysis, you could write all the rules you want, but there hasto be a philosophy of ethical behaviour that comes from humanbeings operating in a professional a ”beings operating in a professional way”

By William H Donaldson

The Role of Business in DevelopmentDevelopment

Making CSI Matter Trialogue Conference 2012Trialogue Conference 2012

Sizwe Nxasana

May 2012

sizwe nxasana - making csi matter

Business

good publicity

line viewwhat

social grants

people women

south africans

real strategic benefit

term strategic position

social causes