ETHICS SURVEY FINDS STRONG ETHICAL BEHAVIOUR BUT FRAGILE CULTURE

Ethics are the bedrock of any successful organisation.

That’s why, in 2021, a group-wide ethical risk survey of Exxaro was conducted by The Ethics Institute. The survey aimed to measure ethical culture, behaviour and perceptions of how ethics are managed in the Group. The survey focused on Ethical Behaviour and Ethical Culture.

How did we score on Ethical Behaviour?

This measures how often employees observe unethical behaviour on a day-to-day basis. Our overall Ethical Behaviour Risk Score was 91%, which means that very few incidents of unethical behaviour were witnessed by employees. This is great news.

The behavioural risks encountered most by employees were:

  • Bypassing Rules: instances of breaking, or bending organisational rules, policies, and procedures.
  • Unfair People Practices: instances of favouritism, unfair discrimination, and poor treatment by supervisors/managers.

How did we score on Ethical Culture?

This measures how much a company’s values, assumptions and beliefs support ethical conduct. Our overall Ethical Culture Maturity Score was 53%, which indicates that we have a fragile ethical culture that needs attending to.

Our biggest ethical challenges were identified as:

  • Ethics Talks – the degree to which employees across all levels speak openly about ethical challenges and dilemmas and discuss ethics before taking critical decisions.
  • Executive commitment to ethics – the degree to which executive management visibly role model ethical behaviour and decision-making; hold employees consistently accountable for their actions; and ensure that ethics is taken seriously in the organisation and employees are supported to do the right thing.

What are the next steps?

Our Ethics Committee designed an ethics strategy and management plan that will address key areas. The interventions have been designed to improve our ethical culture, beyond compliance expectations. The Social, Ethics and Responsibility Committee (SERC) of the Exxaro Board will oversee the implementation of this strategy.

LOWER BBBEE RATING AS WE LEVEL UP

This is a level up on the previous year, and the lower rating is largely because of our performance in the Enterprise and Supplier Development (ESD) category, where Exxaro achieved a higher Net Profit After Tax (NPAT) than budgeted for the financial year ended 31 December 2021.

So, because the budgeted 3% of NPAT spent by the end of the financial year was much lower, we were unable to spend the additional required amount for the ESD programmes during the last quarter of 2021.

We have prepared better for the 2022 financial year to ensure that we fulfil both our compliance obligation and commitment to socio-economic investment in our host communities to improve livelihoods and create employment.

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