Statement of strategic ethical intent: Exxaro aspires to build an ethical culture based on Exxaro's values. To do this, Exxaro is committed to operating ethically by living the Exxaro values with dignity, transparency, consistency, fairness and respect in all that we do.
Our board is committed to effective ethical leadership and establishing an ethical culture. Flowing from this commitment, the board adopted a number of codes, policies and practices outlining the group's ethics and values to which employees and suppliers are required to adhere.
To support the board, the SERC is responsible for overseeing the group's ethical performance, and it therefore oversees ethics management. Membership of the SERC was reviewed in 2023, with new members - including the CEO and finance director – appointed at the 2023 AGM.
A management ethics committee exists to ensure that high ethical standards are maintained in Exxaro's business conduct. The committee is responsible for evaluating all instances of fraud, extortion, bribery, corruption, possible conflicts of interest, violations of the code of ethics or any other ethics-related matters.
It also oversees the continuous anti-fraud and anti-bribery initiatives associated with a robust programme in terms of both local and international laws and regulations.
Guided by our ethics strategy and management plan, the ethics officer is responsible for embedding an ethical culture and ensuring that integrity is maintained within the group.
The following fundamental values are expressed in the code of ethics:
| 1 |
Empowered to grow and contribute |
| 2 |
Teamwork |
| 3 |
Committed to excellence |
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Honest responsibility |
The board monitors the group's ethical culture through its reporting structures, including two board committees (SERC and audit committee), the management ethics committee, the internal audit function, head internal audit and our ethics officer.
A culture and engagement survey launched in January 2023 was designed to measure employees' perceptions and engagement against the following categories:
Independent consultants were appointed to manage the survey roll-out and results consolidation. While none of the dimensions scored below the critical weakness cut-off point, the following areas of concern were identified:
Positive findings of the survey included employees' pride in working at Exxaro, DEI, strong buy-in on Exxaro's values and vision, and gender issues. On request from the SERC, management will develop an action plan based on the survey, which will be done in 2024.
As part of ethics management, Exxaro conducted a benchmark on business ethics trends globally. Exxaro is trending positively against the five major global trends listed in the Ethics & Compliance Initiative's Global Business Ethics Survey® 2023 report, with only one finding (fear of retaliation/psychological safety) featuring in the Exxaro culture and engagement survey of 2023. This was reported to the SERC with the recommendations outlined in the survey report. These will be incorporated to enhance our ethics management programme for 2024.
To embed an ethical culture, we adopted the theme "Mining with Morals", which focused on:
In our internal group-wide communication, we reminded employees to be guided by business ethics and the Exxaro family code of conduct. Exxaro expressed our commitment to fighting fraud, corruption, theft and unethical behaviour and acting without fear or favour. By purposefully building ethical guidelines within our business, we are keeping our employees' and stakeholders' best interests in mind while maintaining a positive influence on those we impact through our processes.
ENSafrica conducted an ISO 37001 readiness assessment in 2018 and identified a gap in ensuring that new third-party exposures are assessed as part of a due diligence process. Exxaro has since introduced due diligence processes for suppliers, customers, employees and business partners.
A comprehensive evaluation of the fraud hotline in 2020 identified areas needing improvement, such as the management ethics committee composition; a process for tabling forensic reports; monitoring BU investigations; and updating escalation protocols. All the recommendations were addressed and reaudited to the satisfaction of the internal auditor. As part of this, Exxaro is committed to an independent review of the hotline every three years. The next audit is in 2024.
We encourage employees and stakeholders to report suspected fraud or corruption to Exxaro's fraud and ethics hotline.
The hotline is independently managed and reports to the SERC and management's ethics committee. Due to the importance of retaining the integrity of the hotline, it is necessary for Exxaro to protect the interests of the disclosing parties as far as reasonably possible.
In terms of the Companies Act and King IV, directors and prescribed officers have specific duties regarding disclosure of actual direct and indirect conflicts of personal financial interests as well as the perception of a conflict, including that of their related parties. Directors, prescribed officers and employees (and their related parties) are obliged to actively avoid any conflict with Exxaro's best interest.
Annual general declarations of outside interests are required from directors and prescribed officers in accordance with section 75(4) of the Companies Act. In terms of the policy, annual declarations are also required from all employees in the group.
We implemented and reviewed an electronic platform to facilitate reporting, workflow approvals and an auditable communication trail for disclosures by directors and employees, including a gifts and benefits register, director trade clearances and policy management.
Conflicts of interest policy and register
Supply chain sustainability (ESG report)
The board has expressed a zero-tolerance stance towards bribery and corruption and approved the group-wide anti-bribery and anti- corruption policy. To support the board, the SERC is responsible for overseeing the group's ethical performance, which includes detection and response to fraud and corruption. The RBR and audit committees oversee risks, including controls and fraud risks.
To improve a broader operating environment and culture to combat corruption, our standard operational and capital-related expenditure terms and conditions with suppliers contain specific provisions around sanctions, corrupt practices, fraud and prohibited practices in respect of local and international legislation, including the UN and European Union, which terms are considered material to the relevant agreement.
Guided by the code of ethics and supplier code of conduct, we evaluated our business relationships with various suppliers in light of findings and recommendations contained in the state capture report. The outcome of this evaluation was reported to the management ethics committee, group executive committee and SERC. Guidelines were developed as a framework to deal with implicated companies doing business with Exxaro. The framework will also be used in instances where suppliers and service providers are mentioned adversely in the media or where it comes to Exxaro's attention that the company is under investigation or involved in any dealings (actual or alleged) that could put Exxaro into disrepute.
Exxaro agrees that a clear policy on political funding provides for certainty and consistency and reduces the suspicion that companies are funding parties for their own interest. It is acknowledged that the primary purpose of political donations is to strengthen and consolidate democracy by ensuring that political parties can function effectively within a multi-party democracy.
The group has a board-approved political donation policy in line with national legislation, guiding all political donations and contributions. The board requested that donations rather be directed to the Independent Electoral Commission in support of democratic stability. The update to the policy will be submitted to the SERC for consideration and recommendation to the board for final approval in 2024.
The board is satisfied that the group has not suffered any monetary loss as a result of legal proceedings (including fines) associated with fraud, insider trading, anti-trust, anticompetitive behaviour, market manipulation, malpractice or violations of other related industry laws or regulations.
Report Index
IR