OWNERSHIP
a. Introduction
This refers to direct ownership of
shares by black people. In some
instances indirect ownership by, for
example, the pension fund is
considered.
Broad based ownership refers to the
composition of the acquirers of the
shares. It is intended that not only
the race but also the number of
beneficiary individuals, house holds
or communities should be taken into
account.
It is preferable that ownership be
spread to include specifically
historically disadvantaged
individuals.
b. Policy Statements
Altron subsidiaries which enter into
BEE equity partnerships shall aim
for a minimum of 25.1% level of
black ownership by the target date
of 2010. No BEE shareholding
transaction shall be concluded
without the approval of the EXCO.
It should not matter whether this
ownership percentage occurs at a
holding, sub-holding or operational
level. This effective black
ownership must be calculated at
whatever level is being examined. A
simplified flow chart indicating the
relevant equity
ownership/shareholding should be
given out. An example which shows
how three different scenarios would
result in an effective 25.5%
shareholding for ABC (Pty) Ltd, a
subsidiary of Altron located in the
Altech Group of companies, is
portrayed here.
In all three scenarios the
empowerment equity remains at 25.5%.
ABC (Pty) Ltd is by definition a
black-empowered company.
Currently, it is Altron policy to
empower at operational level.
However, the flexibility is allowed
whenever it is deemed appropriate
either to empower at sub-holding
company level or to combine the
operational and subholding company
levels.
A key requirement is that the
percentage share of the black owners
must have a demonstrable capacity to
add value to and be operationally
involved in the main business of the
empowered company. Passive
investment is discouraged. In this
regard a list of specific activities
to be performed by a BEE partner
will form part of the relevant
shareholders agreement.
With regard to broad-based ownership
requirements, Altron Policy is to
transact with a single legal entity
whether it is already a broad-based
entity or a consortium leader who
will undertake to fulfil the
requirement with approved members of
a consortium. Altron reserves the
right to specify the nature of
parties who will qualify in this
regard with reference to the nature
of the company, the nature of the
business or the desire to match or
exceed competitors.
At Altron, it should be practice to
invite a pool of approximately five
potential partners, short listing
and eventually reducing the list to
a final candidate who may or may not
be made up of a combination of the
original list.
Preference will be given to BEE
partners who have the highest
effective black shareholding,
appropriate financial backing and
the biggest potential to add value
to the operation.
FUNDING POLICY
Special purpose vehicles (SPVs) are
no longer the preferred method of
funding.
Companies, together with Altron,
will endeavour to present suitable
funding solutions.
The EXCO will from time to time
issue guidelines and models
currently favoured by Altron in BEE
partnerships or other mergers and
acquisitions.
Altron shall assist its potential
partners by opening doors to
financial institutions, leveraging
on longstanding relationships with
those institutions.
Should the BEE partner wish to sell,
the onus of finding a suitable BEE
substitute shall fall on the
existing partner. There shall be
included in the shareholders
agreement a clause restricting
transfer of shares to a non-BEE and
non-approved substitute shareholder.
c. Targets
d. Measurement
This category is simply measured by
calculating the effective legal
ownership of shares by historically
disadvantaged individuals in the
registered company being assessed.
BOARD & MANAGEMENT REPRESENTATION
a. Introduction
The South African economy is
characterised by a general absence
of black people and, more
particularly, black women in the
executive leadership of companies.
For example, in 2003 there were only
64 black executive directors of JSE
Securities Exchange South Africa
listed companies out of a pool of
1200. (The combined figure for both
executive and non-executive
directors currently stands at 413
out of a total of 2 964)
The reasons for this are mainly
historical and also relate to a
shortage of skilled black
professionals and artificial
barriers to entry.
b. Policy Statements
Altron is committed to ensuring that
the top leadership of the group and
its subsidiary companies is
representative of our population.
The diversification of structures is
not only viewed as important in
relation to representation, but also
as being beneficial in bringing a
wide range of viewpoints to the
decision-making process. In this
regard, the principle of gender
diversity is regarded as important
as racial diversity.
Altron is further committed to
taking practical steps to create a
working environment which is not
alienating to any existing or new
employees in the pursuance of this
policy. Opening effective channels
of communication, encouraging
informal social interaction, staff
training in management and valuing
cultural diversity are some of the
measures which will be put in place
throughout the group.
Specialised training and mentoring
in respect of areas such as
corporate governance and the
fiduciary duties of a director will
be arranged for all new directors.
A strategy to attract external
candidates with the abovementioned
programmes aimed at generating
homegrown talent.
Specifically named individuals from
the ranks of junior management will
be identified for fast-tracked
specialised training and planning of
career paths. The process of
selecting these individuals will be
holistic, rigorous and
uncompromising on issues such as
leadership abilities, tenacity and
willingness to learn and to take
unpopular decisions.
Conditions may be attached to the
granting of the training, with the
specific aim of preventing
job-hopping and the realisation by
the group of the investment made in
the individuals concerned.
c. Targets
Definition:
targets for HDI representation of
boards and top management for each
legal entity in the group.
| |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
2010 |
|
Executive
Directors |
20% |
25% |
30% |
33% |
40% |
40% |
|
Non-executive Directors
|
20% |
25% |
30% |
33% |
40% |
40% |
d. Measurement
This indicator will be measured by
headcount of qualifying directors as
a percentage of the total number of
the top line management in an entity
or the Board of Directors.
A comparative analysis with other
top line managers in relation to
matters such as levels of control,
actual decision-making capacity,
budgeting levels and reporting
staff, will form part of the
qualification criteria. Manipulative
restructuring of existing structures
by managers in order to artificially
achieve targets will be viewed in a
serious light.
The Transformation Committee shall,
subject to the approval of the EXCO,
provide specific guidelines for the
implementation of this policy.
HUMAN RESOURCES DEVELOPMENT
(EE & SKILLS DEVELOPMENT)
a. Introduction
Unless there are specific measures
aimed at increasing the pool of
available black skilled employees at
management as well as at all levels
of employment, the current distorted
statistics will take years to
change. Altron is convinced that by
implementing its policies of
employment equity and skills
development, the group will be
making a significant contribution to
urgent national imperatives and
enhance Altrons profitability.
This aspect of BEE is largely
regulated/supported by legislation.
This section must be considered in
conjunction with the provision of
the Employment Equity Act, No. 55 of
1998 and the Skills Development Act,
No. 97 of 1998.
b. Policy Statements
Altron supports the national
imperative of employment equity or
affirmative action, not only because
it constitutes a moral imperative,
but because the development of a
suitable, equitable society in South
Africa makes sound commercial sense.
Employment equity and skills
development should be implemented
throughout the group as a key
objective against which management
will be measured to ensure that
commitment is obtained. Significant
resources need to be allocated to an
affirmative action and skills
development strategy, while true and
active support needs to be
demonstrated by senior and top
management.
It has further been identified that
Change Management and Diversity
Management Training is a key factor
that must be implemented across the
group to:
manage the process of change within
the group during the transformation
process;
facilitate the entry of EE
candidates into the culture of the
group; and
manage diversity in the workplace.
The purpose of the Employment Equity
Act is to achieve diversity in the
workplace. It legislates the
implementation of affirmative action
measures to address the
disadvantages in employment
experienced by designated groups, in
order to ensure their equitable
representation in all occupational
categories and on all levels in the
workplace.
The Skills Development Act seeks to
provide a mechanism for improving
the countrys skills shortage and to
ensure that all employees have
access to an integrated and
outcome-based learning system.
RECRUITMENT
EE Plan
Each company with more than 50
employees is, by legislation,
required to prepare and submit an
Employment Equity Plan to the
Department of Labour. Subsequently,
status reports are to be submitted
periodically.
In order to adopt a proactive and
systematic approach to Employment
Equity Recruitment in the group, the
following approach is being
recommended:
INTERNAL RECRUITMENT
Identification of areas of focus at
management level for employment
equity candidates. This involves the
identification of recruitment needs
by each group company in the
different operational and functional
areas.
The development of area specific
targets by each operation. A
strategy should address the
following:
Identification of internal
candidates with potential for
promotion into management in the
identified areas.
Development of a Management Training
Plan for each identified position as
well as a mentorship strategy.
Monitoring and Evaluation of
progress of the candidates (against
Competency Profiles) and the
process.
Target opportunities for replacement
attrition, retirement and
resignations.
Creating space for senior management
employment equity appointments.
Strategies for Creating Space
should include:
Flattening organisational
structures.
Where practically possible,
voluntary severance packages to
certain current incumbents as per
legislative requirements will be
considered.
Implementing organisational
re-design strategies.
EXTERNAL RECRUITMENT
Parallel to the internal strategy
and supplementing it where no
internal candidates are suitable for
promotion into existing and new
vacancies external recruitment
practices are to be put in place.
In companies consistently falling
below established group averages,
for all new appointments preference
must be given to be employment
equity appointments.
A record to be kept of efforts to
attract and recruit employment
equity candidates including
advertisements, headhunting and
networking inside and outside the
group.
All interview lists should have
employment equity candidates.
EMPLOYEE INTEGRATION
Induction and Orientation
Each company in the Altron group
shall develop/have an appropriate
Induction/Orientation System for all
new employees in the group. The
Induction/Orientation System shall
include:
a company-specific
Induction/Orientation Policy;
a company-specific
Induction/Orientation Procedure
detailing all actions to be
performed when inducting a new
employee;
a company specific
Induction/Orientation Programme
(presentation/s, booklets etc.); and
a sign-off procedure.
Performance Management
Each company within the Altron group
will develop/have and conduct a
comprehensive Performance Management
System/review that will include:
a company-specific Performance
Management Policy including an
agreed review period;
a company specific formal
Performance Management Procedure
detailing all actions to be
performed when conducting
performance reviews;
a company specific informal
Performance Management Procedure
detailing
ad hoc
initiatives to improve performance
on an ongoing basis; and
a sign-off procedure.
RETENTION STRATEGIES
All Altron companies are to develop
a Retention Strategy policy to
ensure that all attempts are made to
attract and retain key employees,
with special emphasis on employment
equity employees. Strategy can
include:
competitive market-related
remuneration packages (including
benefits). Identified key people
should be in the top quarter
percentile;
salary audits and where necessary,
re-adjustments;
management trainee mid-year
increases against proof of progress
against targets (performance
management);
development programmes;
opportunities for personal
self-growth and promotions
identified through the Performance
Management and Succession Planning
Systems;
management to get closer to their
employees;
opportunities for national and
international exposure; and
ensuring that the corporate culture
and climate is conducive for
attracting and retaining key
employees such as management and
organisational support, challenging
stimulating work environment,
autonomy, etc.
SUCCESSION
PLANNING
Each company within the Altron group
will develop/have a comprehensive
Succession Planning System that will
include:
a company-specific Succession
Planning Procedure
detailing all actions to be
performed when conducting succession
planning; and
a sign-off procedure.
A properly developed and monitored
succession plan should form part of
the EE strategy in the group. It
will entail the following:
The identification of management
positions targeted for succession
planning;
Identification of internal staff,
with potential, to shadow current
incumbents of such positions;
Development of training and
development programme for future
potential incumbent/s as well as
their
performance indicators.
Formal
monitoring and evaluation of
progress in the succession plan at
least every six months as well as
ongoing monitoring when necessary.
SKILLS DEVELOPMENT
The Skills Development Act spells
out measures to be taken to
undertake skills development of
employees in the workplace.
Additionally the group is committed
to the following areas of skills
development:
Bursary Programmes
Bursary programmes, aimed at high
end skills in the operational areas,
should be budgeted for by companies
in the specific disciplines relevant
to the business, e.g. engineering,
logistics, production, sales,
marketing and finance.
Management Trainee Scheme
Each company within the Altron group
will develop/have a comprehensive
Management Trainee Programme that
will include:
a company specific Management
Trainee Policy;
a company specific Management
Trainee Procedure
detailing all actions to be
performed when recruiting,
placing and developing such
trainees; and
a Management Trainee Contract.
Experiential Trainee Schemes
Each company within the Altron Group
will develop/have
a comprehensive Experiential Trainee
Programme that will include:
a company-specific Experiential
Trainee Policy;
a company-specific Experiential
Trainee Procedure
detailing all actions to be
performed when recruiting,
placing and developing such
trainees; and
an Experiential Trainee Contract.
Apprenticeship/Atrami
Until such time as the traditional
Apprenticeship/Atrami System is
replaced by Trade Learnerships, the
group will continue to indenture
apprentices in, amongst others, the
fields of:
Fitter and/or Turner;
Electronics;
Electrical;
Boiler Making; and
Welding
Education Assistance
Each company within the Altron group
will develop/have a comprehensive
Education Assistance Scheme that
will include:
a company specific Education
Assistance Policy;
a company specific Education
Assistance Procedure
detailing all actions to be
performed when considering such
assistance; and
an Education Assistance Contract.
Skills Development Programmes
Individual development and/or skills
plans will be developed for all
employees in order to competently
perform their current functions as
well as identified future positions.
Such areas can include:
Management development programmes)
current and future);
Supervisory development programmes
(current
and future).
Mentorship programmes.
Formal skills training programmes
for positions below supervisory
level.
Learnerships
Learnership programmes should be
implemented, in conjunction with the
relevant SETA, for development and
certification of employees and new
job entrants.
c. Targets
The EE targets refer to HDIs as per
BEE Act of 2004.
|
Mgt Level |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
2010 |
|
Senior Mngt |
10% |
15% |
20% |
25% |
30% |
35% |
|
Middle Mngt |
20% |
20% |
25% |
30% |
35% |
35% |
|
Jnr Mngt |
25% |
25% |
30% |
35% |
40% |
40% |
TRAINING
In order to ensure that acceptable
progress is made in the area of
skills development, Altron companies
agree to the following targets being
set in terms of the governments
Balanced Scorecard. This is over and
above the Skills Development Levy.
Targets represent a percentage of
payroll and are subject to
individual company profitability.
|
Year |
1 |
2 |
3 |
4 |
5 |
|
Training Costs
|
1% |
1% |
1% |
1% |
1% |
|
Target |
1% |
1% |
1% |
1% |
1% |
d. Measurement
Targets set by each company in its
Employment Equity Plan must be
subject to the scrutiny and comments
of the Transformation Committee,
sub-holding EXCO and Altron EXCO.
In the case of non-fulfilment the
specific person responsible for
meeting set targets must provide
satisfactory reasons to his/her
reporting superior.
The determination of key performance
indicators for the relevant managers
will be tied to performance in both
skills development and Employment
Equity targets.
AFFIRMATIVE PROCUREMENT & ENTERPRISE
DEVELOPMENT
a. Introduction
This section is aimed at both
creating a vibrant black Small
Medium and Micro Enterprises (SMME)
sector as well as encouraging the
formation of new enterprises of all
sizes.
b.
Policy
Statements
Altron and its subsidiaries
(referred to as the company) are
committed to supporting Black
Economic Empowerment (BEE) as well
as developing and supporting SMMEs
in South Africa. The company will
continue to reinforce this
commitment through
inter alia,
greater emphasis on procurement of
goods and services from black
enterprises.
This endeavor will be commercially
driven and even though the aim is
one of development, consideration of
cost, quality, reliability and
health and safety standards will
remain essential elements for
qualification to supply Altron group
companies with goods and services.
The objectives of the policy for the
Altron Group Companies are:
To attain a target spend on
potential procurement as per targets
set in this policy.
To develop at group and company
level, a credible data base
containing accurate and up-to-date
information on our SMMEs / Black
Enterprises.
To increase business opportunities
for black enterprises and promote
entrepreneurship in local business.
This is to be attained through an
in-depth analysis of our current
demand profile in relation to our
existing traditional suppliers in
order to identify opportunities for
prospective black suppliers.
To encourage existing traditional
suppliers to form
partnerships with black enterprises.
To eliminate barriers that may exist
in terms of our
procurement practices and
procedures.
To establish a baseline and measure
progress against
our annual targets on a monthly
basis.
To award recognition to suppliers
involved in local job creation
initiatives.
This policy shall, where possible,
apply to all tenders and contracts
entered into regarding the supply of
goods and services to all Altron
Group companies.
Altron Group companies will
endeavour at all times to assist and
support existing and emerging black
suppliers in order to accelerate and
fast-track the development and
growth of such suppliers. This will
be done through among other, advice
and guidance in areas such as
quality, financial, administration,
marketing and production management.
These suppliers must at all times be
given clear guidelines to ensure
that tasks are completed in
accordance with expectations.
Tender documents, where applicable,
will be readily available and
accessible to maximise participation
by black suppliers.
Continuous monitoring to identify
shortcomings and skills-gaps must be
done in order to intervene timeously.
Create new procurement
opportunities.
c. Targets
Altron Group companies are to attain
the following target spend of
potential available procurement.
These targets refer to both
affirmative procurement and
enterprise development.
|
Year |
1 |
2 |
3 |
4 |
5 |
2010 |
|
Target |
10% |
15% |
20% |
25% |
30% |
50% |
d. Measurement
Rand spent on BEE as a percentage of
potential spend
Number of strategic alliances formed
with SMMEs
Number of jobs created/sustained as
per formula
(for every R50,000 spent one job was
created/sustained)
Rand spent on development
initiatives or percentages of total
assets
Number of SMMEs that went through
enterprise
development programmes.
CORPORATE SOCIAL INVESTMENT
a. Introduction
The scorecard provides for a
residual section which is left to
the discretion of sectors or
enterprises and which should be
tailored to their circumstances.
Guidelines which are recommended for
this section include:
Infrastructural support of
enterprises in the same area or
community.
Investment and support of
enterprises operating in rural
communities and the geographic areas
identified in governments
integrated sustainable rural
development programme and urban
renewal programme.
A decision has been taken by Altron
to view this section within the
context of its Corporate Social
Investment Policy. This will avoid
duplication in the policy
development.
Further guidance in this section
must be taken from the ICT Sector
empowerment charter and other
applicable charters once it is
finalised (e.g. bridging the digital
divide).
It must be noted that the
relationship between CSI and BEE is
not an easy one. Since the company
is answerable to the entire
community (as stakeholders) it
cannot advocate a corporate
citizenship policy that addresses
only the needs of the historically
disadvantaged section of South
African society. Accordingly only
CSI projects aimed at the
historically disadvantaged should
earn company BEE scorecard points.
This brings about a problem in
designing a measurement policy for
CSI in respect of the overall
transformation mandate.
The following is a suggested
solution.
The 1% profit before tax guideline
(including monetary and non-monetary
contributions) should be used in
relation to the companys overall
CSI policy, irrespective of the
beneficiaries. The EXCO of the
respective sub-holding will reserve
the right to determine the final
figure based on historic and
forecasted results.
In line with demographics at least
80% of the budgeted amount shall be
spent on BEE-related CSI projects.
The Transcom measurement will be
based on this figure.
The annual report shall contain
details of spend against budget in
relation to both abovementioned
targets.
The amount of CSI spend must be
allocated on the basis of the
financial results of the preceding
financial year and ring-fenced into
designated CSI budgets.
b. Policy Statements
As contained in the Altron CSI
policy
Each company shall strive to
contribute a minimum of 1% profit
before tax to its own CSI Fund.
Deviations from this figure must be
motivated to the relevant
sub-holding Transformation
Committee.
In appropriate circumstances and to
ensure maximum impact of project,
two or more companies will be
encouraged to pool resources towards
a single CSI project. The nature and
extent of such pooling shall be
determined according to the business
needs of the affected companies.
For the sake of impact and whenever
it is deemed necessary by the
Transformation Committee a joint
fund will be used for one or two
large projects to be commissioned at
the Altron holding or sub-holding
level.
Each company or cluster of smaller
companies must identify a manager
who is responsible for the
implementation of this policy.
Specific simplified guidelines for the
administration of this policy will
be provided by the Transcom.
c. Targets
1% of profit before tax subject to
approval of deviation by the
respective sub-holding Exco and is
subject to sustainability reports
and historic and forecasted results.
d. Measurement
Points will be allocated according
to:
Adherence to Altron CSI policy;
Attainment of the 1% PBT target;
Impact assessment of own projects;
Sustainability; and
Creativity.
Each of the indicators will count
for 20% of the CSI score, which is
10% of the overall scorecard.
Altron Internal Scorecard
■
This being the founding policy
document it has been decided to
adopt the dti scorecard without
amendments.
■
The decision to adopt the scorecard
without amendments is motivated by
two reasons, namely:
a) Firstly, in the experimental
phase it will be easier to apply the
general scorecard. Due to the
non-static nature of this
policy vision, adaptations can be
brought about in due course once
feedback is obtained from the
operating companies.
b) The ICT and financial services
sectors which are of relevance to
most of our operations are currently
in the process of
finalising sector scorecards. These
will have a bearing on the ultimate
Altron scorecard .
■
The Altron scorecard is represented
below. Its application will be as
set out in the broad-based strategy
document.
|
Core component of BEE |
Indicators |
Conversion Factor |
Raw Score |
Weighting |
Total Score |
Altron Target for 2010 |
|
Direct empowerment score |
|
|
Equity ownership |
% share of economic benefits |
|
|
20% |
|
25.1% |
|
Management |
% black persons in executive
management and/or executive
board and board committees |
|
|
10% |
|
40% |
|
Human resource development
and employment equity score |
|
|
Employment equity |
Weighted employment equity
analysis |
|
|
10% |
|
Per management category.
See page 20 |
|
Skills development |
Skills development
expenditure as a proportion
of total payroll |
|
|
20% |
|
1% skills levy plus 1%
targeted to black people |
|
Indirect empowerment score |
|
|
Preferential procurement |
Procurement from black-owned
and empowered enterprises as
a proportion of total
procurement |
|
|
20% |
|
50% |
|
Enterprise development |
Investment in black-owned
and empowered enterprises as
a proportion of total assets |
|
|
10% |
|
1 2% |
|
Residual 10% |
|
|
To be determined by
sector/enterprise |
Corporate Social Investment
and ICT Charter requirements |
|
|
10% |
|
1% of PBT |
|
Total score out of 100% |
