Enterprise governance and compliance

CODE OF ETHICS AND CONFLICT OF INTEREST

These values, which are closely aligned to those of the group’s holding company, Old Mutual plc, have also been incorporated into the groupwide code of ethics that forms the foundation of the Nedbank culture.

During 2008 the Nedbank Group Code of Ethics, which is available on our website at www.nedbankgroup.co.za, was reviewed and aligned with accepted international standards. Increasing awareness of this code among employees remains a key focus area and is viewed as playing a crucial part in making governance a reality for Nedbank staffmembers. For this reason awareness communications and various practical case studies were sent out during the year, reinforcing the principles and importance of values and ethics within the organisation. A total of 106 awareness sessions were also conducted, including subsidiary board training, executive training and the training of managers and employees. The focus of these sessions was on the group’s Code of Ethics as well as the Conflict of Interests Policy and the Declaration of Gifts Policy. The Tip-offs Anonymous® reporting line was also marketed, resulting in awareness among employees of their responsibility to report incidents of unethical behaviour. To create further awareness the ‘Ethics and Principles of Corporate Citizenship’ booklet was developed and distributed to all employees at the end of 2007 and beginning of 2008. The group television channel was also used to introduce briefings and ethics tips to employees.

Business training was rolled out for various business units. This year the focus was on subsidiary board training and management and employee training. The Nedbank Board also attended an awareness session as part of board training by the Ethics Institute of South Africa. The Ethics Institute of South Africa is assisting the group with the rollout of its training programmes, and two accredited ethics officers form part of the Enterprise Governance and Compliance division.

The compliance tool was launched during 2008 as an electronic mechanism for the declaration of all gifts given and received. It also serves as a repository for declarations of outside interests and allows employees to formally acknowledge that they have read and understood these policies. It even offers a short survey to test their understanding of the principles used in the policies. The rollout of the Conflict of Interests Policy via this electronic tool started during 2008 and continues into 2009, while the rollout of the eight other Enterprise Governance and Compliance policies or acknowledgements will commence at the end of February 2009.

A generic induction presentation was developed, covering the Code of Ethics, the Conflict of Interests Policy, the Gifts Policy and Sustainability, and this was distributed to the business to be included in all employee induction programmes.

Nedbank Group also has an ethics framework, which includes the addressing of issues such as conflict of interests, gifts and personal-account trading, for which policies are in place and reviewed annually to guide employee behaviour.

Group Risk Services, Human Resources, Group Internal Audit and the HR Ombudsman assist in the reporting and resolution of ethics issues that arise in the business.

The Nedbank Group Board Ethics Statement remains in place and was included in the Code of Ethics during 2008. As there are changes to the board annually, the directors recommit themselves on an annual basis to the Nedbank Group Ethics Statement via the Directors Affairs Committee.

Enterprise Governance and Compliance consulted with various external stakeholders to simplify the Code of Ethics and to develop innovative ways to create better awareness of, and buy-in to, a highly ethical corporate culture. The Code of Ethics is also currently being extended to external stakeholders.

The Nedbank Group Supplier Code of Conduct was developed and included in all contracts managed by Group Procurement along with the relevant acknowledgements required by suppliers.

A staff survey on ethics conducted during 2008 yielded pleasing results. The number of respondents increased from 10 041 in 2007 to 11 735 (response rate: 41,3%) in 2008. The overall staff rating of the organisation increased from 83% to 86%, which represents a significant positive shift in employee perception. The ethics indicator is the highest indicator in the group for three years running, indicating that employees are aware of the policies in this regard and understand what is required of them.

The Group Exco has agreed in principle that an ethics measurement be incorporated in the performance scorecards of all employees. For 2009 ethics will be included in the Group Executive scorecards as a modifier that will be measured by the Nedbank Ethics Indicator. The indicator will be finalised by the end of March 2009. A project approach will be followed to address gaps when the results of the indicator are analysed.

Enterprise Governance and Compliance formalised a Group Environmental Forum to ensure the effective coordination of environmental initiatives across the group; to provide a platform for information sharing and capturing of synergies; to ensure consolidated group reporting; and to provide for a single platform for consistent communication and marketing. The forum is chaired by the Group Executive: Governance and Compliance. The scope of the forum includes a review of progress made on environmental initiatives within the following business areas: Group Finance; Group Technology; Nedbank Retail; Nedbank Capital; Nedbank Corporate; Group Communications and Marketing; Group Strategy; Group Planning Alignment; Enterprise Risk Management; and Group HR. It also includes representatives from WWF-SA. A charter is in place for the forum, which has been incorporated in the group governance structures. The forum is also responsible for setting the environmental strategic direction for the bank. Further details in this regard are provided in section 8 of this report.