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					         Public-Private Strategies
         to Improve Governance
          Ensuring a Sustainable
         Future for the Continent

There is no right way to do the wrong thing

                            Enterprise Governance and Compliance
  “There is no such thing as business ethics,
                  there is only ethics.
     People try to use one set of ethics for their
professional life, another for their spiritual life, and
  still another at home with their family. That gets
them into trouble. Ethics is ethics. If you desire to
 be ethical, you live it by one standard across
            the board.” - John Maxwell

                                           Enterprise Governance and Compliance
Link between business ethics
  and promoting corporate
    governance and CSR

                         BANCASSURANCE AND WEALTH
     “Lead as the green and
     caring bank”

Sustainability at Nedbank is a
holistic integrated journey comprising
four focus areas:

                                         Enterprise Governance and Compliance
Sustainability - Our approach
• Relationship with society in which we operate
   – Value / exploitation
   – Trust / profit
   – Corporate governance
   – Economic responsibility
   – Formal obligations
   – Social expectations
      • Legitimacy
      • Strategic
      • Ethical
   – Social investment / development (CSR)
• Manage our own impact
• Lead through collaboration
• Facilitate through finance and products

                                                  Enterprise Governance and Compliance
Alignment of organisational
values and systems to key
     ethics principles

                          BANCASSURANCE AND WEALTH
Alignment of organisational values and systems to
key ethics principles
•   Board Ethics Statement
•   Code of Business Ethics / Code of Conduct
•   Link to strategy / sustainability
•   Values – employee participation
•   Awareness / training / communication
•   Pledge
•   Policy acknowledgements / outside interest and gift declarations
•   Benchmarking
•   Balanced scorecards

                                                        BANCASSURANCE AND WEALTH
Proposed employee “pledge”: 10 Principles
I will -
1. treat others as I want to be treated by them, the golden rule.
2. always strive to do what is best for my bank, my country and my
3. abide by the values, policies and procedures of the bank, the laws
   of my country and the universal human principles of all that is
   good and just.
4. be honest, reliable, fair and open in everything I say, write and do
   and accept responsibility for the consequences.
5. protect the bank’s assets, information and reputation.
6. value and respect the diversity of beliefs, cultures, convictions and
    habits of the people of our bank and the countries in which we

                                                            BANCASSURANCE AND WEALTH
Proposed employee “pledge”: 10 Principles

7. disclose to the bank any real or perceived situation where my
   private interests or the interests of a member of my immediate or
   extended family or other person close to me may interfere with the
   interests of the bank.
8. not give or receive gifts or benefits in contravention of the policies
   of the bank and no gift, irrespective of value, should influence me
   to change a business decision.
9. seek new, better and more innovative ways to do my work and do
    it to the utmost of my abilities.
10. not remain silent in the face of dishonesty, malice, disrespect,
   intolerance or injustice.

                                                           BANCASSURANCE AND WEALTH
Providing effective and ethical
 leadership for organisations

                            BANCASSURANCE AND WEALTH
King III: SA Code of Corporate Governance
Principle 1.1: The board should provide effective leadership
   based on an ethical foundation
The board should:
•   Lead the company ethically for sustainability in terms of the economy,
    environment and society, taking into account its impact on internal and
    external stakeholders.
•   Ensure that the company is and is seen to be a responsible corporate
•   Ensure that the company’s ethics are managed effectively through
    building an ethical culture , setting ethics standards, measuring
    adherence and incorporating ethics into its risk management,
    operations, performance management and disclosure.

                                                            Enterprise Governance and Compliance
King III: SA Code of Corporate Governance

•   Ensure that the company complies with laws and considers rules, codes
    and standards
•   Ensure integrity of the integrated report
•   Report on effectiveness of internal controls
•   Act in the best interests of the company (including managing conflicts
    and dealing in securities)
•   Ensure that the company complies with laws and considers rules, codes
    and standards.

                                                           Enterprise Governance and Compliance
    Good Corporate Governance Benefits
•    Shareholders pay a premium for a well-governed company.
•    See that the business is run properly.
•    The company is directed and controlled properly.
•    Economic and social goals are balanced.
•    Balance individual and communal goals…align the interests of
     individuals, corporations and society.
•    Corporate governance includes all structures, processes,
     systems and procedure whereby the company is governed.
•    Advantages for company: better risk management, lower cost of
     misconduct, higher profits.
•    Better international prospects in obtaining finance
                                                       Enterprise Governance and Compliance
Business Governance
•   Business Governance is the process of ensuring that business is
    conducted with integrity and accountability.

•   It is the entire accountability framework, ensuring that every
    individual is accountable for his or her actions and that a strong level
    of transparency exists within the business – a way of making
    Governance a reality to all staff members.

•   It ensures that the principles of sound governance practises are
    incorporated into management decision-making and that this good
    governance practice guides all actions and decisions.

•   Business governance includes all the structures, policies, systems
    and procedures by which the Bank is governed

                                                          Enterprise Governance and Compliance

Mainstreaming ethics within
     the organisation

                         BANCASSURANCE AND WEALTH
Ethics / Code of Business Conduct
• Def: Principles, norms and standards guiding conduct in
  terms of activities, internal relations and interactions with
  external stakeholders .
  Based on: Constitution, Legislative Framework, policies,
  Code of Business Ethics and Conduct
• Includes:
    –   Accountability
    –   Responsibility
    –   Fairness
    –   Transparency
• Board Ethics Statement
• Code / Values / Strategy
• Balanced Scorecards

                                                   Enterprise Governance and Compliance
Ethics Program
• Ethics Office
• Ethics Officer – senior position so as to be influential
• Code of Business Ethics and Conduct
    – Group Values unpacked in terms of principles
    – Merged with Conflicts of Interest Policy and Gift Policy
      and linked to PA and Insider Trading Policy, Fraud and
      Corrupt Activities Policy, Whistle- blowing Policy and
      Reputational Risk Policy
    – Annual declarations
    – Policy management process
• Board Ethics Statement
                                                    Enterprise Governance and Compliance
Ethics Program
• Board Ethics Statement
• Ethics Committee
   – Chief Enterprise Governance and Compliance Officer
   – Chief Risk Officer
   – Chief Internal Auditor
   – Ethics Officer
   – Head of Group Risk Services
• Annual Board and EXCO awareness sessions.
• Management and employee awareness training.

                                              Enterprise Governance and Compliance
Ethics Program - Monitoring
• Staff survey questions, results monitored year on year, any
   result below 80% addressed with awareness creation and
   relevant training interventions.
• Compliance Tool:
    – Declarations of outside interests and directorships,
    – Declarations of gifts received / given,
    – Policy acknowledgements & short survey to test
• Tip-Offs Anonymous
• Misconduct statistics / dismissals

                                                   Enterprise Governance and Compliance
Ethics Program - Measurement / benchmarking
• Nedbank Ethics Indicator
• Why?
   – You cannot manage without measurement,
   – External, objective measurement,
   – Set a benchmark to measure the performance regarding
     ethical behaviour of Nedbank employees and also the
     effectiveness of the Ethics Function,
   – Measured the capacity of Nedbank to promote ethical
     conduct and allows for intelligent design of targeted
     intervention programs on specific problems in different
     areas in the bank,
   – Supports the inclusion of the Ethics KPA into balanced
     scorecards by having a credible tool to measure

                                                  Enterprise Governance and Compliance
General Awareness and Training

• Group ethics awareness communications,
• Policy communications,
• Booklets, posters, flyers, magazines, DVD
• Training, focusing on case studies and examples and thereby
   explain principles - Avoid CBT,
• Case studies on televisions in branches for discussion,
• Incentives.
    – Reporting unethical behaviour.
    – Rewarding ethical conduct.

                                                 Enterprise Governance and Compliance

• Buy-in from staff
• Consistency in application of policies
• Consistent consequence management

                                           Enterprise Governance and Compliance
Resolving ethical dilemmas

                        BANCASSURANCE AND WEALTH
                    Ethical Dilemma

"Character is doing the right thing when nobody's looking.

 There are too many people who think that the only thing

  that's right is to get by, and the only thing that's wrong is

                        to get caught."

                      • -- J.C. Watts

                                               Enterprise Governance and Compliance
                        Ethical Dilemma

When two or more parties hold morally conflicting views about an

    –   Making a choice results in going against one of the values;
    –   Causes inner conflict;
    –   Have to consider pros and cons;
    –   Often would rather not deal with the situation;

                                                   Enterprise Governance and Compliance
Important questions to ask yourself when you face
                   a dilemma

1. Are you adhering to the relevant company values?
2. Are you complying with the applicable company Policies?
3. Do you have all the necessary information to make an informed
4. Have you consulted with all the relevant stakeholders?
5. Are you prepared to deal with the consequences of a bad
6. How would you feel about the decision if you are on the
   receiving side?
7. Will you create a negative precedent making this decision?
8. Will you feel comfortable if the media reports on your decision?

                                                   Enterprise Governance and Compliance
Whistleblower provisions and internal
      handling of irregularities

                                  BANCASSURANCE AND WEALTH
    Whistleblower provisions and internal handling of
Nedbank Group Limited (‘the Group’) and its subsidiaries are
  committed to ethical and fair business conduct.

The Group maintains a ‘Zero Tolerance’ policy relative to the
  commission or concealment of fraudulent or illegal acts and
  inappropriate workplace behaviour.

The Group requires all staff to act honestly and with integrity at all
  times and to safeguard the resources (particularly its reputation)
  for which they are responsible.

Senior Management within subsidiaries must take reasonable
  steps to ensure that the culture and ethics of the business reflect
  Group values.
                                                         BANCASSURANCE AND WEALTH
    Whistleblower provisions and internal handling of

• Whistleblowing is an important mechanism in the prevention and
  detection of improper conduct.
• The non-disclosure of serious malpractice could be to the
  significant detriment of the Group, its employees, shareholders,
  directors, and, in some cases, its customers.
• The Protected Disclosures Act, Act No 26 of 2000 (‘the
  Protected Disclosures Act’) was introduced to protect employees
  from being subjected to an occupational detriment on account of
  having made a protected disclosure.

                                                       BANCASSURANCE AND WEALTH
    Whistleblower provisions and internal handling of

• The protection to whistleblowers is not limited to employees, but
   also relates to shareholders, directors, company secretaries,
   prescribed officers, registered trade union and suppliers.

• The Companies Act, Act no 71 of 2008, (‘the Companies Act’)
   compels companies to establish and maintain a confidential
   disclosure system for the report of disclosures provided for in that

                                                         BANCASSURANCE AND WEALTH
    Whistleblower provisions and internal handling of
• Such whistleblowers will have qualified privilege in relation to the
   disclosure and are also immune from any civil, criminal or
   administrative liability as a result of the disclosure.

• If the conditions are met, they would be entitled to compensation
   for damages suffered as a result of the disclosure from any person
   who caused detriment to them or who threatened them.

                                                             BANCASSURANCE AND WEALTH
Policies to assist in the management of misconduct
Examples of policies:
 Compliance Policy
 Corporate Responsibility Policy
 Employee Relations Policy
 Fraud and Corrupt Activities Policy
 Information Security Policy
 Personal Account and Insider Trading Policy
 Procurement Policy
 Reputational Risk Policy
 Supplier Code of Conduct
 Whistleblowing Policy
                                                BANCASSURANCE AND WEALTH
         Thank you

        Michael S Mpanza
  Office tel. no. +27 11 294 0507

                                    Enterprise Governance and Compliance

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