Stakeholder engagement and sustainability

The Altech Group operates in 14 countries and employs more than 4 000 employees. Due to the nature of our diverse business offering we have a broad and complex range of stakeholders. As stated by King III, Altech agrees that effective stakeholder engagement is essential to good corporate governance and one of the core principles driving sustainability.

As highlighted during the strategic review in 2011 and considering the material issues relevant to the group, Altech’s stakeholder and sustainability priority areas are:

  • Stakeholder engagement
  • Human capital (including human resources and transformation)
  • External relationships (customers)
  • Environment
  • Communities

STAKEHOLDER ENGAGEMENT

The board’s approach to stakeholder engagement is to:

  • Identify and engage with important stakeholders
  • Appreciate that stakeholder perceptions affect reputation, and therefore manage reputation risk
  • Delegate to management the responsibility to deal with stakeholder relationships
  • Oversee the mechanisms and processes for the constructive engagement of stakeholders
  • Disclose in its integrated report its stakeholder engagement
  • Strive to achieve a balance of various stakeholders’ legitimate expectations in the best interests of the company
  • Ensure equitable treatment of shareholders and the protection of minority shareholders

During the strategic review process undertaken during 2011, a number of stakeholder groups and issues were considered, and are included in the table of material issues. In this way, stakeholders’ concerns and opportunities are integrated with the decision-making and strategic process of the business.

Altech’s commitment to its stakeholders is set out in our group mission, which states that the group will relentlessly pursue its ambition to be a leader in every sphere in which it operates, while at the same time empowering and enriching its stakeholders.

In support of our mission, Altech strives to have ethical and transparent interaction with its relevant internal and external stakeholders. The Altech Group operations interact with stakeholders on a daily basis through a number of mediums. The group regulatory and compliance department is responsible for the central co-ordination of stakeholder issues that are external to the group and impact the entire business.

Altech has a structured approach to stakeholder engagement and formally records all interaction at a group level. The focus is on engaging with a diverse number of stakeholders on a regular basis on matters substantive to both stakeholder groups and Altech.

STAKEHOLDER CASE STUDY: GOVERNMENT

The modern and diverse needs of governments require a new and more innovative response from information systems, technology and information management. And when government begins to deliver systems that enable it to function more effectively, this characterises the government’s well-being in the information age. However, this places even greater emphasis on government to accommodate rapid technological changes.

Altech must be well positioned to respond to the demands of government’s needs, have a clear engagement strategy, business development approach, and government relationship model that positions it as a strategic partner – hence the establishment of the Government Synergy Forum.

The purpose of the forum is to identify specific and focused public sector authority accounts, drive initiatives and actions to build good entrenched relationships with stakeholders (at various levels) in these accounts, and push a common Altech message to government to ensure synergies among the various Altech operations.

Altech operations are also able to share experiences and ideas to improve their understanding of government and how to engage/sell into this client base. And, the forum will develop ideas regarding aspects of mutual interest concerning government, be it problems experienced, new approaches, contacts, and more. Altech launched its Government Synergy Forum at the prestigious Symposium on Government as a Stakeholder, held on Friday 27 May 2011 at Summer Place in Hyde Park. The symposium was attended by management representatives from the various Altech operations, Altron and members of Altech’s equity partner community.

Altech

HUMAN CAPITAL

Altech employees are one of the group’s primary stakeholders. Having the right people in place is a crucial part of executing our strategy. As a technology company, we need skilled employees who are prepared to commit to developing alongside the company. Within the constraint of the skills shortage in our industry, we need to make sure that our workforce transforms to match the demographic profile of our country and meet the requirements of B-BBEE legislation.

Our ability to innovate and grow depends on the skills we attract, retain and develop. At the same time, we need to develop our future leaders and ensure that succession is adequately planned for, as highlighted in the material issues table on pages 6 and 7.

Transformation

Altech is committed to the transformation of our workforce and the areas over which we have influence. Our biggest challenges are attracting and retaining appropriately skilled black – especially black female – talent.

Altech

Transformation is guided and implemented by the operational and group transformation committees and the human capital committee. Our transformation focus has shifted to a broader focus on all aspects of transformation to become the employer and supplier of choice in our industry. Our goal is to build a prejudice-free group, where race and gender groups feel equally welcome, thereby accessing a diverse talent base and forging strong relationships with our stakeholders. This includes a broader focus to include categories such as disabled employees.

The group improved its score in all areas of the Department of Trade and Industry Codes of Good Practice, achieving the maximum possible scores in ownership, skills development, enterprise development and socio-economic development. Our biggest challenges lie in identifying and developing internal and external talent to improve our scores in the management control and employment equity categories.

Two new Broad-Based Black Economic Empowerment (B-BBEE) transactions were implemented in Altech Alcom Matomo, Altech Alcom Radio Distributors and Altech Fleetcall, and Altech UEC’s African operations. The B-BBEE shareholding in Altech Information Technologies was bought back during the year.

In the Financial Mail/Empowerdex Top Empowerment Companies 2011 survey Altech achieved industry-wide recognition as one of the country’s leading empowered companies. The survey ranked Altech as the fifth most empowered company in the ICT sector in South Africa, an improvement of two places on last year. We were also ranked second in the Top 10 companies list in terms of skills development. Within the top 100 most empowered companies, we improved our overall ranking to 42nd from last year’s 49th position. This recognition validates our empowerment model and consolidates our position as the partner of choice in the TMT sector.

For more information on Altech’s transformation practices and performance, please refer to the Altech sustainability report available at www.altech.com.

Human Resources

The ICT environment requires special skills. A strong work ethic, good cultural fit and solid technical training are non-negotiable. But the nature of the industry also demands an ability to innovate, anticipate and adapt to rapid change.

Our major challenges are to identify, attract, develop and retain the right people that can execute our strategy at all levels and in all geographical areas of the business.

Human capital is managed by the human capital committee and during the year a new human capital strategy was implemented to ensure that Altech addresses its evolving human capital challenges and has the necessary talent to achieve its challenging targets.

Altech

Total headcount for the year was 4 018 employees, with employees at international operations falling slightly from 879 in 2011 to 828.

Most of the international staff are located in East and West Africa, but Altech has a growing number of staff in Germany, Australia, France, India and China.

Develop and maintain core skills

Developing and maintaining core skills depends on offering the right skills development programmes to the right people. It also requires a safe, pleasant and healthy working environment and ensuring that we retain the staff we train.

Altech has a number of programmes in place to ensure a pipeline of good technical skills into the group, including:

  • A learnership programme.
  • A bursary programme focused on developing a pipeline of engineering skills.
  • An 18-month engineering in training programme to develop practical experience in engineering graduates.
  • A broad range of programmes offered through the Altech Academy.

All of these programmes take into account the need to transform the business and, as much as possible, focus on identifying historically disadvantaged individuals.

Develop senior management capacity

Our leadership development programmes, run through the Altech Academy, focus on building management and leadership skills and competencies in high-potential candidates.

Executives with great potential are nominated to attend top international management development programmes offered by Harvard Business School in the US and INSEAD in France. One senior executive attended an eight-week programme during the year under review and two more will enter the programme in the coming financial year.

Leadership and succession planning

Altech’s succession planning committee runs an annual succession planning process to identify a pipeline of appropriate successors for senior managers. Most senior managers at operational level have been allocated a potential successor drawn from the pool of leaders in the various development programmes. The chief executive officer reports progress to the board on an annual basis.

The appointment of a chief operating officer is essential to support the chief executive officer as the group continues growing. While an appointment is a matter of urgency it is important to ensure that the appointment is a good cultural fit with the organisation.

Our sustainability report provides more information on the group’s human resources. This report is available at www.altech.com.

customer RELATIONSHIPS

Clients and customers – Improving the overall customer experience

A key focus for the Altech Group to enable long-term growth is to ensure that our customers experience us as an organisation that is responsible, ethical and cares about the experience we offer them. In an increasingly competitive local and international market, where Information and Communication Technologies (ICT) services can be perceived to be commoditised, Altech differentiates itself through excellent customer service.

Protecting the rights of our customers

Those operations that retain confidential customer data have strict controls in place to ensure that this information remains private. Customer privacy is governed by the group information management council and charter.

Altech Autopage Cellular and Altech Netstar are the most exposed to the Consumer Protection Act (CPA). Both companies have compliance processes in place and have taken the necessary steps to ensure compliance with the CPA.

Ensuring outstanding customer service

In increasingly mature and competitive markets, Altech Autopage Cellular and Altech Netstar can build customer loyalty through offering outstanding customer service. Both companies have measures in place to improve customer service, have set themselves quantified targets and monitor a range of metrics to track their performance.

While most of these measurements either exceeded their targets or showed improvement on the prior year, churn in Altech Netstar proved harder to control than anticipated and an improved system for tracking first call resolution in Altech Autopage Cellular resulted in a decline in reported performance in this area.

THE ENVIRONMENT

Altech’s operations are categorised as posing either a low risk or a very low risk to the environment. We acknowledge our responsibility as a good corporate citizen to reduce and manage our resources with care.

Our approach to managing our impact on the environment at an operational level is guided by our safety, health and environmental policy. Our business risk committee and board identify where the group’s key environmental risks lie.

The environmental data collection process this year revealed a number of errors in last year’s figures, the most significant being in the reported electricity consumption which fell from 33.2 million kWh in 2011 to 18.9 million kWh in 2012. This in turn affected the reported group carbon footprint.

We are currently assessing the need to revise our three-year environmental targets set against the 2010 reporting period.

The various operations in the group have implemented recycling programmes where this is practical.

Water consumption for the group was 77 851 kilolitres for the year, the bulk of which was consumed in Altech UEC’s manufacturing operations. Water usage reduction targets will be set for the group in the year ahead.

For more information on Altech’s environmental performance, refer to the full sustainability report at www.altech.com.

Altech

COMMUNITIES

All businesses operate in a social context. Investing in the future of our communities, ensuring that our operations do not negatively impact those around us and respecting the rights of those that work for us and our suppliers, not only helps us to keep our conscience clear, but also helps to grow our future markets. At the same time, respect for human rights and a focus on ethical business practices ensures we keep our social licence to conduct business.

Corporate Social Investment

Altech is involved in a variety of corporate social investment initiatives, both at group and operational level. In 2012, we spent R4.56 million on SED initiatives compared to R5.2 million in 2011, both well in excess of the 1% of net profit after tax target.

Responsible business practices

As Altech expands into more countries, we need to continue ensuring that our foreign operations and their suppliers apply the same high standards of corporate governance as we do in South Africa. This includes protecting and upholding the rights of employees, consumers and all others on whom the company has a direct or indirect material impact.

Impact of foreign operations

ICT services deliver a broad range of benefits which can make a profound difference to communities, especially in developing markets. These benefits include enhanced educational resources, empowering women, improving access to medical care, awareness of hygiene and healthcare and improving workers’ ability to find better work or get a better price for their goods.

At the same time, the delivery of these benefits should be made in a way that does not harm the environment, disrupt communities, exploit workers, or corrupt employees and local officials.

Altech has initiatives in place to ensure local communities benefit from broadband, source from local suppliers where possible, create jobs and uplift and develop staff at the various international operations.

Human rights and fair labour practices

Altech respects the rights of employees, whether employed directly by group operations or by its suppliers. The employee handbook, which is given to all employees, has a section that addresses discrimination, fair treatment and other aspects of human rights. Suppliers are screened where there is a perceived high risk of possible human rights issues and employees receive training on human rights policies and procedures. Altech’s human rights policy protects the rights of employees, the employees of our suppliers and the rights of local communities.

Business ethics

As reported in the corporate governance section on page 88, Altech is committed to ethical business practices and a member of the Ethics Institute of South Africa since May 2012. Certain of our units operate in industries and territories which have a perceived high risk of corruption. Our policies on ethics, bribery and corruption extend across all our operations and controls and processes are in place to make sure these are implemented. Employees are trained and mentored in anti-corruption controls in higher risk areas of the business.

For more information on how Altech manages its impact on communities, please refer to the full sustainability report at www.altech.com.