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    • WHO WE ARE
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    • MEASURING OUR STRATEGIC PROGRESS
    • WHY INVEST IN US
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    • CHAIRMAN’S STATEMENT
    • GROUP CHIEF EXECUTIVE’S REPORT
    • OUR STRATEGIC VALUE DRIVERS
  • Our accountability
    • OUR REPORTING SUITE
    • ABOUT THIS REPORT
    • GOVERNANCE OVERVIEW
    • REMUNERATION OVERVIEW
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  • Governance overview

    CREATING AND PROTECTING VALUE

    Our governance philosophy

    Our approach to corporate governance promotes strategic decision-making that balances short, medium and long term outcomes to reconcile the interests of the group, stakeholders and society in creating sustainable value.

    Our corporate governance framework enables the board to oversee strategic direction, financial and non-financial goals, resource allocation and risk appetite, and to hold executive management accountable for strategy execution. The board also ensures that executive management sets the tone for good governance, based on the group’s values, and that it is integrated in the way the group operates at all levels.

    Our approach to governance extends beyond compliance. The board believes that good governance creates shared value by underpinning responsive thinking and protects it by ensuring responsible behaviour – deepening competitive advantage through enhanced accountability, effective leadership, robust risk management, clear performance management and greater transparency.

    We create value by ensuring our governance underpins responsive thinking

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    Our board has the relevant and diverse experience and expertise to support the group’s strategy through effective strategic counsel for market relevance, innovation and digitisation.

    Our experienced executive leadership, with the appropriate depth and skills, is empowered to appropriately lead our people in achieving our strategy.

    Trust is the basis on which we compete. Our strong relationships with stakeholders and our transparency enhances our credibility, ensuring our competitiveness and strengthening relationships aligned to our strategy. This enables the board to identify and respond to opportunities and risks effectively.

    We ensure the effective allocation of our resources and align our relationships to achieve our strategy and our related performance aspirations.

    We invest in sustainable markets, creating and identifying commercial opportunities in supporting social responsibility.

    Achieving our governance outcomes

    The King Report on Corporate Governance (King Code) forms the cornerstone of our approach to governance. We support the overarching goals of King IV, being:

    ETHICAL CULTURE
    GOOD PERFORMANCE
    EFFECTIVE CONTROL
    LEGITIMACY

    Maintaining effective control

    The board has overall responsibility for governance across the group and retains effective control through the board-approved governance framework which enables delegation of authority with clearly defined mandates and authorities while retaining its accountability.

    OUR LEADERSHIP

    Board of directors

    Our directors have deep experience and diverse skills, which collectively ensure that the board operates effectively to protect and create value in the design and delivery of the group’s strategy and in the execution of its duties. Non‑executive directors bring diverse perspectives to board deliberation and constructively challenge management. The board comprises of 16 directors – ten independent non-executive directors, four non-executive directors and two executive directors.

    Separation of roles and responsibilities

    The role of chairman is separate from that of the group chief executive. There is a clear division of responsibilities ensuring that no single director has unfettered powers in the decision-making process. Executive directors and the group’s prescribed officers attend board meetings, increasing the contact between the board and management.

    Supporting gender diversity and transformation

    Diversity
    The board composition is qualitatively and quantitatively balanced in terms of skills, demographics, gender, nationalities, experience and tenure.

    The board approved an amendment of its diversity policy to include race diversity. In addition to the 2016 target of achieving 33% female representation on the board by 2021, the board has undertaken to achieve the race diversity targets in the Management Control Scorecard of the Amended Financial Sector Code of 2017.

    gender-01 25 Female 7 5 Male Gender

    Balancing experience and new insight

    Our group board

    Thulani Gcabashe Photo
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    1. THULANI GCABASHE 61*
    Chairman and independent non-executive director, SBG and SBSA
    Key strengths: Business leadership; executive management of a complex business; solid strategic planning experience. Appointed: 2003. Appointed chairman: 2015
    Hao Hu
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    2. HAO HU 56 #
    Deputy chairman, SBG and non-executive director, SBG and SBSA
    Key strengths: Proven leadership in a large international group; solid board experience; strong strategy management skills in banking. Appointed: 2017
    Jacko Maree Photo
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    3. JACKO MAREE 63 #
    Deputy chairman, SBG and non-executive director, SBG and SBSA
    Key strengths: Over 35 years experience in banking and leadership; deep insight into role and challenges facing a chief executive; skilled team builder. Appointed: 2016
    Peter Sullivan Photo
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    4. PETER SULLIVAN 71 ^
    Lead independent non-executive director, SBG and SBSA
    Key strengths: Seasoned banker with international experience; over ten years leadership experience in both Africa and Asia; strong non-executive director and chairman experience with excellent coaching and mentoring skills. Appointed: 2013
    Sim Tshabalala Photo
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    5. SIM TSHABALALA 51 †
    Group chief executive, SBG and executive director, SBSA
    Key strengths: Extensive groupwide leadership experience; leading strategy formulation and execution; proven track record of enhancing competitiveness and ensuring sustainability; ability to manage complex stakeholder relationships. Appointed: 2013
    Arno Daehnke Photo
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    6. ARNO DAEHNKE 51 Ø
    Group financial director, SBG and executive director, SBSA
    Key strengths: Detailed understanding of banking regulations; financial management, budgeting and forecasting skills; balance sheet management experience, including capital and liquidity management, at group and subsidiary level. Appointed: 2016
    Geraldine Fraser-Moleketi Photo
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    7. GERALDINE FRASER-MOLEKETI 58
    Independent non-executive director, SBG and SBSA
    Key strengths: Experience in international, regional and national politics; strong strategic, ethical and oversight skills; experience in human resources oversight. Appointed: 2016
    Trix Kennealy Photo
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    8. TRIX KENNEALY 60
    Independent non-executive director, SBG and SBSA
    Key strengths: Extensive operational and strategic management experience across a variety of industries and sectors; corporate governance experience of over 30 years; broad experience in strategic financial management including restructuring, acquisitions and integrations. Appointed: 2016
    Nomgando Matyumza Photo
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    9. NOMGANDO MATYUMZA 56
    Independent non-executive director, SBG and SBSA
    Key strengths: Strong financial and executive management skills; experience in strategy development and execution; seasoned non-executive director in several sectors. Appointed: 2016
    KGOMOTSO MOROKA Photo
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    10. KGOMOTSO MOROKA 64
    Non-executive director, SBG and SBSA
    Key strengths: Strong business leadership skills; extensive experience in governance, regulation and public policy; significant legal experience. Appointed: 2003
    Martin Oduor-otieno Photo
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    11. MARTIN ODUOR-OTIENO 62
    Independent non-executive director, SBG and SBSA
    Key strengths: Extensive banking experience of over 18 years; strategy development and execution skills; strong leadership and governance experience. Appointed: 2016
    Andre Parker Photo
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    12. ANDRÉ PARKER 68
    Independent non-executive director, SBG and SBSA
    Key strengths: Extensive experience of running businesses in Africa and Asia; strong brand management experience in fast-moving consumer goods markets; non-executive director experience in South African corporates. Appointed: 2014
    Atedo Peterside Photo
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    13. ATEDO PETERSIDE 63
    Independent non-executive director, SBG and SBSA
    Key strengths: Strong business and banking experience, as the founder and former chief executive of the Investment Bank and Trust Company Limited (IBTC); seasoned investment banker and economist. Appointed:  2014
    Myles Ruck Photo
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    14. MYLES RUCK 63
    Independent non-executive director, SBG and SBSA
    Key strengths: Strong banking experience with a career spanning over 30 years; experience in running a large and complex business; extensive risk management experience. Appointed: 2002
    John Vice Photo
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    15. JOHN VICE 66
    Independent non-executive director, SBG and SBSA
    Key strengths: Extensive experience in auditing, accounting, risk and practice management; experienced IT advisor and consultant in IT strategy, risk, audit and controls; knowledge and experience of running businesses in South Africa and other African countries. Appointed: 2016
    Lubin Wang Photo
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    16. LUBIN WANG 45
    Non-executive director, SBG and SBSA
    Key strengths: Senior management experience in multiple geographies; experience in a variety of corporate functions, including finance, IT, procurement and administration; strong ability to adapt to different environments. Appointed: 2017

    Responsibilities:

    *

    Board governance and performance, and shareholder engagement.

    #

    Leading the board performance appraisal of the chairman and advising the chairman on general board matters..

    ^

    Dealing with shareholders’ concerns where contact through the normal channels fails to resolve concerns, or where the chairman may be conflicted.

    Strategy and group performance.

    ø

    Group financial performance and reporting.

    Board meeting attendance

    Board meeting attendance.

    Non-executive directors provide independent and objective judgement. They challenge and monitor the executive directors’ delivery of strategy within the approval framework and risk appetite agreed by the board.

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    Group directors’ affairs committee (DAC)

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    Group audit committee (GAC)

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    Group risk and capital management committee (GRCMC)

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    Group technology and information committee (GTIC)

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    SBSA large exposure credit committee** (LEC)

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    Group model approval committee (GMAC)

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    Group remuneration committee (REMCO)

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    Group social and ethics committee (GSEC)

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    Committee chairman

    ** A sub-committee of The Standard Bank of South Africa.

    Our group executive committee

    Our experienced leadership team, which includes two executive members of the board, collaborates to deliver on our strategy, where progress is measured according to our strategic drivers.

    The complementary skills and diverse experience of group exco members strengthens the group’s ability to deliver the group’s strategy with specific focus on the five strategic value drivers.

    The board has delegated the management of the day-to-day business and affairs of the group to the group chief executive, with full power on behalf of and in the name of the group. The group chief executive is accountable for the implementation of the group strategy, and its performance, and is supported by the group executive committee (exco).

    Group exco is responsible for providing counsel to the group chief executive, acting as a sounding board and ensuring overall coordination across the universal financial services group, legal entities, and other key stakeholders. Ultimate decision-making powers remain vested with the group chief executive and all members of the committee exercise powers in accordance with their delegated authority.

    John Vice Photo
    1. SIM TSHABALALA
    Group chief executive, SBG, and executive director, SBSA
    BA, LLB (Rhodes), LLM (University of Notre Dame, USA), HDip Tax (Wits), AMP (Harvard)
    Lubin Wang Photo
    2. ARNO DAEHNKE
    Group financial director, SBG and executive director, SBSA
    BSc, MSc (UCT), PhD (Vienna University of Technology), MBA (Milpark), AMP (Wharton)
    John Vice Photo
    3. SOLA DAVID-BORHA
    Chief executive, Africa regions
    BSc Economics (University of Ibadan), MBA (University of Manchester), AMP (Harvard), GCP (IESE, Wharton, CEIBS)
    Rene Du preez Photo
    4. RENÉ DU PREEZ
    General counsel
    BProc (cum laude), LLB (cum laude), HDipTax (UJ)
    John Vice Photo
    5. KENNY FIHLA
    Chief executive, Corporate and Investment Banking (CIB)
    MSc (University of London), MBA (Wits)
    Lubin Wang Photo
    6. JÖRG FISCHER
    Head, group shared services and group real estate services
    BCom (Wits), Bachelor of Accountancy (Wits), CA (SA), Advanced Certificate in Taxation (UNISA), MIT Global Executive Academy (Cambridge, MA).
    John Vice Photo
    7. LUNGISA FUZILE
    Chief executive, SBSA
    MCom UKZN), AMP (Harvard)
    Lubin Wang Photo
    8. ISABEL LAWRENCE
    Group chief compliance and data officer
    BA (Hons), LLM (RAU)
    John Vice Photo
    9. ALPHEUS MANGALE
    Group chief information officer
    NDip Computer Systems Engineering (TUT), PG Management (Henley), EDP (CCL), AMP (Harvard)
    Lubin Wang Photo
    10. ZWELI MANYATHI
    Chief executive, Personal and Business Banking (PBB)
    BCom (Hons) (Unisa), PDP (New York), SEP (Wits & Harvard)
    John Vice Photo
    11. FUNEKA MONTJANE
    Chief executive, PBB South Africa
    BCom (Hons) (Wits), MCom (UJ), CA(SA)
    Lubin Wang Photo
    12. DAVID MUNRO
    Chief executive, Liberty
    BCom, PGDip Accounting (UCT), CA(SA), AMP (Harvard)
    John Vice Photo
    13. MARGARET NIENABER
    Chief executive, Wealth
    BCompt (Hons) (UFS), CA(SA)
    Lubin Wang Photo
    14. ROD POOLE
    Group head, change and business transformation
    BCom (Unisa)
    John Vice Photo
    15. THULANI SIBEKO
    Group head, marketing and communication
    BSc Bus Admin (California State University, USA), MBA (Henley), Graduate Certificate (Harvard)
    Lubin Wang Photo
    16. ZOLA STEPHEN
    Group secretary
    BProc, LLB (UKZN)
    John Vice Photo
    17. NEIL SURGEY1
    Group chief risk officer and group ethics officer
    BCom (UCT), AMP (Insead)
    Lubin Wang Photo
    18. SHARON TAYLOR
    Group head, human capital
    BCom (UKZN), BCom (Hons) (Unisa)
    Lubin Wang Photo
    19. GERT VOGEL
    Chief executive, SB International and CIB International
    BCom (UP), BCompt (Hons), MBL (UNISA), CA(SA)

    1

    Neil Surgey will be retiring from the group on 31 May 2019. He will be succeeded by David Hodnett.

    OUR GOVERNANCE FRAMEWORK

    Clear responsibilities for value protection and creation

    Our governance framework is integrated across the group and supports robust and defensible decision-making.

    It ensures the group delivers on its strategy within the appropriate risk appetite, supporting a prudent risk and return balance.
    Provides effective control to avoid financial loss or reputational damage due to misconduct and unethical behaviour.
    Enables us to do the right business the right way, ensuring the group operates through ethical and defensible business practices.
    Supports our legitimacy as a corporate citizen and is underpinned by advocating for an enabling business environment which contributes to national and regional objectives that support beneficial socioeconomic and environmental outcomes.

    The board serves as the focal point and custodian of the group’s corporate governance. It operates within a clearly defined governance framework. This allows the board to fulfil its oversight role, deliberate with executive management over strategy direction, financial goals, resource allocation and risk appetite, and ensure accountability.

    It outlines mechanisms for the group to implement robust governance practices while providing clear direction for decision-making across disciplines.

    The board has delegated certain functions to its committees, which allows the board to focus on matters reserved for its decision-making, while also ensuring that delegated matters receive in-depth focus.

    The group chief executive and the executive team deliver against agreed performance targets which are aligned to our strategy and is in the best interests of the group and its material stakeholders.

    The board monitors and holds the relevant executive accountable for the group’s operational and financial performance. Management is open and transparent with the board and escalates concerns to its attention in the appropriate forums and in a timeous manner.

    SBG BOARD

    Responsible for ethical and effective leadership of the group:

    • Steers and sets the strategic direction of the group.
    • Approves policy, resource allocation and capital planning.
    • Ensures accountability for the performance of the group.
    • Provides oversight to the implementation and execution of the strategy.
    Board committee
    Committee membership and meeting attendance
    Board committee purpose
    Group risk and capital management committee
    Myles Ruck (chairman)
    4/4
    Geraldine Fraser-Moleketi
    4/4
    Thulani Gcabashe
    4/4
    Hao Hu
    3/4
    Trix Kennealy
    4/4
    Jacko Maree
    4/4
    Nomgando Matyumza
    4/4
    Kgomotso Moroka
    4/4
    Peter Sullivan
    4/4
    John Vice
    4/4
    Lubin Wang1
    4/4
    • Provides independent and objective oversight of risk and capital management across the group.
    • Reviews and assesses the adequacy and effectiveness of the risk and capital management governance framework and that the associated standards and policies are clear, appropriate and effective.
    • Evaluates and agrees the nature and extent of opportunities and ensures discipline and control in managing the associated risks in pursuit of group strategic objectives.
    Group audit committee
    Trix Kennealy (chairman)
    8/8
    Nomgando Matyumza2
    2/2
    Martin Oduor-Otieno
    8/8
    Atedo Peterside con
    8/8
    Peter Sullivan
    8/8
    John Vice
    8/8
    • Monitors and reviews the adequacy and effectiveness of accounting policies, financial and other internal control systems and financial reporting processes.
    • Provides independent oversight of the group’s combined assurance functions, including reviews of the independence and effectiveness of external audit, internal audit and compliance.
    • Assesses compliance with applicable legal, regulatory and accounting standards and policies in the preparation of fairly presented financial statements and external reports.
    Group directors’ affairs committee
    Thulani Gcabashe (chairman)
    5/5
    Geraldine Fraser-Moleketi
    4/5
    Hao Hu
    4/5
    Kgomotso Moroka
    5/5
    André Parker
    5/5
    Myles Ruck
    5/5
    Lubin Wang1
    5/5
    • Determines the appropriate corporate governance structures and practices.
    • Establishes and maintains the board continuity programme.
    • Ensures compliance with all applicable laws, regulations and codes of conduct and practices.
    • Assesses and ensures the effectiveness of the board and its committees.
    Group social and ethics committee (GSEC)
    Kgomotso Moroka (chairman)
    4/4
    Geraldine Fraser-Moleketi
    3/4
    Lungisa Fuzile
    4/4
    Thulani Gcabashe
    4/4
    Jacko Maree
    4/4
    Martin Oduor-Otieno
    4/4
    Sim Tshabalala
    4/4
    • Ensures that social conscience is embedded in the way the group does business.
    • Ensures the development of appropriate policies relating to stakeholder and reputation management.
    • Guides and monitors the group’s social, ethical, economic, environmental, transformation and consumer relationship initiatives in line with relevant legislation, regulation, standards and codes.
    Group remuneration committee (Remco)
    Peter Sullivan (chairman)
    4/4
    Thulani Gcabashe
    4/4
    Trix Kennealy
    4/4
    Jacko Maree
    4/4
    Nomgando Matyumza
    3/4
    André Parker
    3/4
    Atedo Peterside con
    4/4
    • Assists the board to ensure fair and responsible remuneration.
    • Develops remuneration philosophy and policy in line with best practice and engages with key stakeholders in this regard.
    Group technology and information committee
    John Vice (chairman)
    4/4
    Arno Daehnke
    4/4
    Hao Hu
    3/4
    André Parker
    4/4
    Atedo Peterside con
    4/4
    Peter Sullivan
    4/4
    Sim Tshabalala
    4/4
    Lubin Wang1
    4/4
    • Ensures prudent governance of technology and information through the oversight of the governance of technology and information to support the group in achieving its strategic objectives.
    Group model approval committee
    Jacko Maree (chairman)
    3/3
    Arno Daehnke
    3/3
    Kenny Fihla
    3/3
    Zweli Manyathi3
    2/3
    Neil Surgey
    3/3
    Sim Tshabalala
    2/3
    • Assists the board in managing model risk according to the advanced internal ratings-based approach for measuring exposure to credit risk stipulated in the Banks Act.
    • Performs functions set out in the associated regulations, including inspecting risk evaluation models for its approval.

    1

    Alternate to Hao Hu.

    2

    Appointed on 14 August 2018.

    3

    Appointed on 1 April 2018.

    Effective governance of ethics – achieving an ethical culture

    The chairman and the board set the ethical tone for the group and collectively ensure that the conduct of the board and management aligns with the group’s values and code of ethics, to achieve the group’s strategy. This is measured as part of the board effectiveness assessment and the performance of the executives.

    Delivering good performance

    The board appreciates the interconnectedness between the group’s purpose, vision, values and legitimacy to its risks and opportunities, operating model and IT systems and performance. In approving the group’s strategy, it deliberates on these and considers progress on implementation of the strategy and that it is in line with group values and ensures the long-term success and sustainability of the group.

    During the year, the board held eight meetings, including its annual two-day strategy meeting. The chairman sets the board agenda, assisted by the group chief executive and the group secretary. Care is taken to ensure that the board has the appropriate time to consider matters critical to the group, including compliance, governance and administrative matters. Continuing board education sessions are scheduled a year in advance to ensure full board participation.

    Assessing the board’s effectiveness

    The effectiveness of the board and the board committees is assessed annually. Externally facilitated board and board committee evaluations are performed every two years and internal self-evaluations performed every alternate year. The 2018 board effectiveness review was externally facilitated. Topics covered in the review included strategic alignment, board composition, overall contribution and alignment of directors, board culture, relationship with management, and processes and practices of the board.

    Overall, the review concluded that the performance of the board and its committees were effective. The board is considered to be of high quality and wellfunctioning, comprising members of stature and experience. There is considerable support for both the chairman and the group chief executive. The culture of the board is seen to be healthy and robust, with strong level of trust between the board and management, as well as amongst non-executive directors. The board is satisfied that the evaluation process contributes to its performance and effectiveness.

    Assessing committee effectiveness

    The committee chairmen are accountable for the effective functioning of the committees. The assessment of board’s and committees’ compliance with the provisions of their respective mandates is conducted annually. For the board and committee mandates, the group’s external auditors conduct a limited assurance review against this assessment and in the period under review, the board is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference for the reporting period. The activities of the committees encompass the strategy and five strategic value drivers.

    Overall, the review concluded that the performance of the board and its committees were effective. The board is considered to be of high quality and wellfunctioning, comprising members of stature and experience. There is considerable support for both the chairman and the group chief executive. The culture of the board is seen to be healthy and robust, with strong level of trust between the board and management, as well as amongst non-executive directors. The board is satisfied that the evaluation process contributes to its performance and effectiveness.

    In addition to standard items on the board’s agenda, the 2018 focus areas included:

    • Political and economic medium-term outlook globally and in sub-Saharan Africa, including its impact on the group’s strategy.
    • Feedback from investors on the structure of the group, its performance relative to its peers, including strategy execution.
    • Considered the group’s relationships with clients, impact of digitisation on the future client, growing our technological capabilities and need to pursue innovation to better serve our clients, and delivering a seamless integrated financial services proposition.
    • Assessed progress made in aligning the group’s governance, planning, and reporting processes to the strategic value drivers.
    • Specifically considered the risk and conduct value drivers, ensuring that the group did the right business the right way.
    • Assessed the future-readiness of IT systems in relation to the group IT’s focus areas to 2020 and beyond and the group’s top priorities.

    Ensuring our legitimacy

    Relevance

    As a financial services organisation, our ability to innovate is critical to remaining relevant to our clients. The board is committed to ensuring the group remains agile in order to meet the changing needs of its customers and other stakeholders. The composition of the board was carefully reviewed to ensure we have the necessary skills to deliver on our strategy and leverage the opportunities that innovation presents.

    The board monitors and holds the management accountable for the group’s operational and financial performance. Management is open and transparent with the board and escalates concerns to its attention in the appropriate forums and in a timeous manner.

    Stakeholders

    The group’s stakeholder engagement activities are governed by the stakeholder engagement policy that sets out formal areas of responsibility. The GSEC oversees the approach to stakeholder engagement, especially regarding material social and ethics related matters relevant to our legitimacy and social relevance across our footprint. In 2018, GSEC approved the group stakeholder engagement guidelines for group subsidiaries. The guidelines recognised that stakeholder engagement capabilities differ across different jurisdictions and legal entities and have been aligned to the group’s values and code of ethics.

    Through our stakeholder engagement processes, the group is committed to understanding and being responsive to the interests and expectations of stakeholders and to partnering with them to find solutions to sustainability challenges.

    The committee also provides assurance to the board that the group’s conduct continues to be legitimate and socially relevant. Individual business units engage with stakeholders in ways that are appropriate to their particular areas. The board reviews material stakeholder engagements on a quarterly basis and provides guidance where necessary.

    Being a responsible corporate citizen

    The board oversees and monitors how the consequences of the group’s activities and outputs affect the group’s status as a responsible corporate citizen. This oversight and monitoring is performed against the strategic value drivers and impact on society, economy and environment.