Review from the chairperson of the SED committee

SED spend of budget was spent on education and skills development
	Lynda Chalker

Many communities in South Africa and in the rest of Africa are subject to extreme poverty. Group Five remains committed to effective socio-economic development as a means to contribute to the upliftment of disadvantaged communities through structured programmes.

Group Five’s business model, as outlined on page 4, places sustainability issues at the centre of the business’ strategy and ensures an integrated approach to manage these aspects. To be successful and sustainable, our work in socio-economic development must be both relevant to Group Five and contribute meaningfully to the advancement of the societies in which we operate.

The role of the socio-economic development (SED) committee of the board is to guide the group’s social responsibility activities to ensure their continuing success against both of these parameters. The committee provides strategic direction to management in terms of SED. It formulates and implements policy, approves the budget, evaluates the effectiveness of interventions and ensures centralised reporting.

Within our SED framework, we seek to allocate 55% of spend to education and skills development, 35% to economic development and 10% to social grants and programmes. Even in these difficult economic times, during the year we spent R6,1 million, which is more than the 1% spend of net profit after tax required by the dti Code of Good Practice.

To ensure effective impact, we analyse community needs and the potential involvement of key stakeholders before investing in initiatives. Our charter is to focus on education and the transfer of skills which empower beneficiaries to take control of their future.

Achieving our objective of creating programmes which have a sustainable impact requires more intervention than simply providing once-off grants or donations. It requires us to partner with beneficiaries to strengthen governance and increase capacity in grass roots organisations which are often informally structured to ensure they report back to the board regularly on progress through the SED committee. It also requires us to monitor beneficiaries to ensure that resources are not concentrated in selected projects separately funded by multiple organisations.

However, due to economic challenges in South Africa following the global downturn, the group received a significant increase in applications for emergency social grants. Although we believe that social grants do not create sustainability in the long term, due to the pressure during this time on the most vulnerable of society, we made a conscious decision to temporarily veer away from our long term SED strategy to provide urgent, short term relief to a number of charities. The group also launched an employee assistance programme to support the group’s HIV/Aids programme. These programmes were both funded as social spend under the SED programme in line with the dti Code of Good Practice and the Construction Charter. This led to a 38% spend on social grants compared to the 10% target.

We remain committed to our strategy of creating meaningful impact and long term sustainability. In the new year we will therefore strongly drive alignment to meet this target.

• Employee engagement

  Over the past year, the group has progressed in terms of involving a broader base of employees in the group’s SED initiatives. Employee engagement was encouraged in a number of ways, including:

  	Allowing employees time during their normal working hours to be involved in various group community programmes
  	Promoting skills transfer and mentoring of community organisations and emerging enterprises

  In line with increasing our focus on employee engagement, we have improved our communication of SED programmes to stakeholders. Our website was significantly upgraded with disclosure on community investment and we have worked on raising awareness about the group’s programmes to all stakeholders. However, we have a lot more to do around this.

  As Group Five’s expansion continues beyond South Africa into the rest of Africa, the Middle East and Eastern Europe, we will operate in regions with diverse development priorities. Our SED programmes are a vital offering with this expansion. To remain relevant, our socioeconomic development will adapt to local requirements and sustainability objectives. We have a clear strategy in place for this.

• Focus areas

  During the year, we achieved a number of impacts in the three areas of our SED focus.

  Education and skills development programmes

  Supporting skills in mathematics and science

  The lack of essential maths and science skills is one of the major obstacles to economic growth in South Africa. As such, Group Five has responded to the request by the South African government to industry to support the New Economic Growth Path (NEGP). The NEGP was launched in November 2010 and aims to develop at least 30 000 additional technicians/engineers by 2014 and 50 000 new artisans by 2015. Support for the NEGP is critical in underpinning future growth for Group Five as the skills targeted through the programme are essential for the successful development of our industry.

  Projects undertaken by the group in this area include:

  	Sponsorship of TRAC mobile science laboratories. These have supported over ten schools with no access to traditional laboratories or basic equipment
  	Assistance in maths and education support to over 500 learners in five schools through the Dinaledi schools programme
  	Financial and curriculum improvement support to two further education and training (FET) colleges in Gauteng and Western Cape
  	The sponsorship of technical laboratories at the University of the Witwatersrand
  	The sponsorship of the Women in Engineering and the Built Environment programme at the University of Johannesburg. Through this initiative the university has seen a marked increase of young women enrolling in engineering and construction-related studies

  People at the Gate

  Unemployment and lack of skills continue to plague many communities. The group launched a unique industry initiative in 2006 called “People at the Gate” with the aim of training unskilled people arriving at construction sites in search of employment. The programme has been very successful, with over 90% of individuals trained attaining employment.

  Economic empowerment

  Our long term aim in this area is to drive independence in communities through skills transfer and creation of sustainable employment, particularly for women and the youth. As outlined, the group over-spent on its social grant component of the budget, which affected our economic spend during the year. This led to a 9% actual economic spend versus a 35% target. This will receive urgent attention in F2012.

  Social support

  As outlined, a huge increase in requests for emergency grants was seen during the year. The business units and the group felt it necessary to assist a number of worthy causes. Refer to page 65 on the CD contained within this integrated report for more information.

  A key impact in terms of our social support is our employee HIV/Aids programme. Over the last two years, the group rolled out awareness counselling and testing (ACT) programmes to ensure that at least 80% of our employees in South Africa know their HIV status over a two-year period and can take the necessary measures to combat this disease. The group’s employee assistance programme also extends to victims of HIV/Aids in various communities, which will make a big difference to employees and family members living with HIV and Aids.

• Future focus

  In F2012, the committee will build on the progress made in previous years. Particular focus areas will be:

  	Skills development and the support of entrepreneurial projects that will empower communities to sustain themselves
  	Support for mathematics and science education in selected schools to contribute towards building a pool of quality matriculants who are able to enroll for further studies in tertiary institutions
  	Gender transformation and economic empowerment programmes
  	Meaningful SED programmes in the various African countries in which Group Five operates
  	To sustain and grow the engagement and involvement of employees in SED projects
  	To enhance the impact of our SED programmes through improved governance and the more efficient management of SED initiatives and resources
  	Closer monitoring and guidance to business units to ensure alignment and spend within the key focus areas of our SED strategy and the targeted spend
  	Further communication of SED programmes to ensure external stakeholders understand the group’s strategy

• Appreciation

  I thank all the members of the SED committee of Group Five for their guidance and assistance in achieving these vital goals and to all the employees of Group Five for their continuing involvement in these efforts. A great deal still has to be done to continue to work meaningfully with the communities in our areas of operations. I look forward to enabling further changes through our SED implementation during the coming year.

  Baroness L (Lynda) Chalker
  Non-executive chairperson of the SED committee

  5 August 2011