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| Corporate Responsibility Beyond The
Workplace |
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| CEO’s statement |
As part of the framework of South
Africa, Tiger Brands is committed to making a difference
to the lives of South Africans – people who are
our loyal consumers and communities that house our employees.
Our products and brand names have a very strong presence
with our consumers and are found in most homes at all
levels in our society.
We are committed to being involved in social investment
because we believe it is the right thing to do; we are
also committed to behaving as a responsible group on
issues such as our people practices, environmental policies
and corporate governance.
As a food and healthcare company with manufacturing
units countrywide, we are aware of the challenges we
face across most of our provinces.
We actively align ourselves with government initiatives
and play a supportive role in communities. Sustainability
issues are always considered within the overarching
Tiger Brands vision and corporate purpose: ‘to
be the world’s most admired branded consumer packaged
goods and healthcare company in emerging markets’
by ‘adding value to life’.
Our goal is to work towards sustainable livelihoods
by reducing dependency on welfare and encouraging a
vision of a future that invites our people to move ‘beyond
2010’.
To find out more on sustainability and triple bottomline
reporting in Tiger Brands, contact: ian.isdale@tigerbrands.com;
on transformation and human resources: matsie.matooane@tigerbrands.com;
on corporate governance, risk and environmental
policies: ian.isdale@tigerbrands.com;
and on corporate social investment: jimmy.manyi@tigerbrands.com. |
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| Nick Dennis,
Chief executive officer |
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| Investing
in the development of talent – our graduates. |
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| Human Resources |
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| Our purpose/mission as an employer |
In everything we do, we seek to add
value to life – to our shareholders, employees,
customers, consumers, and communities’ lives.
We are in the process of understanding what “adding
value to life” means for our employees. They will
tell us what we consistently need to do to continue
adding value to their lives. Our employees drive value
for the rest of our stakeholders, therefore we need
to consistently add value to their lives to deliver
on our mission.
Our participation in branded consumer and pharmaceutical
products affords our employees enormous opportunities
to support communities and positively affect many lives.
We continue to grow, both organically and through acquisitions.
There are many career and synergy opportunities presented
by this growth. Our employees can move across categories,
functions and industries within the group. |
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| Our People strategy |
We have concluded the crafting of
our People strategy to take us beyond 2010. Our goal
is to be the most admired employer in the branded consumer
packaged goods and healthcare industries in our chosen
geographies.
This will be achieved through: |
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Building and revitalising organisation-wide
capability for change |
| • |
Investment in the development
of talent |
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Continued simplification of
our management processes and systems |
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Fostering a people-centric
high- performance culture |
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| What we value as an organisation |
| As employees of Tiger, we value: |
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Respect |
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Action orientation |
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Teamwork; and |
| • |
Imagination |
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| To ensure that these are not just
words, there is a 360° evaluation process to periodically
assess how we are doing in living out these values. |
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| Talent management and leadership
development |
One of our core capabilities is developing
great brands. We have consistently delivered good financial
results over a sustained period. It is all because we
have highly talented people in Tiger.
Just as we review business performance and measure market
share, we bring the same discipline to reviewing organisational
talent. We have identified key positions and track the
pipeline available to fill them. The group executive
annually commits two consecutive days to this review
process.
Our people development and internal recruitment and
promotion initiatives are aligned to talent management. |
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| Sharing the wealth |
As part of the broader transformation
agenda we decided on a two-step approach to achieving
broad-based black economic empowerment. To this end
our first ownership transaction in 2005 was exclusively
for our employees. Over six million shares were purchased
to implement this Employee Share Ownership programme.
All our employees are now Tiger shareholders.
The first phase of the BEE share ownership transaction
was used to empower our staff, irrespective of race
or gender. In November 2005, a total of 50 free shares
were allocated to each of our employees who normally
would not qualify for participation in the share option
scheme, and who are not black managers.
The bulk of the remaining shares are held by the Black
Managers’ Trust. In November 2005, black managers
in junior, middle and senior management positions were
allocated shares using predetermined multiples. Allocations
to newly appointed black managers are made in January
and July of each year. When current incumbents are promoted,
appropriate top-up allocations will be made. To date,
52% of these shares have been allocated.
The management team participates in a normal cash settled
share option scheme on the basis of attracting and retaining
key talent. |
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| Remuneration practices |
With the conversion in October 2005
of the guaranteed pay component to Total Remuneration
Package, we are now in a better position to pursue internal
and external benchmarking.
As our performance management system matures and improves,
we are beginning to gradually introduce performance-based
differentiation.
Our variable pay instruments, such as the short-term
profit incentive scheme and the long-term incentive
programme, are well entrenched. In keeping with the
dynamic market conditions, we will periodically review
them for continued relevance and alignment with best
practice. |
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| Medical aid |
We have an in-house medical scheme
for our employees and pensioners. The scheme has 6 000
principal members and 13 000 beneficiaries. These members
and their dependants have access to cost-effective comprehensive
health cover.
Access to the Medical Scheme is open to all employees
but affordability remains a barrier for some. We eagerly
await legislation enabling the development of a low-cost
medical scheme that will make private healthcare accessible
to all our employees. It is expected that this legislation
will be developed and passed during 2007/2008. |
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| Retirement funds |
On appointment our employees are
offered a choice of joining either the Tiger Brands
Workers Provident Fund or Tiger Brands Defined Contribution
Pension Fund. Employees, who are eligible, also have
the Tiger Brands Management Provident Fund as an option.
Eligibility for joining the Tiger Brands Management
Provident Fund is dependent on the employee being in
a management position, at Patterson band level D or
above. Should an employee be promoted into a management
position, the employee has the option of transferring
into this fund.
The contribution rates of these funds compare favourably
with those being paid in the industry. Each fund offers
risk benefits, as determined by the boards of trustees
of these funds, taking affordability into consideration. |
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| Our
ABET programme continues to grow steadily –
Albany bakery, Pretoria. |
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| Some important statistics |
As one of the larger corporations
in our country, we have created sustainable employment
for around 14 000 employees on a permanent basis. Additionally
we engage a substantial number of job seekers on a seasonal
basis as dictated to by different industries in which
we participate. For the current financial year, 2006,
our total salary and wage bill is approximately R2 billion.
This is a significant contribution to sustainable nation
building.
The composition of our staff is as follows: |
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African |
Indian |
Coloured |
White |
Disabled |
Permanent |
Temp |
Total |
| 2006 |
7
733 |
960 |
2
591 |
2
092 |
45 |
13
421 |
4
257** |
17
678 |
| 2005* |
7
756 |
969 |
2
690 |
2
260 |
47 |
13
722 |
3
042 |
16
764 |
| 2004 |
8
223 |
1
235 |
3
121 |
2
989 |
72 |
15
640 |
2
947 |
18
587 |
| 2003 |
8
730 |
1
473 |
3
622 |
3
024 |
83 |
16
932 |
3
146 |
20
078 |
| 2002 |
6
764 |
1
399 |
3
496 |
2
635 |
52 |
14
346 |
3
099 |
17
445 |
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| Notes: *SPAR unbundling,
**Combined Langeberg and Ashton Foods (seasonal business). |
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The ratio in terms of permanent positions
versus temporary staff and casuals has consistently
been approximately 5:1 over the previous four years,
dropping to 3:1 in the year under review.
With respect to the number of employees with disabilities,
the trend, as a percentage of headcount, is stable.
People with disabilities as a % of total permanent headcount: |
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| Year |
Actual
number |
%
of total headcount |
| 2006 |
45 |
0,3% |
| 2005 |
47 |
0,3% |
| 2004 |
72 |
0,5% |
| 2003 |
83 |
0,5% |
| 2002 |
52 |
0,4% |
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| Our gender track record |
| Women constitute about 52% of the
total national population. Our transformation agenda
includes the gender issue. We will continue to focus
on senior and executive levels, without neglecting the
junior and middle management levels. Our performance
to date is as follows: |
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Executive |
Senior |
Middle |
Junior |
| 2006 |
13% |
12% |
31% |
33% |
| 2005 |
10% |
13% |
30% |
35% |
| 2004 |
— |
12% |
28% |
32% |
| 2003 |
— |
7% |
27% |
37% |
| 2002 |
— |
6% |
24% |
34% |
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| Our black management talent |
| In this current environment where
it is a challenge to retain management talent, particularly
black managers, we have been able to grow steadily.
This was achieved notwithstanding our headcount movement
within the five-year period. Our black managers are
represented across various management levels as per
the table below: |
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Executive |
Senior |
Middle |
Junior |
| 2006 |
13% |
18% |
29% |
43% |
| 2005 |
10% |
9% |
27% |
42% |
| 2004 |
0% |
10% |
25% |
39% |
| 2003 |
0% |
8% |
23% |
41% |
| 2002 |
0% |
8% |
24% |
42% |
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| As we had not been particularly successful
at attracting and retaining black people at senior management
level, we created the senior affirmative action fund.
This fund is financing both senior and executive-level
appointments. Where necessary, we will distort the organisational
structure to ensure meaningful engagement of these senior
appointments. To date, we have brought in 26 black people
at various management levels as reflected below: |
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| Level |
2005 |
2006 |
| F
Band (Exec) |
1 |
1 |
| E
Band (Senior) |
6 |
3 |
| D
Band (Middle) |
11 |
4 |
| Total
(Cumulative) |
18 |
26 |
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Of the 26, we regrettably lost two
E-band and two D-band-level appointments, thus retaining
22.
The trend in our turnover statistics over the five-year
period suggests that our focus on attracting and retaining
staff is succeeding. In 2002, the overall turnover figure
was 7,7, opposed to 5,5 in 2003, 5,9 in 2004, 5,8 in
2005 and 6,3 for 2006. |
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| Employee rights and relations |
We have a Code of Ethics which is
broadly communicated and shared. We are in the process
of reviewing it to ensure compliance with best practice.
All new employees are given a copy thereof before their
start date. This Code governs our relationships with
each other, as well as with our customers, suppliers,
competitors and communities.
Our employees enjoy freedom of association. To that
extent we have in the broader Tiger family, 15 unions
recognised and operating at the various sites.
We have a well-established workplace culture creation
and continuous improvement process which was introduced
in our manufacturing units around 2000. It was introduced
as part of the supply chain strategy to support our
overall continuous improvement strategy. The importance
of this process is that it facilitates improved communication
of goals, standards and values to be upheld by all,
and fosters a sense of community.
We continue to make good progress in the rollout of
the process as indicated below. Of the 54 sites, 71%
have completed the culture Invocom creation process
(Involvement & Communication), and 69% have gone
a step further and are implementing the continuous improvement
programme (20 Keys): |
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Sites
which
completed InvoCom implementation |
Sites
implementing 20 Keys |
| 2003 |
22% |
39% |
| 2004 |
45% |
39% |
| 2005 |
57% |
55% |
| 2006 |
71% |
69% |
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| As all our employees are now shareholders,
the Tiger share performance is tracked on a daily basis
and communicated during the InvoComs in most of the
units, in the same manner as productivity is tracked. |
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| People development |
In 2005 we launched the Tiger Brands
Academy (TBA), our in-house learning institution. Our
main intention with the creation of the TBA is to build
organisational capability by empowering employees with
portable cross-functional skills. The spinoff is a huge
contribution to national skills development, given the
number of our employees and the quality of the learning
programmes.
When fully functional, the TBA will have nine academies.
Currently six are operational. These are the Customer;
Marketing; Leadership; Manufacturing; Pharma and IT
academies. Each academy has a menu of training programmes
that reflect the core competencies of that particular
function. Our employees attend learning modules of their
choice, as long as the learning area was identified
as one that needed development in their personal development
plan.
To date, the TBA has performed as follows: |
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| Academy |
Number
of learners |
| Customer |
68 |
| IT |
193 |
| Leadership |
78 |
| Manufacturing |
319 |
| Marketing |
84 |
| Pharma |
61 |
| Total |
803 |
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The TBA is not linked to any academic
institution. All the programmes offered are tailor-made
for our specific environment and requirements. The learning
programmes are provided by both internal facilitators
and external providers. All external providers are subjected
to a rigorous preferred provider process for quality
assurance purposes.
Additionally, we support the National Human Resources
Development programme by hosting 34 students on the
SETA-based Workplace Experience Programme. A further
159 employees are on the Core Skills Programme.
Our Adult Basic Education and Training (ABET) programme
– based on literacy and numeracy – continues
to grow steadily. A total of 115 employees completed
the programme last year. We currently have 710 learners
on the programme, at different levels – from basic
orientation (BO) to level 4 – as per the table
below: |
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| Tiger
Brands ABET Programme |
Active
Learners |
Literacy |
Numeracy |
| BO |
1 |
2 |
3 |
4 |
BO |
1 |
2 |
3 |
4 |
| 710 |
12 |
171 |
188 |
187 |
121 |
2 |
7 |
11 |
9 |
2 |
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| Employee wellness |
In 2006 we piloted a comprehensive
wellness programme which focuses on three key streams:
emotional, physical and financial health. We prefer
this approach because we believe that when employees
are holistically cared for they perform better and deliver
sustained results.
Some of the topics covered under emotional health include
coping with conflict, managing change, stress awareness
and understanding and working with different personality
types.
Under physical health, various types of tests, including
blood pressure, eye, cholesterol and glucose, are conducted
for interested employees. We further offer Primary Care
and Occupational Health Care to our employees via an
on-site clinic system for employees at the manufacturing
sites. These services are offered free of charge to
all employees, irrespective of whether they are on a
permanent or temporary contract.
We continue our HIV/Aids support programme at all sites
especially for employees not on medical aid. In 2006
we rolled out further awareness sessions and opportunities
for voluntary counselling and testing. Just over half
the sites have already been visited, with the remainder
to be completed before the end of the year. Of the sites
visited, a total of 944 employees were counselled and
tested. The results indicate a prevalence rate of 6,14%.
Employees testing positive, go for regular monitoring
and are provided immune boosting supplements. Antiretroviral
treatment is not provided as employees on medical aid
are able to access ARVs through the medial aid, and
employees not on medical aid have access through provincial
clinics. We will continually review this approach and
take appropriate action as necessary. |
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| Health and safety |
| As a food and healthcare company,
the health and safety of our employees and the end consumer
of our products is important to us. As a minimum all
our operating sites have Health and Safety committees.
Aspects of health and safety form part of the culture
creation and continuous improvement process referred
to under Employee rights and relations. We also have
an external body auditing our performance on a regular
basis. The audit results are shared not only with the
executive team but also with the risk committee. |
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As
a responsible organisation, our objective is to
find ways to give back to our
communities and country as a whole – Beacon
day for Heartbeat. |
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| BBBEE and transformation reporting
framework |
Broad-based black economic empowerment
(BBBEE) is a national imperative that we align ourselves
with. When the final version of the Codes is promulgated,
there is expected to be an initial 12-month period within
which all participating companies will be required to
undergo a verification process and be issued with a
formal BEE rating.
We are continuing with transformation efforts in the
directions indicated by the draft Codes and will undergo
verification within the required period. Since 2005
we have been using the draft Codes to measure our performance.
Our employee share ownership transaction implemented
in October 2005 was the first phase in the BBBEE participation.
Plans are under way to effect the second phase.
We are making steady progress in management control
both with board appointments and the appointment of
senior black people in group executive positions.
Employment equity and skills development are part of
our business operations and have been the focus over
many years. The sections on employee composition and
people development expanded on our performance to date.
Enterprise Development is a category where recognition
is given for efforts of the group towards the creation
or further strengthening of enterprises to increase
economic activity, and thereby increase employment opportunities.
We have a number of initiatives in this arena. We have
chosen to focus on projects where the buying power of
the group or its market reach can be used to develop
opportunities for entrepreneurs.
One example is the Emergent Tomato farmers in Limpopo
province.
We are a major purchaser of tomatoes as input to our
manufacturing operations. Common problems amongst emergent
farmers are: |
| a) |
Access to finance |
| b) |
Need for technical advice and
assistance in farming activities |
| c) |
Access to reliable markets
for product. |
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We have a scheme operating in the
Limpopo province where selected emergent farmers are
provided with loan finance for seedlings, and are supported
by regular visits by our agronomists. We undertake to
buy their full estimated crop at a guaranteed price,
although the farmers are not obliged to sell to the
group. Our undertaking is by way of an underlying guarantee
against which further operating finance can be obtained
from commercial institutions if desired.
The scheme has been running over the last two seasons.
Currently there are 30 individual emergent farmers and
three collectives who are supported by the scheme. Based
on the success of this initiative, we are currently
considering other agricultural inputs for similar initiatives. |