Corporate SA has its say
• IAS Awards recognise the commitment of local companies to report clearly and consistently
With the local economy seemingly on a precipice, it is comforting to reflect on the country’s reputation of solid corporate governance and reporting. Strong corporate governance, however, is not a luxury but a non-negotiable term that enables SA Inc to increase its reach into international markets.
Thankfully, operating at these higher levels of accountability is not unfamiliar to local executives given the strong culture of corporate governance practiced within our borders. Which in no way implies it is easy or is taken lightly. For this reason, the Investment Analysts Society of SA (IAS) continues to promote transparency and accountability in corporate reporting and financial communications to the highest standards. The ultimate measure of meeting these standards is the outcome of the annual IAS Awards that recognises the commitment of companies to report clearly, consistently and subject their reporting to external scrutiny.
Organisation chair Chris Gilmour says the organisation’s role extends to helping to promote the education, skills and perspectives of its more than 1,500 members.
One way in which this is achieved is the IAS Journal that has grown to be one of the preeminent investment journals in the world. With more than 70% of the content contributed by international authors, the highly respected publication occupies an important place as a source of rigorous academic thought on investment themes.
Gilmour credits Professors Christo Auret and Robert Vivian of Wits University’s School of Economic & Business Sciences for the marked rise of the Journal’s reputation.
“These are the type of things the IAS needs to be concentrating on,” he says. “This includes being more relevant in terms of education. We’re trying hard to not just offer standard company results presentations but to present information on topics such as renewable energy, for example. And someone like Frans Cronje from the SA Institute of Race Relations is a regular presenter.”
For IAS members the focus is on trying to add value through all means possible. Tongaat Hulett CEO Peter Staude says it has been imperative for the company to remain consistent in its communication with the investment community.
“The company has had to adapt how it presents information to ensure members of the investment community receive clear and relevant information in real time,” he says. “For example, the ‘Land Portfolio’ document, which provides all the information relevant to Tongaat Hulett land conversion and development activities, is made available on the website at the same time that results are released, together with comprehensive supplementary up-to-date information on Tongaat Hulett.
“Documents including its integrated report and the information that is issued when results are released are used to explain the company’s strategy in a succinct, understandable manner. The objective remains that stakeholders clearly understand Tongaat Hulett’s business strategy, strategic positioning and prospects.”
Arno Daehnke, chief finance officer at Standard Bank Group, says his approach is to articulate the group’s strategy in the context of its purpose and vision. “We aim to provide a balanced view on the value created by the group for all stakeholders — customers, shareholders, employees and society as a whole.”
This approach is crucial to building improved understanding because, he says, “financial performance is no longer the yardstick for the overall value of a company. Environmental, social, corporate governance and reputation issues are increasingly important.”
He credits Standard Bank’s success in engaging with the investor community to providing an understanding of the market, trends and the impact of these on its business. This helps manage the narrative and answer investor questions.
“We include detail on our strategy in our annual integrated report and on our website. We also cover strategy in our discussions with investors,” he says.
The scenario for Tongaat Hulett and Standard Bank are vastly different to the challenges faced by a sector such as mining. Even though consumer confidence has taken a knock, and all of SA’s big banks suffered downgrades by the ratings agencies, their situation pales in comparison to the mining industry’s politically-loaded environment.
This is a factor that Implats’ group executive for corporate relations, Johan Theron, acknowledges. “The events in SA’s platinum sector over the past few years have highlighted the critical importance of developing and maintaining positive and profitable relationships,” he says. “The incidents before, during and after the 2014 five-month strike across the Rustenburg platinum belt, followed by sustained low metal prices, have resulted in a challenging investor climate.”
“It is vital Implats continues to share information and create an environment where stakeholders are informed, feel valued and are able to collaborate with company representatives. We have structured and prioritised strategic stakeholder engagement communication actions and projects across the group, based on internal stakeholder mapping and risk assessment intelligence.
“We are committed to providing accurate information on corporate strategies, trends and financial data and strive to keep investors and the market fully informed by timely disclosure of information.”