TRANSFORMATION AND CORPORATE SOCIAL INVESTMENT
TRANSFORMATION
The board recognises the critical role it has to play in the transformation process and through the transformation committee ensures that an appropriate transformation strategy exists that is aligned to the DTI’s Broad-Based Black Economic Empowerment Act of 2003 (BBBEE) and the associated codes of good practice.
TRANSFORMATION STRATEGY
The aim of the Transformation Committee is to achieve sustainable empowerment through alignment with the seven elements of the BBBEE code being: ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development.
Clear guidelines have been defined for each of the seven elements of BBBEE, and the committee has an ongoing responsibility to monitor and review all aspects of the group’s BBBEE strategies and to ensure the achievement of its targets. In order to attain these targets, sub-committees for each of the seven elements of BBBEE have been established, with meetings taking place at least quarterly.
TRANSFORMATION TARGETS
In November 2009 (based on information in respect of the year ended 31 March 2009) Foschini was rated a level five contributor by Empowerdex, an accredited economic empowerment rating agency. The target is to reach level four contributor status in 2012.
CURRENT PERFORMANCE
The total score achieved in respect of the 2009 year was 55,1 points (level 5) aiming to reach level 4 by 2012.
EQUITY OWNERSHIP
In respect of 2009, Foschini scored zero points out of a maximum of 20. The transformation strategy is built on the assumption that a BBBEE ownership scheme is put in place during 2012.
MANAGEMENT CONTROL
In respect of 2009, Foschini scored 4,8 out of a maximum of 10 points which is indicative of the representivity achieved through securing black non-executive directors and senior executives by a continued focus on diversity in the succession planning and talent management processes. The board is satisfied with the progress being made in this area and the 2012 target is a score of 5,6.
|
2012 |
||
| BBEE element | Maximum | Target |
| Direct empowerment | ||
| Ownership | 20 | 10,0 |
| Management control | 10 | 5,6 |
| Indirect empowerment | ||
| Employment equity | 15 | 8,5 |
| Skills development | 15 | 11,0 |
| Preferential procurement | 20 | 17,5 |
| Enterprise development | 15 | 14,0 |
| Socio-economic development | 5 | 5,0 |
| Total | 100 | 71,6 |
| BBBEE recognition level contributor | Level 4 |
| Male | Female | Foreign | Grand
total |
||||||||
| Occupational level | A | B | C |
W |
A | B | C | W | M | F | |
| Top management | 8 | 1 | 1 | 10 | |||||||
| Senior management | 3 | 1 | 10 | 70 | 1 | 3 | 63 | 151 | |||
| Professional middle management | 16 | 30 | 71 | 134 | 32 | 26 | 100 | 301 | 7 | 3 | 720 |
| Skilled, junior management, supervisor | 41 | 241 | 206 | 77 | 188 | 598 | 781 | 571 | 1 | 15 | 2 719 |
| Semi-skilled | 104 | 1 476 | 763 | 78 | 501 | 4 763 | 2 724 | 408 | 1 | 9 | 10 827 |
| Unskilled | 1 | 28 | 52 | 2 | 1 | 13 | 76 | 3 | 1 | 177 | |
| Grand total | 165 | 1 776 | 1 102 | 369 | 724 | 5 400 | 3 684 | 1 347 | 10 | 27 | 14 604 |
EMPLOYMENT EQUITY
In respect of 2009, Foschini achieved 6,6 points out of a maximum of 15. The target for 2012 is 8,5 points. Whilst employment equity and diversity are embedded into succession planning, talent management and recruitment, black representation at senior management level remains an ongoing challenge. Foschini’s strategy of choice is to develop from within and it thus takes time to achieve transformation at senior management level.
SKILLS DEVELOPMENT
Foschini achieved a score of 6,6 points out of a maximum of 15 in 2009. The target for 2012 is 11,0. Effort is being placed in ensuring the learning and development of staff through Project 700 which will be launched in the new year and which aims to train 700 sales associates.
PREFERENTIAL PROCUREMENT
Foschini achieved a score of 17,5 points out of a maximum of 20 and is particularly pleased with the progress that has been made in this area through an ongoing focus on the supply base. The target for 2012 remains at 17,5 points.
ENTERPRISE DEVELOPMENT
Foschini achieved a score of 14,6 points out of a maximum of 15 in 2009 again reflecting the commitment that has been made to ensure development of our supply base. The target for 2012 is 14,0 points.
One of the focus areas of the group’s efforts to promote enterprise development has been through assisting small-scale entrepreneurs to become sustainable suppliers to the local retail industry and thereby addressing the inequalities of the past by focusing on BBBEE. The investment in the development of New Coe Knits, quality knitwear producers in the Western Cape, is an inspiring example of a project that achieves these objectives, facilitating job creation, building a sustainable model, while also reducing lead times in the supply chain. In 2007 the group began assisting the promising, yet financially constrained small enterprise, in the areas of design, production planning, sales, human resources, compliance and finance. The project was launched in exact! and in 2008 new high-tech machinery and larger premises were provided, to enable expansion to include Foschini and fashíonexpress. Average deliveries to the group have increased from an initial 4 000 units per month produced by 12 people with a lead time of 10 weeks, to 22 000 units produced by 70 staff members with a lead time of four weeks. In addition, the group currently undertakes all yarn purchases on behalf of New Coe Knits, with additional cost benefits. The enterprise has become an important player in the industry and yarn deliveries are more consistent.
The group's production facility, TFGA, is also actively involved with production planning and other manufacturing activities.
SOCIO-ECONOMIC DEVELOPMENT
Foschini achieved the maximum score of 5,0 points on this element for 2009 and this remains the target for 2012. The CSI section later in this report provides an overview of the effort that is being made in this area.
FOCUS AREAS TO ACHIEVE 2012 TARGET
In order to ensure that the 2012 target is achievable, focus is being placed on:
- equity ownership deal;
- ongoing focus on employment equity; and
- Project 700 to ensure that targets in respect of skills development are achieved.
CORPORATE SOCIAL INVESTMENT
The Foschini group recognises its responsibility as a corporate citizen towards making a contribution to the economic and social development of South Africa. Through the group’s CSI initiatives, various projects are undertaken for the benefit of the group’s employees, customers and the communities within which it operates.
APPROACH TO CSI
Foschini has a single corporate social investment (CSI) strategy for the group, which strives to ensure meaningful changes to people’s lives, create a culture of corporate responsibility and ultimately enhance the Foschini brand and reputation. As demonstrated by the integrated reporting approach taken this year, sustainability issues are integrated as part of core business strategy. The group’s CSI activities are just one element of its sustainability performance.
The group's CSI initiatives are co-ordinated by the group CSI department and aim to benefit employees, customers and the communities within which the group operates. The predominance of women among the group’s employees and customers motivates an emphasis on directing CSI contributions primarily towards women and children, the more marginalised and vulnerable members of society, with consideration also being given to the disabled.
Foschini's CSI activities are funded through the Foschini Foundation, an independent charitable organisation established in 2006, which draws its funds from group resources and direct donations from staff members.
Collectively, the group invested in over 40 projects during the current financial year, the emphasis being on ensuring quality rather than quantity. Whilst the group does not currently undertake a social impact assessment of its CSI initiatives, the group seeks to ensure the sustainability of projects by providing funding to relevant organisations for three years at a time.
CSI FOCUS AREAS
CSI funds from the Foschini Foundation were allocated during the year as follows:
CSI focus area funding
CSI expenditure is allocated through Focus Area Funding and Special Project Funding.
- Focus Area Funding involves making direct donations to NPOs or NGOs that meet the group's due diligence and general criteria, for the sponsorship of projects associated with the four focus areas of the group’s CSI strategy: education, skills development, arts/culture and environment, and HIV/AIDS. A brief description of key projects supported in these areas is provided later in this section.
- The group seeks to be involved in the conceptualisation, development and execution of its own CSI projects. The Special Project Funding provides for these “special projects”, which seek to involve the group’s customers and employees in promoting issues of particular significance to these stakeholder groups.
WORKING TOGETHER ON CSI
The group actively encourages a culture of philanthropy and community involvement amongst its employees and business partners and CSI activities are conducted as a team effort. The group CSI department works with employees in the trading and service divisions, to help maximise the effectiveness of their individual projects, which are incentivised. As part of the “Staff community builder” programme, launched in 2004, the group provides Rand-for-Rand grants to staff members who volunteer for community work in their spare time.
Individual trading and service division projects also receive Rand-for-Rand support.
PROJECTS SUPPORTED BY THE GROUP
Following is a brief summary of a few key projects supported by the Foschini group during the review period:
Focus area projects
Sponsoring quality education
As part of the group's ongoing efforts to sponsor projects that promote quality education in South Africa, this year R200 000 a year for three years was committed to TREE, an organisation that specialises in providing quality early childhood development (ECD) training, which forms the basis of future learning around literacy, numeracy, mathematics and science education. These funds will help to develop ten community-based ECD sites in Ixopo, KwaZulu-Natal.
Other beneficiaries include the Rural Education Project (through the University of Cape Town’s Schools Development Unit), the Western Cape Primary Science Programme, LEAP Science and Maths School and ORT-TEch South Africa.
Promoting arts/culture and environment
The group has committed funding of R180 000 a year for three years (2009 – 2011) to the iKAPA Dance Theatre, an innovative dance company which uses dance as a medium to inspire, train and mentor the youth. The group’s funds have enabled iKAPA’s Outreach arm, Imbewu yeKapa School of Arts, which takes dance to children and young adults in previously disadvantaged neighbourhoods around Cape Town, to increase its number of students to 300 in seven different outreach centres.
Supporting efforts to manage HIV/AIDS
The group is a longstanding contributor to under-resourced programmes aimed at
managing HIV/AIDS in South African communities. The group has committed R540 000 over three years (2009 – 2011) to Ikamvu Labantu, an organisation that supports orphans and vulnerable children affected and infected by HIV. Interventions and activities are designed to ensure that these children receive adequate care within their own communities. Providing home-based care and specific support for child-headed households is an important need within the HIV environment, especially in light of the limited access to health care and the growing number of AIDS orphans in South Africa.
Promoting skills development
A focus of the group's efforts to promote skills development, job creation and entrepreneurship, is the commitment
to provide R300 000 a year, over three years, towards the Indigenous Trees for Life enterprise development programme, operated by the NGO Wildlands Conservation Trust. This “tree-preneur” project involves training members of poor and vulnerable communities as facilitators to teach communities how to grow indigenous plant seedlings. These seedlings are then traded back to Wildlands for food, clothes, bicycles, agricultural goods and tools, school and university fees. The programme equips facilitators with additional entrepreneurial skills, to help them to start their own businesses, or help the tree-preneurs with such opportunities.
Other beneficiary organisations include The Big Issue, Lifeline/Childline and The WHEAT Trust.
The Foschini Foundation
The Foschini Foundation was registered as an independent charitable organisation in August 2006, with an initial capital base provided by the group. The foundation’s current trustees are A D Murray (executive director) and D M Nurek (independent non-executive director). Investments under the foundation’s control are valued at R85,1 million this year, up from R62 million last year due to a strong market. The foundation’s investment income is distributed as donations to selected charitable causes.
The foundation made donations amounting to over R4,5 million during the year. Merchandise donations for the benefit of The Feel Good Project aimed at promoting skills development totalled R22,6 million. Additional donations to the value of R863 529 were made by various divisions of the group in cash, sundry equipment, merchandise and services. Of their own volition and from their own resources, staff members and business partners of the group contributed an additional R17 640.
Special projects
The Feel Good Project
The Feel Good Project is a pioneering skills development and job creation initiative launched by the group over a year ago in partnership with the NPO, Learn to Earn. The project centres around a retail shop, The Feel Good Store, located in Claremont, Cape Town. The shop stocks reconditioned customer returns, as well as limited samples, rejects and overruns from the various Foschini group brands. Previously unemployed people are enrolled in the project as trainees,
to work and learn skills relevant to the retail supply chain. All proceeds from the shop are reinvested in the project, which is proving to be a sustainable model for success. In addition to the retail shop, there is also a warehousing and production component to the project, ensuring that trainees acquire diverse skills, to enhance their chances of securing employment.
In addition to the start-up capital, the group donated customer returns comprising men’s, ladies’ and children’s clothing in excess of R22 million to this project. Profits generated from the sale of these reconditioned and refurbished items through the retail outlet “The Feel Good Store” is ploughed back into the project, to make it self-funding and sustainable into the future. The store achieved a retail sales turnover of just under R3 million and moved 53 307 units during the year under review.
Currently, 21 unemployed people are “employed” on short-term contracts in the capacity of trainees. Fifty-five group employees gave freely of their time to the project set-up and many continue to do so in an advisory capacity. These learners were trained in aspects of warehousing, sewing and repairs and retail selling, all of which are built on a foundation of life skills training by Learn to Earn.
These individuals spend a minimum of six months on the programme and then enter the open market with skills that will make them more employable. Trainees from this project are encouraged to apply for employment opportunities within the group.
16 days of activism
This year marked the fifth year of supporting the 16 days of activism campaign against the abuse of women and children. To date, the group has donated over R2 million to 38 NPOs working in this field throughout South Africa. In addition to financial support, the group conducts annual awareness raising campaigns and negotiates publicity and exposure for the NPOs, to raise their public profile. This involves a number of media channels and this year included the social media platform, MXIT.
Glitz, glam and good
In support of breast health the group CSI collaborated with Foschini stores to raise funds and awareness for this worthy cause. Foschini stores, through an in-store campaign, “Colour Makes Change”, collected more than 1 200 bras from customers and raised more than R175 000 through the sale of highlighted products. These funds, together with a further donation of R55 000 from group CSI went towards South Africa’s first Mobile Breast Check Unit Trucks. These units provide access to a mobile mammography screening facility for South African women, as well as providing education on the topic of breast cancer, breast self-examination and patient rights.
The successes of these projects were complemented by the reach of the group CSI into the broader community, where funding is also given to more than 60 organisations according to specific funding criteria.
Divisional CSI initiatives
In addition to the group's CSI initiatives, staff members within the various divisions undertook their own CSI initiatives by providing support to:
- CANSA Eastern Cape;
- CANSA Welkom;
- Ncenduluntu Sanctuary Trust; and
- Solomon's Haven.
RCS Group CSI initiatives
RCS Group is likewise active in community development initiatives and this year invested over R800 000 in various projects. The division’s flagship project is a partnership with TSiBA, a free tertiary educational institution. Together they developed a financial literacy curriculum aimed at empowering students with skills to manage their finances responsibly. This programme, as part of the “pay it forward” concept, has now been rolled out to communities via outreach programmes run by the students of TSiBA.
Other projects supported by the RCS Group include:
- the JAG Foundation which supports children from disadvantaged communities through sport;
- Habitat for Humanity through which RCS have built three houses over three years;
- Building a food tent with HEART, a social security organisation at the Dusk to Dawn Shelter in order to ensure there is a vegetable garden big enough to sustain the food needs of the home;
- Carehaven, a different home, also received a food tent; and
- Project O supports orphans and vulnerable children in rural villages in KZN.
