Tiger Brands: Integrated Annual Report 2018

Governance review

We were devastated that Listeria was found in our Polokwane manufacturing facility, and our sincere condolences go to all those who lost loved ones to listeriosis. We would like to assure our stakeholders that we are dealing with the matter ethically, with integrity and care, and as swiftly as possible, to be able to provide closure to the affected families.

The lessons learned from the crisis have led to the establishment of the Centre for Food Safety at Stellenbosch University. We hope that through the centre we will be able to enhance the national food safety system to ensure consumers have greater certainty about the quality and safety of food they consume. This is a start, and we will continue to work with our stakeholders, including government, academia, local and international experts and industry partners, to support and improve South Africa's food safety standards.

Below is a detailed schedule of the focus areas of the social, ethics and transformation committee, the progress and the gaps that still need to be closed:

Focus areas		Elements		Focus areas in 2018		Gaps to be addressed in 2019
Economy		Economic development Preventing corruption Broad-based black economic empowerment (BBBEE)		We registered a special-purpose vehicle and trust to manage our enterprise and supplier development programme The community enterprise development programme was established, focusing on community bakeries, farming cooperatives and community food gardens All senior employees and non-executive directors were required to undertake ethics training, particularly anti-bribery and anti-corruption We have a functioning confidential tip-off line that can be accessed by employees, suppliers and other stakeholders Our BBBEE scorecard moved from the old agricultural codes where Tiger Brands was rated as a level 3 contributor; under the new codes, indications are that Tiger Brands will drop to level 8 For the scorecard, Tiger Brands was rated non-compliant on the enterprise and supplier development element – an area we must improve on The committee applied its mind to the issue of counterfeit stock and export stock being sold in the local market Tiger Brands remains a member of Business Leadership SA and has signed the business integrity pledge		We have plans to improve our BBBEE score to level 4 by FY22 by focusing our investments on preferential procurement, enterprise development and supplier development Job creation and job security remain critical areas to stakeholders, and Tiger Brands will need to develop strategies to address these challenges

MANDATE OF THE SOCIAL AND ETHICS COMMITTEE
MONITOR THE COMPANY'S PERFORMANCE		REPORT ON THE COMPANY'S SOCIAL PERFORMANCE
SED – socio-economic development Good corporate citizenship Consumer relations Labour relations and employment issues Health, safety and environment (HSE)		Draw matters to the attention of the board Report to the annual general meeting

Focus areas		Elements		Focus areas in 2018		Gaps to be addressed in 2019
Workplace		Employment equity Decent work Employee safety and health Employee relations Skills development of employees		We are deeply saddened that one of our employees died while on his bread-delivery route. We continue to work with industry partners to seek ways to improve the safety and security of our bakery drivers Following the suspension of our value added meat products facilities, we used the opportunity to retrain staff on safe production and product quality. All employees at the suspended sites remained fully employed during this period The graduate and management trainee programme, the Thusani Trust bursary scheme for children of qualifying employees and the community bursary programme are well established A progress report was provided to the Gender Commission in November 2017 after the review conducted in 2016. Positive feedback was received from the commission, with some recommendation for enhancement of our diversity and inclusion initiatives Agreement was reached with the Department of Labour for Tiger Brands to submit one employment equity report for the group instead of separate reports for each of our business units The committee considered activities on equality and unfair discrimination, the industrial relations climate and union engagements. Wage negotiations were concluded successfully Tiger Brands launched the Tiger Woman's Network, which was very well received by employees The committee engaged with the risk committee on matters monitored by that committee on its behalf – including employee safety, health and the environment. Tiger Brands has been independently assessed against FTSE4Good criteria, and has satisfied the requirements to remain a constituent of the FTSE4Good index		Employee health and wellness need to be enhanced at site level. Some progress has been made as we now have a group occupational health risk manager who will work with sites to develop employee health and wellness programmes
Social environment		Community development Donations and sponsorships Public health and safety Consumer protection Advertising Human rights		In the review period, the committee focused significant attention on the listeriosis crisis. The concerns of all stakeholders were considered and responded to with integrity and transparency The company is working with the class-action lawyers to facilitate the speedy certification of the class action and enable the legal process to progress expeditiously Tiger Brands is the founding member of the Stellenbosch Centre for Food Safety which will work with other academic institutions, industry and government to improve the food safety system in South Africa We approved the socio-economic development (SED) strategy which focuses on nutrition and food security of communities. The SED programme has been extended to universities to cater for food security of students in need. Both the community and university programmes are complemented by food gardens that provide fresh vegetables to their beneficiaries The Tiger Brands Foundation continues its well-established partnership with the Department of Basic Education and is providing daily in-school breakfast to 94 non fee-paying schools, reaching 67 500 children and teachers per day In the review period, the consumer contact centre recorded a significant increase in consumer interactions due to the listeriosis crisis The committee considered and approved the stakeholder relations policy, human rights policy, group code of ethics and ethical sourcing policy		Stakeholder management strategies and plans at all our operating sites need to be articulated and implemented to enable effective site-specific stakeholder management Relationship owners will be trained on the Tiger Brands stakeholder protocols, systems and processes A stakeholder management system will be implemented to enable central reporting

The committee is satisfied that it has carried out its mandate. We will continue to engage with our stakeholders to receive feedback and input on material issues they wish to bring to our attention.

On behalf of the committee

Maya Makanjee

Chairman – Social, ethics and transformation committee

21 November 2018