Management approach disclosures: Society

Local communities

Barloworld operations are predominantly in urban centres across the world. Their direct influence on local communities is relatively limited.

The group employs local people but, given the size of its operations, it cannot be regarded as the primary employer in any region. At its operations, the group interacts with local stakeholders as appropriate. Given the nature of its operations these usually do not relate to any material negative impacts of its operations.

The group contributes to the socio-economic development of its regions directly though employment, paying local taxes and levies, through its skills development, corporate social investment, supplier diversity and enterprise development programmes (link to EC8, SO1).

In terms of alignment of plans and measuring the impact of development initiatives, the group is committed to spending at least 1% of profits globally on corporate social investment. Of South Africa profits, a regulated 1% is spent on socio-economic development and 3% on enterprise development initiatives, and 6% of payroll cost is levied for SETA’s for skills development: education, training and learnerships for previously disadvantaged individuals.

The central and divisional CSI, SD and ED programmes align with elements of South Africa-specific Millennium Development Goals, the country’s National Development Plan, empowerment and transformation objectives, government’s regional and local integrated development plans and major customers’ social and labour plans, the objectives being increasingly included in tenders. The central CSI programme tracks the achievement of its non-governmental organisation development partners against KPIs linked to shared strategic objectives.

Corruption

Barloworld is fully committed to the fight against bribery and corruption and to preventing dishonest, fraudulent, corrupt and illegal conduct. This is central to the Barloworld Worldwide Code of Conduct, our values and ethics and reflected in policies and practices in the group. This approach applies to all business operations and countries in which the group operates.

Our Barloworld Worldwide Code of Conduct includes the following under the Value of ‘Integrity’

  • We refuse to make or receive improper payments - In dealing with public officials, other corporations and private citizens, we firmly adhere to ethical business practices. We will not seek to influence others, or seek to be influenced by others, either directly or indirectly, by paying or receiving bribes or kickbacks, including but not limited to payments to local officials by Barloworld employees or agents for the completion of routine governmental administrative actions, or by any other measure that is unethical or that will tarnish our reputation for honesty and integrity. Even the appearance of such conduct must be avoided.

We address all reported allegations and other reports of potential impropriety, breach of the law or breach of Barloworld policy and deal with all cases as appropriate to the circumstances.

The group is a signatory to the UN Global Compact of which Principle 10 addresses corruption. The group Chief Executive has expressed continuing support for the UNGC’s 10 Principles (see GRI 1.1, Barloworld Sustainable Development – Chief Executive’s Message and Barloworld’s 2015 COP). For details on the UN Global Compact, see: www.unglobalcompact.org.

The group’s risk management approach covers all operations and risks associated with corrupt and dishonest behaviour. These are analysed and assessed as part of the risk management process.

Any proven cases of corruption would constitute a criminal act which would be dealt with accordingly in terms of the group's disciplinary procedures. After due process the appropriate sanction would be applied which could include dismissal. Criminal charges would also be laid, where appropriate. Induction and other staff training programmes address expected behaviour in terms of the company’s ethics, codes, policies and procedures. Ongoing communication through employee handbooks, letters of appointment, management briefings and structured team forum meetings reinforce our commitment to our values and expected behaviour. New employees participate in induction training and orientation.

There are processes in the group to review compliance with legislation, company ethics, codes and policies.

In addition to the Barloworld Worldwide Code of Conduct, the Code of Ethics, the Barloworld policies on Anti-Bribery and Corruption, Gifts and Hospitality and Due Diligence of Third Party Service Providers and the Anti-Fraud Management Policy are implemented across the group and employees are required to comply.

It is the responsibility of the ethics and compliance managers throughout the group to ensure that the Barloworld Group Ethics and Compliance framework is implemented throughout all operations and regions.

To ensure that conflicts of interest are avoided, employees are required to formally declare any direct or indirect interests in contracts and/or businesses. Barloworld board members and divisional executives are also required to disclose conflicts of interest. This also applies to trustees of the group’s retirement and medical aid funds.

Gifts received are recorded in gift registers in accordance with the group Gifts and Hospitality policy

Public policy

The group is a member of a number of organisations the objectives of which include policy development and advocacy, such as Business Leadership South Africa.

In addition, our operations across the world belong to organised business associations and advocacy groups where they operate.

The group and its divisions participate in relevant industry forums and industry lobbying and policy development activities.

By participating in these initiatives Barloworld contributes to wider society, has an opportunity to share knowledge, raise concerns and influence policy.

Anti-competitive behaviour

The group does not condone anti-competitive behaviour and has policies and procedures as well as training programmes in place to ensure compliance.

Our Barloworld Worldwide Code of Conducts includes the following under the Value of ‘Integrity’

We compete fairly - Barloworld believes that fair competition is fundamental to free enterprise.  We observe antitrust and competition laws where we do business.  In relationships with competitors, principals, suppliers and customers, we avoid arrangements that restrict our ability to compete with others.  We will not be involved in any arrangements, understandings or agreements with competitors affecting prices, terms upon which products are repaired or sold, or the number and type of products repaired or sold.

Compliance

Barloworld is driven by the maxim of creating sustainable value for all its stakeholders.  What sets the group apart is its ability to develop and maintain mutually beneficial long-term business relationships. This is called the ‘Barloworld Way’.

The group is committed to responsible business conduct and best practices. All group activities are guided by the governance framework of ethics and a commitment to legal compliance. The group upholds the King III principles that good governance combines both regulatory requirements and voluntary standards of excellence.

Roles and responsibilities for ethics and compliance have been defined at both group and divisional level.  In each division there are designated executives and managers with specific responsibility for ethics and compliance matters.

Each division is responsible for planning and executing appropriate actions to manage key priorities for ethics and compliance, in addition to addressing compliance matters deemed to be priorities at a group level. Regular reporting of compliance matters is a requirement of the various main board sub-committees, each according to their mandate.

The Barloworld Ethics and Compliance framework sets out the overall ethics and compliance requirements of the group.  It is structured to meet the requirements of King III, legal and regulatory requirements and other international best-practice standards. It applies to all group companies, at all locations around the world.

There are two parts to the framework. The ethics framework establishes overall governance standards. It provides an overview of the context for the programme; defines roles and responsibilities; sets out the principles to be applied and standards required to meet these principles. The framework sets the ethical foundation and governance of Barloworld. It includes the Barloworld Worldwide Code of Conduct and the Code of Ethics.

The second part includes more specific compliance standards that define operational requirements for creating, communicating, training, maintaining and improving policies and procedures.  Standards provide a defined and structured approach that aligns with the ethical framework.

There are a number of policies related to the fight against bribery and corruption and these include Anti-Bribery and Corruption, Gifts and Hospitality, Hosting Customer Events, Sponsorships and Donations and a Due Diligence Policy for third party service providers and suppliers. As a global company, Barloworld is committed to upholding international standards and meeting regulatory requirements in the regions and countries in which it operates. Entrenched in the Worldwide Code of Conduct and the Code of Ethics is the requirement to ‘Obey the law’. This is the minimum requirement and the organisation strives to conduct its operations as a responsible corporate citizen.

Where possible, the group also participates in formulating responses to draft policy and legislation.

Supply-chain impact on society assessment

Third party service providers and suppliers (TPSP&S) in all business divisions have been subjected to a risk assessment and due-diligence process in relation to bribery and corruption. This due diligence process involves the integration a more rigorous screening of TPSP&S into the existing procurement processes and setting clearly defined minimum requirements. This process is now applied to new TPSP&S and is ongoing for existing TPSP&S, in accordance with the Barloworld due diligence policy. To date some 16 500 suppliers are being covered in such assessment. As part of this process, some 3 330 suppliers have signed the Barloworld Supplier Code of Conduct which includes, among other things, the following voluntary undertaking from suppliers:

“The supplier understands that it has responsibility for its own supply chain and for managing standards of conduct within its supply chain.  It therefore agrees to encourage and promote high ethical standards and adherence to international best practices in human rights, health, safety and environmental standards when undertaking its contractual obligations towards Barloworld.”

An internal review has also been conducted on all our major principals and Original Equipment Manufacturers for risks relating to their negative impact on society. . These are significant suppliers and account for the majority (some 70%) of our procurement spend in the group. Save for the area of concern reflected below, the remainder have been assessed as low risk rating.

We are aware of the well-publicised Volkswagen and Audi emission issues affecting customers internationally.  We recognise the associated risks and are engaging with our principal.   The Volkswagen and Audi vehicles sold by us in our dealership territories meet local emissions compliance standards, and our operations have consequently not been directly impacted.  We regret any anxiety or uncertainty our customers, or any other stakeholders, may have experienced because of this matter.

Reporting impacts on society mechanisms

The Barloworld Whistleblowing policy sets out procedures for reporting improprieties or improper conduct so that the rights of employees and other associated persons are protected where such disclosures are made in good faith.

All operations have well established grievance procedures in place. These are formal, documented and easily accessible to all employees. In addition, Barloworld’s Worldwide Code of Conduct specifically covers process for reporting violations of the code. It includes an anonymous Barloworld Ethics Line, and provides assurance that the group does not tolerate any reprisals against an employee for raising a concern or making a report in good faith.

Coverage

Responses to the indicators cover the performance of Barloworld Limited in all the geographic regions in which the Barloworld group and its subsidiaries operate. The consolidated data incorporates the company and all entities controlled by Barloworld as if they are a single economic entity. There are no other entities over which the group has significant influence that it believes should be included in the report. Associates and joint ventures are equity accounted.