RMH is committed to good corporate citizenship practices and organisational integrity in the direction, control and stewardship of the group's affairs. To the extent that it is possible, the directors of RMH seek to ensure that this commitment is practised and reported on by the company's associate (FirstRand). This commitment provides stakeholders with comfort that RMH's affairs are being managed in an ethical and disciplined manner.
This discussion is a limited overview from a RMH perspective. FirstRand publishes a detailed sustainability review, which is available on www.firstrand.co.za.
RMH subscribes to a philosophy of providing meaningful, timely and accurate communication to its key stakeholders, based on transparency, accountability and integrity.
The direct stakeholders of RMH are current and potential shareholders, analysts, employees, suppliers, regulators; government and civil society, communities and, indirectly, customers.
RMH's communication practices are designed to allow investors to make decisions about the acquisition and ownership of shares. The company communicates formally with shareholders twice a year when it announces interim and year-end results. These comprehensive reports are sent to all shareholders.
The chairman and chief executive meet with investors and investment analysts from time to time. Ad hoc engagements with shareholders are done via the website or via SENS announcements through the JSE.
Significant shareholdings and an analysis of the RMH share price and trading data appears here.
FirstRand provides a comprehensive range of financial services to South African corporates and individuals. In this regard, the integrity of its various brands, their image and reputation are paramount to ensure the sustainability of their businesses. FirstRand regularly engages with its customers to measure satisfaction levels and gain insight into their needs. FirstRand's emphasis on innovation encourages new solutions for extending financial services to new markets. FNB uses the international accredited and recognised South African Customer Satisfaction Index. The index classifies FNB as a leader in customer satisfaction in that the business scores significantly better than the industry average, with a score of 76.8 compared to the industry's 73.7.
RMH, together with FirstRand, believes that employees have an important role to play in sustaining the positive performance of the group. The human resource strategy is to attract, develop and retain the best industry talent. We empower our people, hold them accountable, and reward them appropriately.
FirstRand, together with RMH, follows a practice of aligning employee remuneration with shareholders' return. FirstRand's divisions operate across a variety of financial services activities, each with a distinct employment and human resources pressure. FirstRand's remuneration policy takes account of the diverse needs of the group and the implementation of appropriate industry remuneration practices in accordance with the FirstRand's remuneration policy.
FirstRand's remuneration consists of the following:
Annual performance related rewards are based on both individual and business unit performance.
For long-term incentive schemes, the vetting is closely limited to corporate performance targets, measured on a cumulative basis over a three-year period. If conditions are not satisfied, allocations are forfeited.
All employees are required to belong to a medical aid.
The FirstRand transformation committee conducted the following during the current year:
FirstRand retained its level 2 BEE status. RMH does not have a formal BEE rating. An informal rating is prepared and monitored by the social, ethics and transformation committee.
FirstRand has an established set of procurement guidelines to assist in meeting their commitment to place business with BEE suppliers. The centralised procurement function's principal objective is to improve the B-BBEE procurement spend and leverage efficiencies through economies of scale with improved coordination of procurement functions. FirstRand managed to improve its BEE procurement spend to 98% (2014: 94%) of the total FirstRand measured procurement.
The group is subject to the independent oversight of South African regulatory authorities. The group representatives interact with a wide spectrum of regulatory bodies, including the South African Reserve Bank, the Financial Services Board and the Johannesburg Stock Exchange. The relationship sought is one of compliance and constructive participation in committees, with a view to ensuring that South African industry practice remains amongst the best in the world.
FirstRand is committed to uplifting the societies in which it operates through following sound employment practices and meeting the real needs of the communities.
FirstRand contribute 1% of its normalised earnings to the FirstRand Foundation. The current fund value is R175 million, which has been pledged for various development interventions across South Africa. At the FirstRand Foundation's June 2014 strategy session, trustees approved a fundamental shift in the Foundation's strategy. For the past year it has been working to transition from the programmatic approach followed since 2006 to systemic social investment (SSI). SSI is a multi-faceted strategy, which at the most basic level aims to confront the root causes of social problems (not only the symptoms) through strategic interventions in order to bring about lasting, system-wide change. The Foundation has been in existence for 17 years and has distributed more than R1 billion towards social change during this time. Peter Cooper serves as a trustee on the Foundation. RMH, through its 34.1% investment, therefore indirectly contributed R72 million (2014: R63 million) of FirstRand's normalised earnings to the FirstRand Foundation. RMH therefore currently does not have its own CSI programme and believes that partnering with FirstRand better serves the wider community.
FirstRand's carbon consumption is calculated per franchise and reported internally to the franchise social and ethics committees, as well as externally in the Carbon Disclosure Project.
Electricity use contributes 88% of FirstRand's carbon footprint. During the year, FirstRand's carbon footprint increased by 9%. This is principally attributed to:
Green buildings are receiving priority. All new buildings are constructed in an energy efficient manner to reduce operational energy costs. FirstRand seeks to achieve at least a 4 green star rating for all new buildings from the Green Building Council of South Africa. Recent buildings include FNB Portside Building in Cape Town – 5 star; FNB Acacia House in Umhlanga – 4 star; and FNB Freedom Plaza, Windhoek, Namibia – 4 star. These efforts help to minimise the ecological impact of FirstRand as it expands.