Being a good corporate citizen

Our group and all who work for and lead it are mindful of how we can contribute towards realising the more equal, more inclusive, more prosperous South Africa which the National Development Plan envisages the country achieving by 2030. We believe we can contribute meaningfully towards the achievement of the plan’s objectives by helping to foster a growth and investment-enhancing savings culture, and to closing the retirement savings and risk benefit gaps. Having a lasting, positive, impact on society is a key ambition of our 2016 – 2020 strategic intent.

Many stakeholders have high expectations of us – of how we conduct ourselves and of our broader social impact. By consistently exceeding expectations, we earn the trust that is essential to our existence and to the achievement of our higher purpose. Not the least of society’s expectations of Alexander Forbes is that it should actively and affirmatively embrace transformation.

Putting transformation into practice

Our commitment to transformation is deep-rooted and extends beyond compliance with the broad-based black economic empowerment codes of good practice. It bears stating, however, that between 2007 and 2014 we progressed from being a level 5 contributor under the Financial Sector Code to a level 2 contributor and actively sought to transform all aspects of our business.

Driving execution against our transformation vision is ultimately the responsibility of the group’s board and Social, Ethics and Transformation (SET) Committee while all divisions have SET committees. Transformation is a permanent item on the group Executive Committee’s agenda and is included in senior management’s performance scorecards.

In 2014/15 our transformation performance, as measured against the Financial Sector Code, was largely unchanged from the previous year.

Financial Sector Code performance











Management and control





Employment equity





Skills development





Preferential procurement





Empowerment financing





Enterprise development





Socio-economic development





Access to financial services





Overall score




69.56 (out of 81) equivalent to

85.89 out of 100

Empowerment contribution level





* Entities that are exempt from empowerment financing are required to report on enterprise development with a target of 15 points on the FSC scorecard.

Based on the principle of continuing consequences, following our listing we retained an effective, verified black ownership of 32.44%. (One important consequence of our listing was that our empowerment equity partners, including Shanduka, the Staff Share Trust and the Alexander Forbes Community Trust all realised value at the time.)

The net effect of the private equity consortium’s exit was that our level 2 status declined to level 3. To address this, in April 2015 we announced an employee share ownership scheme (ESOP) which will transfer an effective 2.9% ownership in the group to employees.

The scheme favours black female employees who will be the beneficiaries of 70% of proceeds paid by the Alexander Forbes ESOP. (Thirty percent of dividends will initially accrue to the trust, the balance being utilised to repay the notional vendor finance extended to the trust at an interest rate of 7%). The creation of the trust has restored our level 2 contributor status.

On preferential procurement we improved our performance from 15.0 (out of a target 16 points) to 15.46; our enterprise development score remained unchanged at 15.0 (Financial Sector Code businesses that are exempt from empowerment financing are measured on enterprise development, out of 15 points). For detail on our employment equity performance, see here.

Our key enterprise development contribution initiative for the period under review was an allocation of R12 million to a dedicated fund administered by the Association of Savings and Investments South Africa (Asisa). In addition, we allocated office space to seven black-owned group suppliers – worth R3.6 million recognised as enterprise development spend.

In the new year we plan to more actively invest in supplier development by identifying and growing emerging suppliers who will benefit from our ability to impart skills and mentor small and medium-sized enterprises while empowering them to develop services that are relevant, and complementary, to the core activities of our divisions.

Building financial well-being throughout society

Empowering the more than a million individuals whose long-term financial wellness is largely entrusted to Alexander Forbes is what our higher purpose is all about and is one area in which we have considerable ability to have a positive impact on the societies in which we operate. Equipping our members with information and skills to more actively manage their finances, investments and risks will be a key part of our strategic intent from 2015/16 (for more on this key element of our Strategic Intent, see here).

In addition to empowering individual members, senior managers at Alexander Forbes Financial Services consult regularly at various levels of government, not only on the financial wellness of their employees, but on important matters of policy and best practice in asset administration and management. AfriNet executives provide similar advice, informed by extensive research and experience, in several of the territories in which that business operates.

Addressing community need

We are proud of the targeted, effective contributions we as a group and as Alexander Forbes employees are able to make towards improving the lives and prospects of many of the most vulnerable South Africans.This year the group contributed R4.6 million (2013/14: R3.9 million) to the independently governed Alexander Forbes Community Trust which administers our flagship In-4-Life programme, bursaries, school support, capacity building and employee volunteering.

As well as direct funding from Alexander Forbes, with our listing the trust’s 0.3% equity stake in the group translated into shares worth some R43 million. By October 2014 the trust (which is chaired by revered former cricket administrator Dr Ali Bacher) had accrued R900 000 in interest, which funds, plus dividends, will be used, at the trust board’s discretion, to further expand the organisation’s social investment.

In-4-Life partners with community-based organisations in four provinces focused on orphans and vulnerable children. As its name implies, In-4-Life supports vulnerable children in nine disadvantaged communities, not sporadically but throughout their development. This support encompasses early childhood development, assistance for school learners (by providing uniforms, stationery, meals and after-school care), tertiary scholarships and bursaries (of which there were 22 beneficiaries this year.

Alexander Forbes Community Trust beneficiaries







1 123

1 143

1 830


Children with disabilities





Grade 12 learners





Memezelo Secondary School learners





Tertiary bursary recipients





Hlengimpilo Primary School learners

1 243

1 243




3 974

4 201

5 720

2 502

Total number of all children

5 483

6 063

8 375

4 195







1 564

1 330

4 584

3 365

Total number of all adults

1 711

1 582

4 726

3 514

Total number of all beneficiaries

7 194

7 645

13 101

7 709


Entrenching ethics across our business

The ‘V’ in our SERVE values – value of trust – underpins every one of our stakeholder relationships. The nature of our model for creating value dictates that unless the individuals with whom we interact have 100% trust in us we will be unable to achieve our higher purpose. And stakeholders will only place their trust in us if they believe they can rely on us to always act ethically. (See here for our drive to entrench a culture of treating customers fairly across our organisation.)

The financial services sector is vulnerable to exploitative behaviour and to the economic crimes of fraud, corruption and conflicts of interest. Alexander Forbes addressed these risks in 2012/13 with the introduction of a crime prevention strategy, which provides a framework for deterring and responding to economic crime. Our crime prevention strategy continues to be monitored and enforced by the internal audit function while an independently managed whistle-blower line, for the anonymous reporting of conflicts of interest, fraud and corruption, is widely advertised.

This year, we conducted an extensive ethics climate survey which highlighted shortcomings in ethics training and a general lack of awareness about our ethics policy. In particular, the survey identified the need for our existing code of ethics to be revised. This was done with the subsequent adoption and publication of a separate code of ethics and ethics policy. The code of ethics spells out behaviours that are expected of all stakeholders – not only employees – whereas the policy relates chiefly to procedures that need to be followed to ensure ethical behaviour in all situationsas discussed on this page.

The ethics policy emphasises avoiding particular behavioural risks, the ethical treatment of customers and greater detail on the ethics implications of our HR framework. In the new year, the code of ethics will be distributed to all employees for signing. Following the revision of our ethics policy, refresher training for all employees was being prepared while plans were being made to include more ethics elements in our induction training.

Andile’s journey from Umkomaas to Sandton

Just five years ago, Andile Buthelezi was writing her matric at Umkomaas Secondary School on the South Coast of KwaZulu-Natal, wondering what would one day become of her.

Little did she know, as she and her schoolmates did community service at a nearby orphanage run by the Mpilonhle Community Organisation one day, that fate was about to intervene in her life.

Mpilonhle is one of nine community-based organisations that is sponsored by the Alexander Forbes Community Trust and somebody at Mpilonhle obviously spotted the potential in this bright, energetic 18-year-old.

Growing up in a village outside Umkomaas with her grandmother and five aunts, Andile was always a star pupil – and she lived up to her teachers’ expectations by earning three distinctions in matric. She received a bursary through the trust – enough to pay for her accommodation, books and meals while she studied towards a bachelor of business administration at the CIDA City Campus in Johannesburg.

There she kept excelling, gaining a total of nine distinctions, along the way enrolling at the CIDA School of Investments, obtaining no fewer than three SAIFM certificates.

As soon as she had graduated, in February 2014 Andile began an internship at Alexander Forbes Life in Sandton. Following her passion for compliance, Alexander Forbes helped Andile to get her JSE equities compliance officer certificate. Six months after joining Alexander Forbes she was working in the Investment Solutions compliance department – where the 24-year-old is still working to this day.

Andile loves her job which she likens to ‘being like a policeman’. She also loves the fact that what she’s doing is critically important – keeping Investment Solutions on the right side of regulation and, in the process, giving clients peace of mind.

‘Because this is my first job I obviously don’t have much experience of the world of work,’ she says, ‘but, compared to what my friends tell me, Alexander Forbes is a different, special place to work. I really like the fact that what we do is all about positively impacting people’s lives and I feel like I’m part of a family even though, in Sandton, I’m so far from home.’

Already Andile is thinking about doing her honours degree in economics or asset management – ‘to give me the bigger picture’. Investment Solutions MD Derrick Msibi might be encouraged to know that, in his compliance department, there is a young woman from Umkomaas who has her sights set, one day, on getting his job.

Complying with laws and regulation

Legislation and the regulation of the financial services industry are continuously evolving to ensure that all companies operate according to consistent and appropriate standards and that fairness governs their services and interactions with customers. For an explanation of our legislative and regulatory compliance obligations and performance, can be found here.

Mitigating our environmental impact

The nature of our business dictates that we have a limited environmental impact. However, our commitment to being a good corporate citizen dictates that we always act with due regard for the environment – an area in which we have achieved some considerable success.

Our Sandton head office is accredited by the Green Building Council of South Africa with a four-star green star rating, featuring a number of advanced environmental systems. The group IT function utilises ambient air cooling technology when appropriate to improve the data centre’s energy efficiency. At year-end, the data centre’s energy-efficiency profile, as measured in terms of a power usage efficiency rating, was 1.6 (against a norm of around 3.0).

In 2014/15, our diesel consumption rose by 458%. This was entirely due to increased generator use relating to the fact that we experienced 13 power outages as compared to four the previous year (32 hours in total against 6.5 hours). Various consumption indicators for our Sandton head office declined this year – largely because of lower head counts. At present, data reported on water, electricity and diesel consumed, waste and recycling relates to our head office. During the year, we began implementing procedures to capture such data for all properties.


In the new year, we intend to broaden our social impact, both in terms of organisations supported, and geographically. Our ESOP has been approved by shareholders and bedded down and we will re-engineer our enterprise and supplier development investments to maximise impact.

We look forward to reporting particular progress on our initiative to empower individual fund members in managing their own financial wellness as we further entrench a culture of treating all customers ethically, a performance we anticipate will be reflected in our compliance with relevant laws and regulations.

The Alexander Forbes Community Trust will, it is envisaged, broaden its reach beyond the four provinces and nine projects which it currently has an impact on while adding beneficiaries to its bursary scheme.

Environmental data for Sandton head office




Electricity consumption (kWh)

8 620 382

8 634 176

Electricity spend (Rm)

7 910

6 783

Water consumption – municipal water (kℓ)

41 229

44 459

Water spend (Rm)



Recycling (kg)

16 960

28 026

Waste to landfill (kg)

131 450

181 050


In our 2013/14 integrated annual report we
promised to:

How we delivered on our promises:

  • Contribute towards the transformation of our company and industry
  • R12 million enterprise development contribution to the Asisa SME fund
  • Expand our bursary programme
  • This year we awarded 22 bursaries (19 the previous year) and plan to expand this number in 2015/16
  • Support more community-based organisations through In 4 Life
  • One more community-based organisation received funding; trust dividend income will create greater capacity for broadening impact