Promoting transformation and empowerment

In South Africa, economic transformation is both a social and a business imperative. And for our business, promoting diversity within the organisation and in our business partnerships enhances our ability to provide a multicultural society with relevant products and services. This year we maintained our targeted level 3 BBBEE contributor status through our ongoing transformational efforts. Our primary focus is on achieving a more representative workforce and investing in our people.

Our efforts to diversify ownership, management and control have been significantly advanced through our Ubuntu-Botho (UB) empowerment venture. The initial transaction in 2004 transferred 10% ownership to a broad-based group of black shareholders. This shareholding was 10.76% at the close of 2011. However, as based on measurement criteria prescribed by the dti Codes with specific reference to the exclusion of Mandated Investments and Foreign Business Operations from the denominator, the Group's black ownership is close to 28%.

The UB consortium has three anchor shareholders:

Through the partnership, the Group gains access to a significantly expanded base of potential clients as a result of expanding its shareholding to micro- and small businesses; it also affords significant insight into local markets to facilitate identification of emerging opportunities relating to new product development, in line with our client-centric strategy. The access to new audiences facilitated through the broad-based consortium of organisations, which includes trade unions and community organisations, has seen us grow into a more sustainable entity in addition to significantly increasing our share price since 2004.

Our BBBEE ownership score at the end of 2011 totalled 17.33 based on the verified score from 2010. Our performance this year in terms of transformation of control remains consistent with last year, with no significant developments to report. The Board comprises four black females, five black males, one white female and eight white males. The scoring in previous years was impacted by certain developments: a decrease in the number of black board members from 2008 to 2009, and a decrease in attributable percentage voting rights in 2009, had a negative impact on scoring. However, an increase in the number of black executive board members in 2009 had a positive impact on the score relating to black executive management. During 2010, alignment of the definition of executive management to the provisions of the dti Codes improved Sanlam RSA's scoring.

Our long-term vision is to move from a regulated input-based measurement system to a more meaningful outcome-based measurement of transformational initiatives which will provide a better understanding of the impact that BBBEE has on all our stakeholders.

A review of our performance against the dti BBBEE scorecard

The unverified BEE score of 79.15 points for the 2011 period confirms a level 3 performance for the year. While the level remains the same, this does represent an increase in our score from 76.21 points in 2010.

This increase is primarily due to an increase in our score for Management Control (an increase of 1.14 points) and an increase in our score Socio-Economic Development (an increase of 1.15 points). The Skills Development score also increased by 0.48 points.

During 2011, we developed a BBBEE strategy to further improve our scores and also to ensure that we implement appropriate actions to meet the requirements of the Financial Sector Code, gazetted under section 9(1) of the B-BBEE Act.