Social investment is no longer just about what funders spend. The FirstRand Group's Sizwe Nxasana speaks at the Tshikululu Social Investments Serious Social Investing 2013 workshop.

1. FirstRand Limited
SSI 2013
Sizwe Nxasana

2. Agenda
1. Structural Challenges
2. Corporate Governance
3. Business and Community Development
4. Partnership and Collaboration
5. Conclusion

3. South Africa's structural challenges
POVERTY SA is still one of the world’s most unequal middle
income countries
UNEMPLOYMENT
EDUCATION
one of the world‟s highest gini coefficients
Source: Development Indicators, SA Govt.

4. South Africa's structural challenges
• Unemployment rate in Q4 2012 was 24.9% (35.9% expanded)
POVERTY
• Approx 61% of job seekers do not have matric
• SA's labour force participation rate is 54.6%
UNEMPLOYMENT • World average ~ 64.1%.
• Youth unemployment rate ~ 48%
EDUCATION • Brazil ~ 18%%
• Sub-Saharan Africa ~ 12%
• World average ~ 13%
• By 2015 more than half of the working age adults will still be
out of work
Source: StatsSA ; ILO

5. South Africa's structural challenges
POVERTY Lower
unemployment
rates associated
with higher
levels of
UNEMPLOYMENT education
EDUCATION
The rate of
unemployment is
worse in Free State,
Mpumalanga and
Eastern Cape
Source: Stats SA, Q1 2012 Survey

6. South Africa's structural challenges
POVERTY
30 37 15
UNEMPLOYMENT
EDUCATION
% CSI Spend
GP 23.3%
WC 11.4%
EC 7.6%
KZN 6.4%
MP 4.2%
NW 4.2%
LP 4.1%
FS 2.3%
NC 2.0%
National 34.6%
Source: JET Source : StatsSA

7. South Africa's structural challenges
POVERTY • Adult literacy rate ~ 89%
• While 76% of whites over 20 years old and 62% of Indians
UNEMPLOYMENT have a high school or higher qualification, this figure is only
35% among blacks and 33% among the coloured
population
EDUCATION
• Student participation rate is almost 20% (proportion of 18-
to 24-year olds in higher education
• Whites 59%
• Indians 46%
• Coloureds 15%
• Blacks 14%
Source : StatsSA

8. Agenda
1. Structural Challenges
2. Corporate Governance
3. Business and Community Development
4. Partnership and Collaboration
5. Conclusion

9. Future of Capitalism
• Impact of the global financial meltdown • Desperate need for business community
• Increased social isolation to
• Civic alienation • Repair image
• Re-examine value system
• Flaw of “Everyman for himself” mindset
exposed • Give a “human face” to capitalism
• Image of business fraternity damaged
• Investors
• Customers
• Government
• General public

10. Significant shift in relationship between private
enterprise and society
Ethical
Financial Environmental Social imperative
Performance Performance Performance towards
investors only

11. Proper governance and management focus on social
and ethical matters
Responsible
business
Financial Environmental Social
conduct and
Performance Performance Performance
good corporate
citizenship
• New Companies Act 71 of 2008 • Company acting in a responsible and ethical
manner leads to
• Came into force May 2011
• Good financial performance in long
• Approach sourced from King III Report on run
Corporate Governance • Maintaining productive relationships
• Shift from „shareowner compact‟ to with government and regulators
„stakeholder compact‟ • Requirement to establish
• States that reputation is a company‟s most • Social and Ethics Committee
significant asset
• Social and Advisory Panel to assist
• Management and effective stakeholder committee
engagement crucial
• Ensures proper governance and
management focus on social and ethical
matters

12. Agenda
1. Structural Challenges
2. Corporate Governance
3. Business and Community Development
4. Partnership and Collaboration
5. Conclusion

13. Why get involved in community development
Planet
People
Profit
Customer Employees
Society Shareholders
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others

14. Why get involved in community development
• Meet customer needs
• Establish strong
customer relationship
• Maintain strong
consumer value
• Sustainability
Customer Employees
Society Shareholders
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others

15. Why get involved in community development
• Working conditions
• Employee
engagement
• Reciprocity
• Volunteerism
Customer Employees
Society Shareholders
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others

16. Why get involved in community development
Customer Employees
Society Shareholders
• Sustainability
• Corporate
Citizenship
• Brand image
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others

17. Why get involved in community development
Customer Employees
Society Shareholders
• Accountability
• CSI / Partnerships
• Private
• NGOs
• Government
• Society
Profit / People / Planet (Triple bottom line view)
What is good for one is good for the others

18. Agenda
1. Structural Challenges
2. Corporate Governance
3. Business and Community Development
4. Partnership and Collaboration
5. Conclusion

19. Planet
Rationale for collaboration People
Profit
• Responding to national need to address structural challenges
• Taking advantage of the national plans and commitments by
key stakeholders i.e. NDP Vision 2030
• Fresh vision for SA future
• Useful beacons for guidance
• Active Citizenry
• Importance of stakeholder consensus and willingness to work together

20. Planet
Rationale for collaboration People
Profit
• Working on increasing value for money
• Increasing focus of interventions on priority areas
• Eliminate duplication of activities
• Increasing collaboration between non-governmental and government
interventions
• Jobs fund
• Education spend
• Improving sustainability of the interventions
• Promoting integration between reform, transformation and
improvement initiatives
• Capitalising on the gains of the past 18 years
• Addressing systemic challenges in the country

21. Partnership and Collaboration Planet
People
• Corporate-to-Corporate level
Profit
• Not much has happened
• CSI viewed as competitive
• Failure to distinguish between
• sponsorship to benefit business
• “right thing to do”
• Corporate-to-Government level
• Trust, a major factor
• Foundation to build trust
• Value importance of relationship
• Develop shared and common vision together
• Invest in relationship and nurture it
• Honesty is vital
• Differences must be understood
• Focus on commonalities

22. Partnership with Communities Planet
People
• Consultative manner
Profit
• Greater involvement from company
• More sustainable solutions for beneficiaries
• Need to talk and listen to communities
• Understand intricacies of initiatives
• Design solutions for the communities
• Avoid imposing company/NGO-created solutions
• Takes more time to set up, implement and follow through
• Benefits of approach
• Ensures beneficiaries receive most suitable and sustainable benefits
• Easier to gain deeper understanding of involvement areas
• Focus through fewer areas of specialisation

23. Agenda
1. Structural Challenges
2. Corporate Governance
3. Business and Community Development
4. Partnership and Collaboration
5. Conclusion

24. Conclusion
• Perception of CSI
• Hard-earned reputation for flakiness
• Today‟s leadership has evolved past this perception
• Difficulty linking to concrete tangible outcome
• Measurement is key
• Measure to understand
• Understand to control / monitor
• Control / monitor to improve
• Impact of CSI
• Social value is inseparable from its business value
• Business value of initiatives need to be rigorously quantified
• Partnership and collaboration on initiatives
• Collaboration framework

25. FirstRand Limited
SSI 2013
Sizwe Nxasana