Committee terms of engagement

The board delegates the oversight of MTN’s ethics management to the social and ethics committee, through which the board holds the CEO accountable for MTN’s ethics performance. As a statutory committee of the Company and its subsidiaries, the committee fulfils its duties in terms of sections 72(4) and (5) of the Companies Act, 2008 and regulation 43 of the Companies Regulations, 2011.

Committee members and their attendance at meetings

All committee members are independent non-executive directors:

The remuneration of members in 2015 is set out on 86 and the fees for 2016 are disclosed in the notice of the annual general meeting.

Role of the committee and the execution of its mandate

The committee works in partnership with the risk management, compliance and corporate governance committee to ensure that MTN, as a responsible corporate citizen, conducts its business in a sustainable manner, with an ethical corporate culture at its core. The committee remains committed to developing and reviewing policies and governance structures and practices to guide the Company’s approach to emerging social and ethics challenges, in line with its terms of reference.

In 2015, the committee placed further emphasis on reviewing the material risks relating to the provisions of the code of ethics. The committee also ensured that such risks were managed as part of the Company’s risk management programme in order to drive the values of integrity and ethical conduct across all operations.

In line with the Group’s value of integrity, MTN joined the Alliance for Integrity, a business-driven multistakeholder initiative run by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) on behalf of the German Federal Ministry for Economic Co-operation and Development (BMZ). The alliance promotes anti-corruption and integrity among companies, their business partners and other relevant players in the economic system. Through this initiative, MTN shares best practice with multinational companies all over the world and learns new approaches to dealing with ethics-related challenges.

While we recorded progress across MTN operations in terms of select elements of the ethics programme, we devoted special attention to the implementation of ethics risk assessments and risk mitigation plans. These ensure that substantive regulatory developments, relevant legislation and other legal requirements are taken into account.

Governance of ethics

With the oversight of the committee, the Company continued with its long-term ethics management intervention which is aligned with the Company’s ethics risk profile. We also strengthened our ethics governance and management capabilities for improved delivery against the expanded terms of reference of in-country audit and risk committees in the following ways:

• We equipped in-country audit and risk committee chairpersons with an understanding of their ethics governance roles and responsibilities; and
• We developed an ethics governance toolkit for all ethics role-players, including an ethics management reporting framework to direct internal ethics reporting.

Codes and policies

We rolled out online declarations regarding conflicts of interest and gifts and facilitated training:

• In line with good corporate governance practices, MTN Group’s conflict of interest policy makes it compulsory for all employees and directors to declare annually any conflicts of interest. We concluded the first annual online declarations in February 2015.

Ethics governance structures

MTN’s ethics governance structures continued to assist with various aspects of ethics management in 2015. These structures comply with specific internal and/or legislated requirements for skill, purpose and constitution. They include:

• MTN Group board’s social and ethics committee, which continued to ensure collaboration between its own activities and those of other board committees and operational structures;
• The in-country audit and risk board committees;
• MTN opco ethics management task teams, which are non-formal, multidisciplinary structures established to drive the management of ethics in each opco;
• Ethics champions, who are CEO-nominated senior managers in each opco who manage the ethics agenda within each opco with the help of the opco ethics task teams;
• Cultural operating system influencers. Through their demonstrated interest in and passion for defined, positive culture change, these individuals have been selected and trained to drive the development of the MTN culture. These “MTNers”, the details of whom are recorded in the MTN Group’s influencer database, have been called upon to assist in specific initiatives to drive the evolving culture;
• Five certified ethics officers registered with the Ethics Institute of South Africa; and
• An ethics senior manager at the Group’s head office.

Institutionalisation and reporting

We continued to implement the MTN Group reporting framework, which is designed to drive the quality of ethics reporting, with due cognisance of the ethics management maturity level of each opco. This included:

• Internal and external reporting on ethics performance;
• Developing a Group-wide ethics communications campaign;
• In addition to MTN’s fraud policy, which helps to address fraud before it happens, and as part of the MTN anti-fraud training programme, the Group marked “International Fraud Awareness Week”. The Group’s business risk management team ran an internal campaign “Be the voice, keep it ethical” during which employees were encouraged to report suspected incidences of fraud, bribery, and/or corruption. The week’s activities helped create a clear understanding of the negative impact of fraud, bribery and corruption and reminded employees about the whistle-blowing facility and their role when they suspect wrongdoing;
• Employee Fraud and Credit Wellness Day formed part of the Fraud Awareness Week and gave “MTNers” the opportunity to get a free credit check, understand the importance of regular credit report reviews and learn more about debt counselling and debt review;
• We launched an e-learning module on MTN’s anti-bribery and corruption policy, which is designed to guide employees through various MTN-specific scenarios and appropriate conduct; and
• We rolled out to MTN operations both mandatory and recommended ethics e-learning offerings for line managers, ethics role-players and employees. A total of 2 126 ethics-related programmes were completed during the period under review. The majority of learners (84,5%) were non-managerial employees while 15,5% were managers.

2016 priorities

• Develop DVD-based learning materials to deepen the competence of ethics champions and provide ongoing support to ethics role-players.
• Roll out of an officer certification programme to select opcos in collaboration with the Ethics Institute of South Africa.
• Provide more oversight on opco social and ethics matters, including holding some social and ethics committee meetings at the opcos.
• CEOs and their direct reports to attend ongoing ethics training workshops.
• MTN to participate in the South African business ethics survey 2016, conducted by the Ethics Institute.
• Detailed ethics management KPAs for all ethics role-players in the Group.
• Drive ethics risk assessments and ethics risk mitigation plans in all MTN operations.
• Conduct independent ethics risk assessments in MTN Nigeria and MTN South Africa.
• Roll out extensive ethics communication campaigns across the Group.
• Develop and implement the human rights toolkit to support human rights policy implementation across the Group.
• Analyse opco ethical challenges as identified by CEOs for inclusion in opco action plans.

More information on the social and ethics committee is set out on ( ).

KP Kalyan
2 March 2016