Corporate governance in terms of social responsibility

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Before we can deal with the company's social responsibility and corporate governance we need to know the meanings of these words. CSR is an acronym that means Corporate Social Responsibility. Corporate Social Responsibility can be considered as how the business manages its processes to produce an overall positive impact on society. CSR is important as businesses need to behave ethically and have to contribute to economic development.

Corporate governance is a term that refers to a particular company's rules, processes and laws by which it is controlled and operated.

Anglo platinum corporate governance structure ensures that the company acts responsibly towards all its stakeholders in an economic, environmental and social manner. Corporate government structures ensure that the company is conducted according to high standards locally and internationally. The company's directors ensure that the company is binding to the code of conduct and corporate practices set out in the King 2 report on corporate governance of South Africa. Anglo's directors have set out one exception, 2 of the 4 non-executive directors of the remuneration committee are independent and on the King 2 report it states that the majority should be independent non-executives. The companies corporate governance structures are contained in the King 2 and are reviewed from time to time to take into account organizational changes and international developments concerning corporate governance. The companies systems of control and governance are continuously reviewed to ensure that the company is managed ethically in concern with internationally accepted standards of best practice.

Anglo Platinum has made a few basic principles from the King 2 into guidelines that ensure excellent business management and highlighting the need for corporate practices. This has become an important concept and is characterised by:

Management's commitment to adhere to conduct that is accepted

Profitability within a strategic framework

Ability of business/company to recover from disaster

Social responsibility

Monitoring internal audit

Continuity of the company

Anglo platinum has been involved in community programmes for many years as part of their corporate social responsibility. Since Anglo platinum um is a very large company it is important that they develop CSR policies that are adaptable and applicable. Their main aim is to have a positive impact on the wider community. All Anglo platinum's CSR projects are aimed to be sustainable. If the CSR project was not aimed to be sustainable we could say that it would be useless. Anglo platinum has different policies/programmes in place that are based on CSR. Some of the things that Anglo does regarding social responsibility include the following:

Providing housing, either through supported home ownership or RDP (Reconstruction and Development Programme) housing.

Local Economic Development by providing training programmes regarding business skills to community members.

Providing healthcare for the sick, especially to the HIV/AIDS infected.

Participating and contributing to the development in local municipalities.

To the areas that are affected by mining, they provide social and economic development projects in these rural areas.

On an environmental and social level Anglo platinum is conforming to Safety, Health and Environment standards mentioned in the ISO9001and ISO14001. It is also legally binding to the labour and environmental legislations and it also meets the requirements laid out in the King 2 regarding corporate governance. All the social responsibility programmes are aimed at being sustainable.

Socio - economic issues

Socioeconomic means involving both social and economic factors. In the mining industry there are positive and negative social impacts. Some of these positive impacts may include:

Job creation.

Establishment and support during mining operations that could lead towards community development.

Providing of healthcare services.

Stimulating secondary and tertiary economic activities.

Some of the negatives could include:

Environmental damage.

Social disruption in rural areas e.g. workers may be gone from home all day.

Economy could become dependent on mines for social development and goods/services.

Socio-economic issues are not only a problem that Anglo platinum faces but it is an issue that country also has to deal with. Some socio-economic issues that South Africans faces are poverty, population, HIV/AIDS, lack of training or education, crime and illiteracy. Poverty means being in such a condition that you cannot afford to have basic human needs such as clean water, housing, health care, education and nutrition. Population refers to the amount of people living in the country (this could be an issue as it could lead to unemployment and other issues). HIV/AIDS refers to the people infected by this disease. Lack of training or education is an issue that could be associated with not going to school or university. Crime is a socio-economic issue as it affects all companies/businesses in some or other way. Illiteracy means not being able to read or write.

The socio-economic issues that Anglo platinum deals with include HIV/AIDS, Illiteracy, Poverty and lack of training or education. The way that Anglo platinum deals with these issues are as follows:

HIV/AIDS (health care) - Anglo platinum together with Care Works is responsible for the largest peer education project, which is an HIV/AIDS project. They are also responsible for an HIV/AIDS programme that is based on "Prevention is better than cure." They also provide annual examination and medical care facilities.

Illiteracy - they use a storytelling method to try overcome illiteracy, peer educators tell stories to trainers.

Poverty - Anglo platinum tries to overcome this by being socially responsible.

Lack of training and education - they provide training and educating skills programmes to employees.

Code of ethics

Code of ethics is written guidelines for management and workers to guide them how to conduct their actions in an ethical manner. Code of ethics governs the behaviour of an organization. It can be in the form of rules or procedures. Anglo platinum has a set code of ethics that they are committed to ensure that the business is managed honestly, fairly and legally. Anglo platinum expects all employees to adhere to this code and it applies equally to all employees, whether CEO or a miner.

The following points are covered in their code of ethics:

Compliance with laws and regulations

All employees should comply with these laws and regulations that are applicable to their department or activities.

Conflicts of interest

Anglo platinum expects all its employees to use their knowledge in the best of interest for the benefit of their company and not for their own personal advantage.

Employment equity

It ensures that equal opportunities are promoted for previously disadvantaged groups.

Environmental responsibility

Includes issues such as health and safety, use of resources and environmental management.

Dealing with outside persons and organizations

This would include promptness of communication and media relations.

Gifts, hospitality and favours

An employee should refuse to accept gifts, hospitality or other favours from suppliers.

By referring to their code of ethics and their social responsibility programmes I can say that their CSR is in alignment with their code of ethics. By helping out in the community, providing health care for the sick, providing housing, educating some of the illiterate and also keeping the environment in mind when they mine, I can say that they are upholding their code of ethics. They are also adhering to the BBBEE act which tells us that they are adhering to their code of ethics.

Analysis of Information - Impala Platinum

Company description

Introduction into companies micro-environment

Mission and vision

Organizational culture and structure

Corporate governance in terms of social responsibility and sustainability

Socio - economic issues

Code of ethics

Discussions and conclusions