Reporting to Society 2018 - Political party funding

Promoting sound governance and integrity

The group social and ethics committee is responsible for ensuring that we act ethically in relation to internal and external stakeholders, and society more broadly.

The committee meets quarterly and includes executive and non-executive directors. Key issues discussed by the committee during 2018 included progress on embedding an ethical culture in Standard Bank; group-wide principles for stakeholder engagement; measures to accelerate gender and racial transformation within South Africa, and gender equity across the group; effectiveness of group policies and processes to minimise instances and support the victims of discrimination and sexual harassment; issues raised by environmental and social rights groups; and employee wellbeing.

GOVERNANCE STRUCTURES AND ACCOUNTABILITY

Client risk committees

operate in each of the business units to address client risk management matters. These committees include specific consideration of ethical considerations. The bank may choose to exit a client relationship based on consideration of commercial factors, contractual obligations to the client, compliance, reputational and other risk considerations.

Our supplier risk committee
oversees supplier relationships, including risks arising from the ethical behaviour of suppliers, as well as financial crime and reputational risks including conflicts of interest, anti-competitive practices and human rights violations. A new third-party risk management framework has been approved by the group risk oversight committee.

Our group procurement policy

is based on the matrix operating model of the organisation. All procurement transactions must be objective, transparent and fair, in line with sound corporate governance principles, and the highest procurement and ethical standards must be applied to all such transactions. We require all our suppliers to respect basic human rights and establish a clean and safe working environment. This includes not allowing forced labour, child labour or discrimination, and paying appropriate wages, regulating working hours and respecting everyone’s freedom of association. Suppliers, consultants and contractors to the bank must comply with all the environmental and social legislation applicable, and they must follow good environmental and social practice that applies to their sector and to the goods or services supplied. The bank strives to procure goods and services that have a lesser or reduced impact on the environment and on the health and safety of workers and communities.

Privacy and confidentiality

are core to the way we do business. We are committed to protecting client information, and adhere to the relevant codes and regulations, including South Africa’s Code of Banking Practice. Standard Bank’s data privacy policy provides for measures to ensure that the group processes personal information in a lawful and responsible manner. These measures, together with other relevant policies, inform the security safeguards necessary to protect personal information from unlawful and unauthorised access, use, destruction or loss. These measures cover all processing activities within the group. South Africa’s Protection of Personal Information Act (POPIA) has been a driver for the implementation of further controls to protect client privacy. We are well prepared to meet the requirements of POPIA, and the European General Data Protection Regulation in the relevant jurisdictions. Our privacy statement and Standard Bank South Africa Limited’s Privacy statement is published on the following websites: www.standardbank.com and www.standardbank.co.za

Employees and other stakeholders can seek advice or report concerns about unethical or unlawful behaviour anonymously. Information on our policy and processes for whistle-blowing is readily available to all employees. Employees have access to an independent, confidential whistle-blowing hotline. They are actively encouraged to make use of this should they feel that the group’s values or code of ethics is being compromised. Standard Bank commits to protecting employees who whistle blow in accordance with the procedures set out in our whistleblowing policy.

CONDUCT RISK MANAGEMENT FRAMEWORK

Standard Bank Group’s conduct risk framework uses a culture-led strategy to achieve the culture, ethics and conduct we expect to see from our employees. We’ve put in place effective governance structures with clear responsibility and oversight to promote fair and effective customer outcomes. The board and senior management play a prominent role in supporting awareness and embedding conduct standards.

Since launching our treating customers fairly (TCF) programme in July 2014, we’ve undertaken a significant amount of work to embed the TCF principles. This work is based on sound tenets of business ethics and is aligned to our values. As part of the evolution of the TCF journey, we have strengthened our governance environment with the institutionalisation of our conduct risk management framework. The framework defines the group’s conduct risk appetite and informs our approach to identify, assess and manage conduct risk through enhanced reporting and monitoring that considers fair customer outcomes in material business decisions.

Different areas across the group are required to complete monthly conduct dashboards, which are submitted to the relevant group management committee. Conduct dashboards monitor indicators related to conduct culture and governance. The dashboards include metrics related to employee turnover, absenteeism, registration of gifts and entertainment, personal account trading, declaration of outside business interests, data privacy and protection, and client complaints. They provide a barometer of a significant dimension of the prevailing ethical climate. All business units and corporate functions submit their conduct dashboards to group executive committee on a quarterly basis.

Our conflicts of interest policy forms part of our conflicts of interest management framework. The policy is aimed at ensuring that Standard Bank and all our employees comply with the applicable statutory and regulatory obligations by ensuring that all reasonable steps have been taken to prevent or fairly manage potential conflicts of interest, and thereby mitigate the effect that such conflicts could have on our clients, as well as the bank. The policy reflects the minimum requirements that need to be adhered to, to ensure that all reasonable steps are taken to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. It also serves to ensure that there are processes, procedures and mechanisms in place to identify, prevent or manage conflicts of interest to:

Ensure the fair treatment of clients
Maintain a sound financial environment
Ensure that conflicts of interest are managed fairly
Prevent the misuse of Need to Know information, and
Protect the good reputation of the Standard Bank Group and the industry.

Our money laundering and terrorist financing control framework and structures for managing our money laundering and terrorist financing risk are designed and maintained to ensure compliance with Financial Action Task Force recommendations and in-country legislative requirements in all jurisdictions.

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Isabel Lawrence

GROUP CHIEF COMPLIANCE AND DATA OFFICER, STANDARD BANK GROUP

“The process of embedding good conduct is underpinned by the group’s code of ethics and values. The group holds itself and its stakeholders to high ethical standards and will continue to focus on doing the right business in the right way, by balancing sustainable returns for our stakeholders with fair client outcomes and good business practices.”

The South African Financial Intelligence Centre Act has been amended to incorporate a risk-based approach to compliance in relation to the anti money laundering/combating the financing of terrorism (AML/CFT) regulatory framework. This includes the requirement to develop, document, maintain and implement a risk management and compliance programme that must demonstrate the group’s ability to effectively apply a risk-based approach.

Our money laundering control policy and our financial sanctions and terrorist financing policy comply with applicable statutory and regulatory obligations and ensure that:

The risks arising from money laundering, terrorist financing (ML/TF) and financial sanctions are well understood, mitigated and proactively managed;
Standard Bank’s reputation and integrity is protected by taking all reasonable steps to prevent its use for ML/TF and the circumvention of financial sanctions; and
A framework is established that will enable the recognition, investigation and reporting of suspicious activity and all reportable transactions to competent authorities.

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Standard Bank manages our anti-bribery and corruption (ABC) risk in accordance with the Organisation for Economic Co‑operation and Development’s Guidance for Multinational Enterprises. Oversight of ABC is provided through the bribery and corruption review committee. An ABC risk assessment for the group was completed in 2018 and presented to the group social and ethics committee. Specialised training has been developed for areas that are perceived as being more susceptible to risk of bribery and corruption.

Our ABC policy ensures compliance with applicable statutory and regulatory obligations. It commits us to:

Prohibit bribery and corruption and ensure that an anti-bribery and corruption culture is established and maintained

Conduct business in accordance with our values and code of ethics

Conduct business with integrity, transparency, openness and in compliance with applicable laws

Establish and maintain reasonable and proportionate measures to prevent bribery and corruption, and to detect, report, monitor and respond appropriately to any incidents that may occur

We’ve introduced several automated solutions across our countries of operation to improve efficiency in money laundering control and declaring outside business interests.

All Standard Bank employees must complete compulsory compliance training, which is available online and can be accessed via a computer or mobile device. Training uses case studies and course assessments and provides immediate feedback. We also hold regular ‘compliance conversations’ with a wider audience across the bank, including topics such as anti-bribery and corruption, anti-money laundering and combating the financing of terrorism, conflicts of interest and riskbased approaches to compliance documented in compliance policies.

We track fines and penalties issued against the group to assist us to identify problems areas that need attention and to implement appropriate remedial action.

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