Massmart is committed to achieving the highest standards of ethical behaviour and continued its strong emphasis on promoting awareness of, and compliance with, Massmart’s Code of Ethical Conduct. Massmart’s Code of Ethical Conduct was updated in December 2017, and distributed to Massmart employees and contractors. Massmart continues to ensure that our ethics programme is well known through employee induction programs, booklets and training and continuous communication programs to all employees. The Massmart ethics programme dovetails and aims to replicate global practices used in Walmart, a process that has been easy to adopt.
Massmart Ethics Line
The Massmart Ethics Line is independently run by Deloitte Tip-Offs Anonymous. Deloitte Tip-Offs Anonymous has been certified by the External Whistle-blowing Hotline Services Provider Standard E01.1.1. Callers have the option of: providing their details; remaining confidential; or remaining anonymous. Controls are in place to ensure that callers who contact the ethics lines in good faith are protected and not retaliated against or victimised.
Ethics structure and system
The Massmart Ethics Office has adopted Walmart’s ethics case management procedures to ensure that all calls are managed to their logical and unbiased conclusion in a timely and professional manner. Calls are overseen by Ethics Case Managers (who are suitably qualified) and, where necessary, are investigated by Massmart’s Forensic Services Department. Significant matters are investigated in conjunction with and/ or with oversight by the Walmart Global Ethics Office. Massmart Ethics is led by the Group Ethics Officer who reports to the Chief Ethics and Compliance Officer. The Chief Ethics and Compliance Officer is a member of the Massmart Executive Committee and reports functionally to the Massmart Risk Committee, the Social and Ethics Committee, Walmart International Ethics and Compliance, and administratively to the Massmart CEO.
The Massmart Ethics Office continues to see an increase in overall contacts year over year likely attributable to ongoing training and communication efforts. While historically many contacts have been anonymous in nature, we are starting to see more reporters be willing to disclose their contact details, which suggests increased confidence in the channel.
In 2016, Massmart Ethics partnered with Massmart Human Resources to administer a 11-item integrity index survey to all employees deployed to all businesses. This survey, which will be administered again in 2018, involved assessing tone at the top, comfort speaking up, ethical pressure, awareness and reporting, all of which ultimately drives an employee to make a valuable contribution for the betterment and success of Massmart. Our philosophy is that when the engagement is high, the employee is much better able to respect, add value, and seek opportunities to go above what the job requires. This, we believe, impacts the culture and success of Massmart.
Suppliers and service providers
Massmart regularly communicates its ethical and responsible sourcing standards to suppliers and service providers, and attempts to ensure that they comply with these standards as well as all legal requirements in all the countries where we operate including laws and regulations relating to corrupt activities. Suppliers and service providers are invited to make use of the Massmart Ethics Line, Massmart’s formal trading agreements detail ethical practices that suppliers are expected to uphold, and supplier ethics messages are distributed in supplier communications and training.
Legal and regulatory compliance
Monitoring and managing legal and regulatory risks is a fundamental tenet of our business model. King IV requires that an effective compliance framework should include, among other features, formalized control processes with clear responsibilities and reporting channels. To ensure compliance with King IV in an increasingly regulated market, the Group maintains functional legal and regulatory areas. A central ethics and compliance function exists which in itself mirrors the Walmart global ethics and compliance programme as there are also certain legal obligations required of a subsidiary of a United States Company that apply.
The Ethics and Compliance team comprises of employee that are independent experts and are mostly professionally qualified and /or experienced in each of the subject matter areas below. Additionally, through close alignment with Walmart Global and International Ethics and Compliance, our teams are able to access experts and advise in any subject matter area.
The following broad subject areas are focused on in these programmes:
|Compliance Program – Subject Matter Areas|
|Anti-Corruption/The USA FCPA||Labour & Employment|
|Anti-Money Laundering||Licenses & Permits|
|Antitrust||Privacy & Records Retention|
|Consumer Protection||Product Safety|
|Environmental Compliance||Responsible Sourcing|
|Food Safety||Trade (Import/Exports)|
|Health & Safety|
Massmart follows the generally accepted practices of risk management in its legal and compliance endeavours. This encompasses a multi-pronged approach where:
- The compliance and regulatory teams monitor and scan the environment to understand and respond to trends and legislation that may impact us;
- Dependent upon the subject the legal or compliance team recommends and prepares processes to comply with legislation and to manage or mitigate risks;
- The operational businesses of Massmart (the Massmart divisions) implement, manage and control these processes;
- The compliance function monitors and improves on the effectiveness of the intended processes; and lastly,
- The Massmart internal audit function independently assesses whether assurance can be placed on the functions inventing, implementing, managing, controlling and monitoring these processes.
The mentioned practices align key resources on the dual objectives of (i) providing legal/regulatory subject matter expertise to the Massmart Divisions and (ii) ensuring that each division assesses and manages those legal/regulatory risks that the Group identifies.
With support from the Group, the Finance Directors in each Division and resources allocated specifically to those functions continue to ensure that legal/regulatory risks are appropriately assessed and managed and this is overseen at a Subsidiary Board level and ultimately through the Massmart Risk Committee.
Ethics and Compliance across the Group is exercised as follows under the direction of the Chief Ethics and Compliance Officer:
- Formal risk assessments are completed and responded to;
- Massmart has adopted the global ethics and compliance practices of Walmart; any global process is applied in Massmart;
- A team of 65+ African based compliance experts are employed across anti-corruption the 14 different compliance areas;
- The compliance functions make use of external expert third party service providers, and participate in a number of external conversations and formal meetings with key subject matter experts within government bodies, supplier bodies and consumer groups; and
- The compliance functions, through the Chief Ethics and Compliance Officer reports administratively to the CEO, and functionally to the Massmart Risk Committee, the Massmart Social and Ethics Committee and Walmart International Ethics and Compliance.
Legislation or recently enacted laws that may have a potentially material impact on the Group continue to include:
- Labour and Employment legislation;
- Protection of Personal Information Act; and
- Various regulations relating to food safety.
Extraterritorial laws relevant to Massmart via our subsidiary association with Walmart that may have a material impact on the Group include:
- The U.S. Foreign Corrupt Practices Act;
- Sarbanes Oxley;
- Dodd-Frank; and
- Various trade sanctums relevant to subsidiaries of US companies.