Ensuring business integrity
Being unbeatable together is driven by our four core values, which are:
- Respect for the individual – we value every employee, own the work we do and communicate by listening and sharing ideas
- Service to our customers – we are here to serve our customers, support each other and give back to our local communities
- Strive for excellence – we work as a team and model positive examples while we innovate and improve every day
- Act with integrity – we act with the highest level of integrity by being honest, fair and objective, while operating in compliance with all legislation, policies and guidelines.
Our values underpin our desire to constantly strive towards achieving the highest standards of ethical behaviour and our commitment to being a responsible and ethical company, as well as securing and maintaining the trust of our stakeholders, our employees and our customers. We are further guided by the principles set out in King IV on ethical commitments and performance requirements that lay out the foundation for a socially responsible and a profitable business.
Promoting ethical conduct
Our Code of Ethical Conduct (the Code) is the basis, which provides direction and clearly explains what is expected of all employees and representatives of Massmart. To increase awareness of the Code, various initiatives are driven by Massmart Ethics, which includes simplification of the Code through face-to-face and online training and awareness, as well as other innovative tools, on promoting the culture of ethics in the Group.
As best practice, Massmart Ethics recently established an Operational Ethics Forum, which includes key stakeholders within the business, to provide guidance and input and track actions within the business on how to effectively embed and drive the ethics programme across the Group. We are confident that this forum will enable operationalising the ethics programme. The purpose of this Forum is to drive an effective communications and awareness strategy for the ethics programme, reinforcing ethical values and best practice in the Group and censoring unacceptable practice.
Massmart Ethics Line
The Massmart Ethics Line is independently managed by a third party service provider. Callers have the option of reporting openly, confidentially or anonymously, concerns that compromise or violate Massmart’s Code of Ethical Conduct. We foster a culture of ensuring that callers who contact the ethics line in good faith are protected and not retaliated against or victimised. All calls reported are overseen by Ethics case managers and, where necessary, are investigated by Massmart’s Forensic Services Department and external service providers.
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 to the Massmart Chief Executive Officer, Massmart Risk Committee, the Massmart Social and Ethics Committee and Walmart International Ethics and Compliance.
As a potential indicator of increased knowledge and confidence in the ethics process, we continue to see a gradual decrease in reporter anonymity as more reporters are willing to disclose their contact details, which signals increasing confidence levels in the line and our protocols. Common themes of issues reported related to fraud and theft. Disciplinary proceedings, including terminations, are instituted where employees or contractors are found to have acted contrary to the Code and our policies. Measures to mitigate the risk of reoccurrence of these types of misconduct is constantly being analysed and implemented with a view to further focus on other mechanisms to mitigate such risks.
We periodically measure the Group’s ethical performance through employee surveys. The results of which are a valuable contributor to the betterment and success of the Group.
Suppliers and service providers
We regularly communicate our ethical and responsible sourcing standards to suppliers and service providers, and attempt to ensure that they comply with these standards, as well as all legal requirements, including laws and regulations relating to corrupt activities, in all the countries we operate. Suppliers and service providers are invited to make use of the Massmart Ethics Line. Our 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, formalised 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 to manage local ethics and compliance risk. This function also mirrors the Walmart global ethics and compliance programme, as there are certain legal obligations that apply to a subsidiary of a United States Company.
The Ethics and Compliance team comprises employees who are independent experts and are 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, Massmart’s Ethics and Compliance team have access to global subject matter experts who are able to provide
The Ethics and Compliance program is made up of the following areas.
|Anti-Corruption/The USA FCPA||Food Safety|
|Anti-Money Laundering||Labour & Employment|
|Antitrust||Licences & Permits|
|Consumer Protection||Data Protection|
|Environmental Compliance||Product Safety|
|Health & Safety||Responsible Sourcing|
Massmart follows the generally accepted practices of risk management in its legal and compliance endeavours. This encompasses a multi-pronged approach where:
- The regulatory compliance team monitor and scan the regulatory landscape to understand and respond to changing regulatory requirements and emerging trends that may impact the business
- Dependent upon the subject, the legal or compliance team recommends and prepares policies, guidelines, standards and procedures to comply with legislation and to manage or mitigate risk
- The compliance function monitors and improves on the effectiveness of the Massmart Compliance programmes through a rigorous risk identification process which forms the basis of the compliance strategy and informs the key compliance objectives requiring attention throughout the year
- The Massmart internal audit function independently assesses whether assurance can be placed on the functions developing, implementing, managing, controlling and monitoring these processes
- Massmart divisions manage the implementation and embedment of the above-mentioned practices.
These practices align key resources on the dual objectives of (i) providing legal/regulatory subject matter expertise to the Group; and (ii) ensuring that each division assesses and manages those legal/regulatory risks identified through the Compliance programme.
With support from Massmart, 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. This function is overseen at a subsidiary Board level and ultimately through the Massmart Risk Committee and Board.
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 on an annual basis
- Adoption of global ethics and compliance practices through Massmart’s ongoing interactions with Walmart’s global teams
- A team of over 105 African-based compliance experts are employed across anti-corruption and the 13 different compliance areas
- The compliance function makes use of expert service providers, and regularly engages with key subject matter experts within government institutions, supplier bodies, consumer groups and other players in the retail industry
- The compliance functions, through the Chief Ethics and Compliance Officer, reports functionally to the CEO, 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 potential material impact on the Group continue to include:
- Labour and employment legislation
- Data protection legislation
- Consumer protection legislation
- Various regulations relating to food safety.
Extraterritorial laws and other requirements relevant to Massmart via its subsidiary association with Walmart that may have a material impact on the Group include:
- The U.S. Foreign Corrupt Practices Act (FCPA)
- Sarbanes Oxley
- Various trade sanctions relevant to subsidiaries of US companies.