| Wed 7 Aug 2002, 0:00 | | AVENG SCORES WELL IN CORPORATE CITIZENSHIP SURVEY |
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Johannesburg - Wednesday August 7, 2002
South Africa's leading construction group, Aveng Limited has scored well in
a recent corporate citizenship survey. It rated ahead of its sector and the
survey average on both corporate governance and environmental management.
Other top performers included SAB plc, which scored the highest overall
score, Standard Bank, AST Group and the Old Mutual plc.
Corporate Footprint and Frater Asset Management, which are championing the
cause of good corporate citizenship in South Africa, launched a pilot survey
into corporate citizenship practices late last year. The survey targeted a
random sample of 55 JSE listed companies and the companies that participated
have recently received detailed feedback on their performance on a range of
non-financial issues.
Amanda Dinan, co-ordinator of the pilot survey, commented that many of the
companies were reluctant to disclose information and some participated
anonymously.
"JSE listed companies are not accustomed to questionnaires that specifically
aim to source information on corporate citizenship practices. In markets
where there is a socially responsible investment industry and shareholder
engagement is established, companies are used to requests for this type of
information. In this context the response rate of around 45% was
encouraging," said Ms Dinan.
Commenting on the findings of the pilot survey, Aveng chief executive Carl
Grim, said that business should welcome the proactive approach adopted by
Corporate Footprint and Frater Asset Management in the area of shareholder
responsibility. "Public companies are just that, companies owned by the
public and it is important that management accounts for its actions to its
shareholders. At Aveng we focus on improving our disclosure each time we
produce our annual financial statements and are encouraged that there are
now organisations out there that are monitoring a company's performance in
this area. While profits are clearly important to shareholders, being
invested in a company that conducts its affairs in a responsible way is
equally important."
The questionnaire targeted strategic policy issues relating to governance
and social and environmental management, as well as asking for disclosure on
issues that would illustrate the degree to which policies have become
enacted.
The results showed that, while companies are addressing corporate
citizenship, they still have a long way to go to improve disclosure and
realising the advantages of addressing investor concerns about company
stakeholder relationships.
Ms Dinan added that those companies such as Aveng that show that they are
willing and able to disclose on "less comfortable" questions, such as the
number of work hours lost to labour disruptions, staff retrenchments,
environmental impacts and resource efficiency initiatives, signal that they
are tracking and managing these aspects of business.
Aveng scored a combined total score of 68% compared with a sector average of
56%. Ms Dinan said that the survey results were based on a total weighted
average score for all participants. In the areas of corporate governance,
Aveng obtained a 77% mark, significantly above the 65% sector average,
earning 100% in the risk management category against a 71% score from the
sector.
"In the current context of widespread corporate failure, shareholders are
interested in governance and risk management practices," Ms Dinan said.
"Aveng is prioritising participation from independent non-executive
directors, undertaking regular reviews of executive director performance and
remuneration as well as placing issues of director remuneration and share
options before shareholders. These practices are important for investor
confidence."
Corporate Footprint found that few companies required directors to limit the
outside directorships they hold, which is becoming recognised as
international best practice. The survey also highlighted that not one
company surveyed required that directors write Institute of Director
examinations.
Aveng showed a comprehensive approach to environmental policy and
environmental management systems and disclosed well above the survey and
sector average. On the social responsibility scorecard Aveng received a 51%
rating compared with 47% for the sector and 56% for the survey average.
Being the parent company of a number of subsidiaries, Aveng did not outline
the various initiatives undertaken by its group companies which affected its
score.
Please note:
Aveng Limited is a South African based group. It was listed on the JSE
Securities Exchange SA in July 1999 with the stated objective of becoming a
globally competitive construction-related group focused principally on the
developing world.
Its major businesses are
* Construction
* Steel and Allied
* Cement
Aveng's objectives are to achieve
* PE rating in the top three of the BCE sector
* Long-term real ROE of 10%
* Minimum 25% of earnings in hard currencies
Visit our website - www.aveng.co.za
ends
