Stakeholder relations

background

Blue Label Telecoms is part of a greater socio-economic ecosystem and our stakeholders are a core element of that system and of our business.

As a business embedded in emerging markets and embracing a growing ecosystem, the impact of our operations extends beyond our commercial partners, customers and employees.

Providers of capital, communities, the media, government and non-governmental organisations, as well as other stakeholder groupings may each have differing viewpoints and expectations of our business.

We recognise that we depend on robust relationships with all our stakeholders in order to grow our business and provide value to individuals, families, businesses and society.

Blue Label's Stakeholder Engagement Policy, a requirement of King IV, outlines our approach to communicating and working with our stakeholders. Engagement is an integral part of developing an understanding of our stakeholders' needs, interests and expectations and assists Blue Label with strategic, sustainable decision-making. Collaboration and regular interaction with all stakeholder groups is essential to the business's long-term resilience and to the effectiveness of our integrated sustainability approach. Stakeholder engagement is undertaken with a far broader aim than merely communicating 'to' various stakeholder groups. Rather, Blue Label considers its various stakeholders as key partners in its endeavours.

While the Blue Label Board has ultimate responsibility for our Group's stakeholder engagement efforts, the process of engaging with stakeholders is decentralised to form part of the operations of our various subsidiaries in different geographic locations. Each business area is required to report regularly to Executive Management and the Board on its stakeholder engagements. This is to ensure the Group's various business units maintain and commit to playing a role in nurturing impactful relationships that deliver mutual benefits.

Stakeholder identification

At Blue Label we identify our stakeholders and monitor our relationships through a multitude of communication channels including regular dialogue.

Key stakeholders are identified by recognising their interests, areas of expertise and levels of influence. Other factors may also be taken into consideration, such as stakeholders' integrity, willingness to engage, stated expectations from engagement, dependence on the Group, and the value to be derived for the Group in engaging with stakeholders.

Identification also assists in allocating resources appropriately and efficiently. As stakeholders can change, stakeholder mapping may need to be conducted to ensure groupings are not omitted or do not overlap.

Stakeholders are prioritised according to the level of influence they have on Blue Label and the level of influence Blue Label has on them. Our primary key stakeholders are our employees, customers, shareholders, regulators, government, media, business partners and suppliers. These groups are discussed in detail in the stakeholder matrix table included at the end of this report.

Methods of engagement

Our methods of engagement include various channels and means of communications reliant on each specific stakeholder group. These methods are meticulously outlined in the stakeholder matrix.

Some of the initiatives and methods used in the process of engaging with stakeholders comprise: face-to-face formal or informal, individual or group meetings (including the AGM), media and securities exchange news announcements, presentations, speeches, roadshows, telephone and conference calls, the Blue Label website (www.bluelabeltelecoms.co.za), trade visits, phone hotlines, email feedback forms, focus groups and workshops.

We rely on the results of perception studies, independent research, reputation audits, whistleblowing facilities and formal grievance mechanisms as well as financial and integrated reports. In addition, we initiate publications such as newsletters, circulars and e-mail updates; regular customer, business partner and supplier meetings; below-the-line advertising, marketing and social media campaigns; formal consultations and audit processes; and host management and sales conferences. Dialogue, review and feedback are encouraged wherever possible, which in turn are presented to Exco for consideration.

Accountability

Blue Label's stakeholder engagement programme supports our efforts to be a successful, stable and ethical company contributing to the economic growth of the communities in which we operate.

In identifying and prioritising stakeholders, the Board considers the following criteria:

• Groupings which interact with the Group, or are directly or indirectly affected by the Group's activities; and
• Groupings which have a positive or negative impact on our ability to operate.

Exco assesses the completeness thereof, with reference to the ecosystem in which the business as a whole operates. This approach to stakeholder identification and engagement is cascaded to all subsidiaries across the regions, although each is responsible for managing its own stakeholder relationships. Any key concerns at subsidiary level are escalated, either to line management or via the Internal Risk and Compliance Committee.

All subsidiaries or departments dealing with both external and internal stakeholders are directly responsible for receiving and dealing with complaints received. It's their duty to adequately resolve the complaints received to the satisfaction of both parties. Most complaints are directed to the client's direct point of contact with Blue Label, including the multiple call centres.

Stakeholder identification and prioritisation is an ongoing process and is evolving as the Group expands.

The Board's approach to stakeholders also embraces:

• appreciating that stakeholder perceptions affect reputation, and therefore managing reputation risk;
• delegating to management the responsibility to deal with stakeholder relationships;
• overseeing the mechanisms and processes for the constructive engagement of stakeholders;
• disclosing stakeholder engagement in the integrated annual report;
• striving to achieve a balance of stakeholders' legitimate expectations in the best interests of the Group; and
• ensuring equitable treatment of shareholders.

The management of stakeholder risks and opportunities is done through the completion of a risk assessment which forms part of the overall Enterprise Risk Management Process. This enables management to effectively deal with uncertainty, associated risks and opportunities, thereby allowing us to strengthen our stakeholder engagement. Our future engagement activities will expand on current initiatives and improve the accuracy and speed of communication efforts.

Major engagement activities in FY19

Apart from continuing daily engagement with all our staff, customers and suppliers, the major concern during the 2019 financial year has been Blue Label's investment in Cell C. Our investors have been concerned that Cell C will not be successful implementing an extended national roaming agreement and a recapitalisation. Our approach to investors is to provide them with continuous access to Executive Management at Cell C and Blue Label via conference calls and face-to-face meetings. We have also provided access to investors to Blue Label's Board. We provide updates to investors regarding our progress whenever we are required to.

Our formal engagements through results presentations and roadshows also provide opportunities for investors to have all queries regarding our strategic and operational direction answered.

In addition, we have undertaken an extensive review of our Remuneration Policy and have engaged our large institutional investors with regard to their ideas around best practice. Our new Remuneration Policy is detailed herein and we trust that this will meet with broad stakeholder approval.

Our customers and our ability to rapidly meet their needs has resulted in the Group adopting a new operating structure designed to improve our service levels and speed to market. We have conducted extensive customer engagement activities to understand their needs and have designed products and solutions that meet their needs and cater for future requirements.

Stakeholder engagement matrix