Are SECs doing enough for the environment and are they really valued?

Social and Ethics Committees (SECs) play a vital role in the governance of organisational ethics and responsible corporate citizenship. The 2022 Social and Ethics Committee Trends Survey conducted by The Ethics Institute in partnership with the Institute of Directors of Southern Africa (IoDSA) found that SECs tend to spend more of their time on certain aspects of their mandate, whilst neglecting other aspects. The aspects of their mandate that SECs spent most of their time on are:

1. Employment equity and transformation
2. Organisational ethics
3. BBBEE
4. Employee safety and health
5. Fraud and corruption prevention

Although SECs spent most of their time on these activities, they may be neglecting others. SECs spent the least time on the following aspects of their mandate:

1. Responsible and transparent tax practices
2. Advertising
3. Biodiversity
4. Climate change mitigation
5. Consumer protection

It would appear then that the biggest priority for most private sector businesses in South Africa is transformation and employment equity, followed by organisational ethics. The biggest loser where the least time is spent appears to be the environment and biodiversity.

Interestingly SECs rank very well in terms of gender transformation. 44% of SECs are composed of women. They are also relatively well transformed regarding ethnicity. This is encouraging; however, SECs also appear to be the lowest remunerated subcommittee. The Directors Fees Guide (2022) indicated that the average remuneration in SECs was lower than for the Nominations Committee, which is often an ad hoc committee.

If we were to invoke the tenet that: “if you want to know what an organisation cares about, look at where it spends most of its money”, SECs may be getting the short end of the stick.

Two questions should therefore be asked:

(1) Are SECs giving enough attention to all their responsibilities, especially environmental concerns?

(2) Are SECs being used to push a visible (at face value) transformation perception to shareholders? You decide.