Transformation in practice

The South African government has legislated black economic empowerment with the goal of bringing the majority of its citizens into the economic mainstream. A broad based approached is currently applied across three categories of empowerment:

Direct empowerment – ownership of businesses and direct management control
Human resource development – employment equity and skills development initiatives
Indirect empowerment – procurement, enterprise development and socio-economic development programmes

Siemens formalised its empowerment drive in the mid-1990’s and successfully implemented a variety initiatives. These include (click on the grey spheres below for more details):

1. Equity ownership transactions

Sekunjalo Investment Holdings (Pty) Limited, a 100% black-owned entity (50% of which is owned by black women), acquired 13% of Siemens Limited in December 2000. By January 2002, New Africa Millenium Telecommunications (Pty) Limited (“Africom”), 100% black-owned, acquired a further 13% of Siemens Limited.

After we sold an additional 2% of Siemens Limited to each existing shareholder in January 2007, Sekunjalo and Africom each own a 15% stake in Siemens Limited and have seen the net value of their investments grow since then.

Being a multinational, our black shareholders have accessed the world of Siemens while contributing to our overall success.

2. Management control

As a consequence of our shareholding transactions, two black persons were appointed to the Board of Siemens Limited. More recently we appointed Dr Anna Mokgokong, a black female, as Deputy Chairperson on the Board followed by Mrs Alexandria Mathole in her capacity as Executive Director and General Counsel.

This brings black representation at Board level to 44% up from 28% in 2005 with meaningful participation through, amongst others, their unrestricted voting rights.

3. Employment equity

Siemens Limited embraces the diversity and values of its people while harnessing this power to promote equitable gender and race representation.

Through targeted recruitment, skills development, promotions and cross-functional career development opportunities we have diversified our workforce at the designated levels.

Black representation in Middle Management has grown from 8% in 2000 to 33% in 2008.
At supervisory and technical specialist level, representation is up from 19% to 2000 to 53% in 2008.
Over the past 12 months, 70% of recruits were black, including black women

Integration plans allow new staff to become familiar with their environment quicker thereby reducing the period of “getting to know the organisation”.

4. Skills Development

It is well documented that the scarcity of skills in South Africa can limit the extent to which our economy grows. The current infrastructure development programme has clearly shown the need for, amongst others, engineers, artisans and information technology specialists and various initiatives in the public and private sectors aims to secure these skills bases.

Siemens is already known for its significant investment in skills development. Approximately R25-million per year is spent on engineering bursars, soft skills training, management learning, project management and commercial training. Such programmes are managed to secure a growing number black participants thereby “stocking” our pipeline and ensuring a healthy flow of qualified graduates.

Some data:

On the Management Development Programme half of the delegates are black, including black women.
We have trained almost 500 people over the past three years, of which 396 were black and 132 women.
The re-launch of our Apprenticeship Training Programme has been a success. Already, 20 apprentices, 19 of whom are black with four females are on their way to becoming electricians, boilermakers and fitters. Our plan is to train 100 apprentices over a three-year period with an investment of R16million.

5. Procurement

With purchases exceeding R1billion across Southern Africa, Siemens already impacts the local economy. Around 41% of our spend is with Black-owned and Black-empowered suppliers, all of whom enjoy a preferential status with Siemens as a consequence of their quality, technology, expertise, pricing and empowerment credentials.

6. Enterprise Development

We have always supported small and medium sized business to ensure their operational and financial success.

Initiatives include payroll and bookkeeping support to a labour brokerage firm, office space to a courier company, an obligation free financial bail out to a shareholder and operations space to a printing company. Last year, our enterprise development investment reached R49 million.

7. Social Investment

Siemens considers itself a stakeholder in the communities in which it conducts business and as such, we consider ourselves to be good corporate citizens. In this regard our social investment programme is aimed at public welfare (Caring Hands), education (Generation 21) and arts and culture initiatives.

Our employees also contribute to our initiatives with the result that volunteerism in the form of time and money is a growing trend. Our social investment initiatives included an outlay of more than R5million last year, including a rural college in Limpopo Province whose workshop we equipped.

Corporate Responsibility