Lion of Africa Insurance Company has been awarded an ‘A’ rating by the Financial Sector Charter Council (FSCC), reaffirming its position as one of the leading black empowered companies in the South African financial services industry.
Lion of Africa scored well across all categories as measured by the FSCC.
The company scored 23 out of 22 (including bonus points) for ownership and control, largely as a result of its direct black ownership of 46.67%, far in excess of the 2010 target of 10% prescribed by the Financial Sector charter.
Lion of Africa CEO, Adam Samie (pictured) says, “Our philosophy has been to move away from passive investment to encouraging investors to come in and play an active role in developing the business.”
Even though Lion of Africa has impressively overshot the target, Samie recognizes that it is difficult to accomplish. “It is one thing to aspire to the ownership target and an entirely different thing to go ahead and do it. One must always remember, however, the objectives of the charter: transformation of the economy.”
Lion of Africa is also confident in the progress it is making in human resource development, scoring 14 out of a possible 20. The company far exceeded targets for black people as a percentage of senior management where 60% of Lion of Africa senior managers are black versus the 2008 FSC target of 20-25%. In middle management, over 50% are black versus the 2008 FSC target of 30%
“Lion of Africa is a relatively young company,” says Samie, “which means that we have been able to implement BBBEE objectives since inception, as opposed to some of the mature companies that have to try to change their mix.”
However, the company has not been without its fair share of difficulties. “The necessary technical skills are not always available in the black community. Lion of Africa has, therefore, developed a pro-active strategy in this regard, by sourcing people with the right attributes and then giving them on-the-job training.”
Lion of Africa has also been recognized for its commitment to Corporate Social Investment (CSI). The Financial Sector Charter Council expects 0.5% of post tax operating profit to be directed towards CSI. Lion of Africa scored an impressive 10.95%.
As Samie says, “We have an economic and social imperative to transform South Africa. We need to create an environment on the ground that allows the poorer sectors to access the economy. Socially this is important, but from a commercial aspect, it also makes a lot of sense. As you contribute to developing those communities, you will also be creating new markets, which, simply taking into account economies of scale and the unit cost of production, will improve the overall economy.”
Samie says while he is very happy with the rating; “It is not all about the numbers. The charter targets are actual as well as aspirational. Once the business is successful in terms of the charter, you need to move on from there. The process of transformation necessitates its own continual evolution. When you embark on a strenuous program of transformation, it takes on a life of its own.”
According to Samie, there are three critical factors for transformation in South Africa. “The first is the development of people through education and training. The second is the development of the infrastructure to improve the overall delivery mechanism of the economy. And the third is preferential procurement policies in which black based suppliers and businesses are supported and enabled.
“Lion of Africa shows that transformation can be done and that it can be done successfully. The rating demonstrates what can happen when companies put their minds to transformation.”
Get the latest issue of FAnews