OUR GOVERNANCE

Board activities 2020/2021 and outlook for 2022

Board committee activities 2020/2021 and outlook for the year ahead

Audit and Risk Assurance Committee (ARC)

Chairman

Fred Bamwesigye

Members

Mugole Mauku D. Stephen
Peter Christopher Werikhe
Peninnah Tukamwesiga
Aggrey David Kibenge

Professional Advisors

Albert Richards Otete

Audit and Risk Assurance Committee (ARC)

The Committee comprises of only Non-Executive Directors and the Managing Director only attends on invitation. The Committee assists the Board to effectively discharge its oversight responsibilities for financial reporting, risk management, internal controls, internal and external audit and regulatory compliance and governance.

The ARC, on behalf of the Board, undertakes detailed monitoring of internal controls through the IA function. The Board has reviewed the system of internal control, including financial controls for the year under review up to the date of approval of this Integrated Report.

2020/2021 ARC Activities

The committee focused its attention on regulatory challenges, trends of litigation, information security and business continuity planning and management. It encouraged the continuing improvement of capabilities to identify and assess emerging risks.

ARC Committee’s key activities in FY 2020/2021 included oversight, review and approval of:

Key Activities

Key legislative and regulatory obligations and Fund compliance thereof
Cyber risk and data loss prevention
Investee company ratings
The integrity of the financial statements and other information to be provided to the members to ensure that they represent a clear and accurate assessment of the Fund’s position and performance
Risk policies and processes
The Fund’s top risks

Key Activities

Key litigation cases for and against the Fund
Timeous resolution of audit findings
Progress on resolving significant issues:
- It was a finding of the auditors in the previous FY that the Fund holds money on the suspense account and this was not allocated to any members - the Fund has since embraced digital transformation and all payments are done online and credited to members’ accounts within twenty four hours
- The Tax matter between the Fund and Uganda Revenue Authority (URA) was significant as it raises a significant impact on the tax treatment of interest paid to Members by the Fund - the matter is still before Courts of Law, with the recent Judgement being in favour of the Fund
External Auditors findings and recommendations for FY 2019/2020

Key Activities

Management letter
Internal and External Auditors Plan
Independence of the external auditors
The Audit Plan and appropriate resourcing of the Internal Audit Team (considered to be appropriately resourced and efficient)
- Through automation and use of data analytics, internal audit has been able to create efficiencies by transforming data into valuable and actionable information on a timely basis

Key engagements

The Head of Internal Audit reports directly into this committee which ensures independence of the IA function
Engagements were held between the Chairperson of the ARC committee and the Head of Internal Audit in confidence to appraise him on audit matters
The ARC Committee met with the external auditors at the beginning of the audit for on boarding since they have been rotated by the Auditor General. The scope of their work, assessment of their independence, audit plan, findings and recommendations were discussed

Challenges during FY 2020/2021

The impact of Covid-19 on some of the activities of the Fund
The difference in reporting periods of some investee companies (i.e. calendar year vs financial year) making analysis of their performance difficult based on previous year’s data
The delay in passing the amendments to the NSSF Act which has hindered several regulatory developments

Key focus for the following year FY 2021/2022

Continuous improvement of the governance, risk management and internal control systems across the Fund
Review of the effectiveness of IA
Development and delivery of Internal Audit and Risk Assurance plans
Implementation of adequate risk measures to cushion the Fund and its members from the long-term impacts of Covid-19
Monitoring the Fund’s investments to ensure that the Fund is operating within risk appetite
Monitoring the Fund’s policies to ensure that the Fund is compliant with all relevant laws and policies
Monitor the implementation of recommendations and resolution of internal and external auditors findings
Sensitisation of the public on the proposed NSSF Amendments once the Bill is passed into law and recommending of new regulations to the relevant authorities

Risk Oversight

Capitals Impacted

Financial Capital

Intellectual Capital

Manufactured Capital

Social and Relationship Capital

Stakeholders Impacted

Regulators & Legislators

The Committee is satisfied that it has fulfilled its mandate as set out in the Committee’s terms of reference and work plan as required in the Board Charter during the period under review.

Board committee activities 2020/2021 and outlook for the year ahead

Investments and Project Monitoring Committee (IPMC)

Chairperson

Patrick Ocailap

Members

Peninnah Tukamwesiga
Richard Byarugaba
Peter Christopher Werikhe
Mugole Mauku D. Stephen
Aggrey Kibenge

Professional Advisors

Kenneth Ssemwogerere
Felix Okoboi

Investments and Project Monitoring Committee (IPMC)

The Investments and Project Monitoring Committee (IPMC) of the Board is responsible for assisting the Board to fulfill its oversight responsibility as provided under Section 30 of the NSSF Act, which provides:

'All monies in the Fund, including the reserve account, which are not for the time being required to be applied for the purpose of the Fund shall be invested in such investments as may be determined by the Board in consultation with the Minister'.

The main responsibilities of the Committee:

- Provide a deeper understanding of investment activities to the Board
- Review and recommend all investment proposals to the Board for consideration
- Recommend an investment strategy, policies and guidelines to the Board for approval
- Review and recommend project concepts, strategies and budgets to the Board

- Review and recommend design concepts and master plans to the Board or changes thereto
- Review performance of real estate projects, equities, and fixed income on a quarterly basis in line with the targets
- Review the performance of the Fund Managers at least twice a year

IPMC Committee’s key activities in FY 2020/2021 included:

Key activities:

Reviewing the economies in the Fund’s investment universe and its implication on investment strategy
Reviewing the banking sector and its impact on the Fund activities
A credit review of the Fund’s bond investments in Kakira Sugar Limited
Considered the proposed 20% midterm access and its impact on Fund operations
Reviewed the merger of the NSSF and National Agricultural Research Organisation retirement scheme
Reviewed the performance of the Fund’s investee companies
Reviewed performance of the Fund Managers

Key activities:

Consideration of the URBRA Inspection report, its findings and recommendations
Reviewed the Investments Stewardship Code
Reviewed the performance of the Board Consultants
Reviewed performance of real estate projects, equities and fixed income on a quarterly basis in line with the targets
Monitored the occupancy and rent collections of all commercial properties owned by the Fund
Reviewed the Investment Policy Statement (IPS)

Challenges during FY 2020/2021

The impact of Covid-19 on the Fund’s investments and resultant project delays
Uncertainties in the market
The current NSSF regulatory regime that is not favourable for investments outside East Africa

Key focus for the following year FY 2021/2022

Review of the Fund’s Strategic asset allocation in preparation for the enactment of the NSSF Amendment Act that seeks to introduce payment of a midterm access benefit
Encouraging proactive monitoring of equities, fixed income and real estate assets classes
Marketing of the Fund projects to drive occupancy and sales levels
Managing the impact of the pandemic and preparing for midterm access, ensuring decisions are made for the long-term benefit of our members
Emphasis on Environmental Social and Governance issues in investments decision making

Capitals Impacted

Financial Capital

Intellectual Capital

Manufactured Capital

Social and Relationship Capital

Stakeholders Impacted

Members

Suppliers

The Investments and Project Monitoring Committee of the Board complied with its mandate for the year under review. All the scheduled meetings were held.

Board committee activities 2020/2021 and outlook for the year ahead

Finance Committee

Chairperson

Isaac Magoola

Members

Patrick Ocailap
Florence Namatta Mawejje
Mugole Mauku D. Stephen
Richard Byarugaba

Finance Committee

The role of the Finance Committee of the Board is to assist the Board to fulfill its oversight responsibility and mandate in the following key areas:

The main responsibilities of the Committee:

- Determination of the annual and supplementary budget: involves submitting approval estimates of the Fund’s income to the Minster
- Review and approval of audited financial statements
- Review provision of proper books of accounts and records in respect to the Fund’s financial transactions, assets and liabilities

- Recommends the interest rate for declaration depending on the Fund’s realised income
- Effective financial management of the Fund and of its assets
- Review of the Fund’s accounting policies and principles

The Finance Committee’s key activities in FY 2020/2021 included review, monitoring and approval of:

Key activities:

The proposed interest rate
Financial performance
The NSSF Budget

Key activities:

Procurement for several real estate projects, IT systems, computer equipment and digitalisation at the Fund
Strategic targets and performance measurements
The financial statements and other information to be provided to the members to ensure that they represent a clear and accurate assessment of the Fund’s position and performance

Challenges during FY 2020/2021

The impact of Covid-19 on the growth of collections because of the closure of key sectors, such as education and hospitality which were significantly impacted by the pandemic
The delay to onboard several critical IT system solutions, i.e. PAS as a result of the pandemic
Closure of key verification partners and the lockdown period affected the verification process at the Fund

Key focus for the following year FY 2021/2022

Accelerate more digitalization of the Fund services by embracing additional digital solutions
Emphasis on the usage of e-channels given the Covid-19 pandemic
More emphasis for financial literacy for members’

Capitals Impacted

Financial Capital

Intellectual Capital

Natural Capital

Manufactured Capital

Social and Relationship Capital

Stakeholders Impacted

Members

Suppliers

Communities

The Finance Committee of the Board complied with its mandate for the year under review. All the scheduled meetings were held.

Board committee activities 2020/2021 and outlook for the year ahead

Staff Administration and Corporate Affairs Committee (SACA)

Chairperson

Florence Namatta Mawejje

Members

Peninnah Tukamwesiga
Fred Bamwesigye
Isaac Magoola
Richard Byarugaba

Staff Administration and Corporate Affairs Committee (SACA)

The Staff Administration and Corporate Affairs Committee (SACA) of the Board is responsible for:

- Effective and efficient administration and management of the Fund by establishing appropriate policies regarding staff, administration and corporate affairs
- Appropriate organisation structure to support execution of strategy
- Oversight of management of corporate services such as marketing, public relations, transport and records

SACA Committee’s key activities in FY 2020/2021 included the following:

Key activities:

Review and recommendation of the Work from Home and Corporate Social Responsibility Policy
Oversight of the transition of business operations to remote working
Considered the job description of the Chief Information Officer
Review of the staff appraisal moderation

Key activities:

Review of the balance scorecards for all departments
Oversight of the talent management framework
Review of the impact of Covid-19 on staff and recommended mechanisms for staff protection and safety
Emphasis on staff mental health and wellbeing as a result of the pandemic
Oversight of the organisational restructuring in preparation for implications of the NSSF Act amendments

Challenges during FY 2020/2021

Delayed regulatory reforms and the public outcry for midterm access from members
Impact on certain operations as a result of remote working practices
Staff anxiety and stress, and that of their families as a result of the Covid-19 pandemic
Postponement of a number of the Fund’s key corporate affairs activities as a result of the pandemic

Key focus for the following year FY 2021/2022

Strengthening gender diversity at top management and senior management level
Monitoring and oversight of structural changes following the organisational redesign
Upskilling of staff as a result of digitalisation and expectations of the new work environment
Oversight of talent management
Updating the Fund retention strategy in light of the new structure
Embedding an aggressive talent managing and succession planning strategies at all levels to ensure we have strong successors for all critical roles
Maintaining high levels of employee engagement
Adapting our resourcing to a virtual recruitment model
More aggressive stakeholder management especially as the Fund undergoes transformation

Capitals Impacted

Human Capital

Intellectual Capital

Natural Capital

Manufactured Capital

Social and Relationship Capital

Stakeholders Impacted

Members

Employees

Regulators & Legislators

Communities

The Staff Administration and Corporate Affairs Committee of the Board complied with its mandate for the year under review. All the scheduled meetings were held.

In aligning to KING IV principles, the Fund considered the formalisation of a Group, Transformation, Social and Ethics Committee (GTSEC) during the reporting period, however it is confident that the current governance structures have sufficient oversight of the following responsibilities:

Responsibilities	NSSF Board Committee oversight
Social and economic development anti-corruption and bribery human rights promotion of equality	Staff and Corporate Affairs Committee
Ethics monitoring of reported ethics cases and investigations	Audit and Risk Assurance Committee
Environment responsible consumption impact of Fund operations on the environment	Investments and Project Monitoring Committee
Stakeholder engagement and management relationships with key stakeholders	Staff and Corporate Affairs Committee
Sustainability and community development development of communities through CSR activities	Staff and Corporate Affairs Committee