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OUR GOVERNANCE

Giving effect to corporate governance/alignment to King IVTM principles and the UK Combined Code

The tables that follow, are structured around the 5 core categories of King IVTM. These are:

Leadership, ethics and corporate citizenship

(principles 1-3)

Strategy, performance and reporting

(principles 4-5)

Governing structures and delegation of authority

(principles 6-10)

Governance of functional areas

(principles 11-15)

Stakeholder relationships

(principles 16-17)

In the tables we show how the Fund has embraced and aligned to King IVTM Principles (and related UK Corporate Governance Code elements) in their efforts to achieve the spirit of what is attended by the 5 categories above.

How the Board aligns to King IVTM Principles and the UK Corporate Governance

Principles 1-3: Leadership, Ethics and Corporate Citizenship

The Board sets the tone for effective and ethical leadership, promoting an ethical culture and being a good corporate citizen.

The Board has established the company’s purpose, values and strategy and is satisfied that these and its culture are aligned. The Board has ensured that mechanisms are in place for the workforce to raise concerns, with proportionate and independent investigation of such matters and follow-up action. The Board ensures effective engagement with, and encourages participation from, the workforce and other stakeholders.

Principles and our practices/activities

LEADERSHIP, ETHICS AND CORPORATE CITIZENSHIP

The governing body should:

  • P1 - lead ethically.
  • P2 - govern ethics of the organisation that supports the establishment of an ethical culture.
  • P3 - ensure that the organisation is seen to be a responsible corporate citizen.

Practices that demonstrate the application of the principles.

  • The Board sets the tone for accountability, ethics and integrity, acting in the best interests of all stakeholders.
  • Directors at all times exuded integrity and accountability, informed judgment, financial literacy, and willingly and candidly discussed issues, were committed to the Fund and ensured that the Fund maintained a positive image within the industry, national economy and general public.
  • The Board implements procedures and guidance to deal with actual or potential conflicts of interest.
  • Directors have an opportunity to declare any conflicts of interest at Board meetings.
  • Through the Fund’s values, we commit to be ethical and honest and thereby inspire trust, in all our business dealings.
  • A formal ethics policy and code of conduct is in place, and dedicated resources to embed requirements and investigate ethics and integrity concerns reported as endorsed by the Fund’s ‘Whistleblowing Policy’.
  • Our Managing Director is the formal custodian of the code of ethics and is ultimately responsible for its implementation.
  • Sustainability is deep rooted in our DNA, and our purpose-driven leadership model continues to place value creation for our stakeholders and wider society.Read our Sustainability and CSR write-up.
  • Our objectives are focused on giving back to the community and promoting education, health, financial wellness/literacy and the environment through our CSR activities in support of the Sustainable Development goals.

Outcomes – how these achieve/give effect to the principles

  • Continuous monitoring and reporting on the ethics performance of the organisation.
  • Ethical leadership and transparency throughout the organisation.
  • Values embodied by NSSF drive a sound culture and inform how we expect our employees to behave, as well as our stakeholders during their interaction with us.
  • Adherence to the highest standards of responsible business practice.
  • Committed to acting in a manner that is responsible and transparent through promotion of sustainable business practices, environment, employee and community development, supporting achievement of prioritised SDGs.
  • Ethics cases are investigated by Internal Audit in a confidential and timely manner. Investigation reports are submitted to Management and the Audit and Risk Assurance Committee for oversight.
  • Oversight of sustainability takes place through the Staff Administration and Corporate Affairs Committee.

Principles 4-5: Strategy, Performance and Reporting

The Board is committed to optimising performance, value creation and sustainability.

The NSSF is led by an effective and entrepreneurial Board, promoting long term sustainable success of the Fund, generating value for shareholders and contributing to wider society. The Board understands that the organisation’s core purpose, risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of its value creation process. Reports, including our integrated report, are issued that enable stakeholders to make informed assessments about the NSSF’s performance over time and about its prospects.

Principles and our practices/activities

STRATEGY, PERFORMANCE AND REPORTING

The governing body should:

  • P4 - appreciate that the organisation’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process.
  • P5 – ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation’s performance, and its short-, medium-and long-term prospects.

Practices that demonstrate the application of the principles

  • The Board is responsible for the strategic direction of the Fund and has provided an enabling governance framework to support management to achieve its strategic plan by 2025.
  • The Board ensures that the necessary resources are in place for the company to meet its objectives and measure performance against them.
  • The Deputy Managing Director is accountable for strategy execution.
  • Key performance measures are aligned to the strategic objectives which translate into an organisational scorecard, cascading into individual scorecards.
  • We strive to give effect to the reporting requirements of the various leading practice codes/guidance/frameworks and good practice in our industry etc. Read about our report and reporting frameworks.
  • The Board and its committees are supplied with complete and timely information, to enable the Directors to discharge their responsibilities.
  • All Directors have access to the advice of the Corporation Secretary who is responsible for advising the Board, through the Chairman, on matters of corporate governance.

Outcomes – how these achieve/give effect to the principles

  • Maintained stability of operations without compromising on productivity or quality.
  • Good progress with achieving strategic objectives.
  • Reporting of accurate, complete and balanced information in the Integrated Report.
  • The Board and its committees are supplied with complete and timely information from management, to enable the Directors to discharge their responsibilities.
  • Board training included Integrated Reporting to deepen Directors’ understanding of the requirements of the International <IR> Framework.
  • Our integrated report illustrates a balanced view of our entire operations and financial performance for the period under review.

Principles 6-10: Governing structures and delegation

The Board is the custodian of good governance.

Our Board serves as the focal point and custodian of governance in our organisation. It is comprised of members with a balance of knowledge, skills, experience and independence to discharge its role and responsibilities. Our Board delegates authority and ensures delegation of authority through its own structures and ensures that performance is evaluated. The Board ensures that it presents a fair, balanced and understandable assessment of the company’s position and prospects.

Principles and our practices/activities

GOVERNING STRUCTURES AND DELEGATION

The governing body should:

  • P6 - serve as the focal point and custodian of corporate governance in the organisation.
  • P7 - comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively.
  • P8 - ensure that its arrangements for delegation within its own structures promote independent judgement and assist with balance of power and the effective discharge of its duties.
  • P9 - ensure that the evaluation of its own performance and that of its committees, its chair and its individual members, support continued improvement in its performance and effectiveness.
  • P10 - ensure that the appointment of, and delegation to management contribute to role clarity and the effective exercise of authority and responsibilities. The governing body should appoint the CEO/MD.

Practices that demonstrate the application of the principles.

  • The Fund’s Governance structure enables interaction between the Management, Members and the Board.
  • The Board is supported by four committees. These committees have delegated responsibility to assist in specific specialist matters on a collaborative basis and provide reports of their activities and recommendations to the Board on a quarterly basis or as often as is necessary.
  • Management, led by the Managing Director, have the authority to manage and control the day-to-day affairs of the Fund in relation to matters other than those reserved to the Board.
  • Performance evaluation of the Board to assess effectiveness was conducted. Annual evaluation of the Board considers its composition, diversity and how effectively members work together to achieve objectives. Individual evaluations demonstrate whether each director continues to contribute effectively.
  • Assessment of Board performance and progress towards our goal to become the social security provider of choice.
  • Leadership changes: Mr. Aggrey Kibenge was appointed as a member of the 11th Board. He was subsequently appointed to the IPMC and ARC Board Committees.
  • As the custodian of good governance, the Board Charter is reviewed annually and provides minimum standards and guidelines for the Board in the execution of their duties.

Outcomes – how these achieve/give effect to the principles

  • Our robust processes ensure that the delegation flows through the Board and its committees to the MD and Executive Committee into the organisation. At the same time, accountability flows upwards from the Fund to its members. This process helps to ensure alignment and open communication with our members and all our stakeholders. (See our Governance Structure).
  • Continued improvement of Board efficacy and performance.
  • Ongoing Board discussions and review of the effectiveness of:
    • Our performance today and our progress towards our goal to become the social security provider of choice.
    • Our brand and reputation and how we can ensure that our behaviours and processes protect us for the future.
    • Our people, and how we can create a high performing team, potential for future development and succession along with appropriate motivation and reward.
    • Our customers, suppliers and local communities ensuring we treat them all fairly and respectfully.
    • Our members and how we can communicate openly on the way we manage and challenge the business.
    • Updates from our Board committees and management on legislation and proposed consultations that may affect the organisation’s legal and regulatory obligations, including proposals to reform the pension sector
    • Assurance that governance structures remain appropriate for the Fund.
  • Directors are considered by the Board to be independent of management and free from any business relationship or other circumstance that could materially interfere with the exercise of objective, unfettered or independent judgment.

Principles 11-13: Functional governance areas

The Board governs risk, technology and information and compliance with all legal requirements.

The Board ensures adequate and effective controls through risk, technology and information, compliance, remuneration and assurance governance. The Board governs these in a way that supports the organisation in setting and achieving its strategic objectives and ensuring compliance with laws etc to uphold its reputation as an ethical and good corporate citizen.

Principles and our practices/activities

FUNCTIONAL GOVERNANCE AREAS

The Board governs:

  • P11 & P12 - risk, technology and information in a way that supports the Fund in setting and achieving its strategic objectives.
  • P13 - compliance with applicable laws and adopts non-binding rules, codes and standards in a way that supports the Fund being ethical and a good corporate citizen.

Practices that demonstrate the application of the principles

Risk Governance

  • The Board is mandated to ensure good corporate governance and effective risk management in the Fund. The Board exercises this mandate through its committees which include Investment and Project Committee, Finance Committee, Staff Administration and Corporate Affairs Committee, and the Audit and Risk Assurance Committee, which is in charge of risk management and the integrity of financial reporting.
  • Through the ongoing materiality determination process, material matters and emerging risks are identified which could significantly impact the Fund's business model and ability to deliver value in the short, medium and long term. Read our Risk Management report.

Technology and information governance

  • As part of the Board charter, the Board has oversight of the Information and Technology Policy, systems and strategies. The Finance committee is mandated to assist the Board in fulfilling its oversight responsibility for technology governance.
  • With the accelerated digitalisation strategy and ongoing quest to improve efficiency of operational processes and communication through automation and use of digital platforms, the Fund has invested heavily in information security.

Compliance governance

  • The Fund is committed to complying with all the relevant legislation, especially prudential regulation.
  • The Board oversees compliance with legislation, regulations, and codes of best practice governing the retirement benefits sector through the Audit, Risk and Assurance Committee.
  • The Board has established policies and processes to guide legal compliance and delivery of services. See our regulators write-up.

Outcomes – how these achieve/give effect to the principles

Risk governance

  • Risk management is regarded as an integral part of business activities.
  • Effective risk management continues to protect and create value for the Fund as we seek to identify both risks and oportunities
  • Our effective risk management, and a robust control environment, is premised on the efficient workings of the three lines of defence model - a key component to ensure a clear separation of roles between risk-taking functions and risk-control functions.

Technology and information governance

  • Appropriate preventive, detective, and corrective controls have been implemented and the strength of the security infrastructure is continuously tested through penetration tests and vulnerability assessments.
  • Uninterrupted IT services and system stability.

Compliance governance

  • The Fund continuously monitors the status of regulatory relationships to enhance proactive engagement across key regulatory changes and areas of focus.
  • Highest standards of sound governance, including transparency, accountability and fairness to its members, the Regulators, and all our stakeholders.
  • Management continuously monitors its compliance with the key regulations through its quarterly reports to the Board.

Principle 14: Remuneration governance

Our Board ensures fair, responsible and transparent remuneration practices.

Our remuneration policies and practices are designed to support strategy and promote long-term sustainable success. The Board exercises independent judgement and discretion when authorising remuneration outcomes, taking account of company and individual performance.

Principles and our practices/activities

REMUNERATION GOVERNANCE

The governing body should:

  • P14 - ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term.

Practices that demonstrate the application of the principles

  • The Board, through the Staff Administration and Corporate Affairs Committee has established human resource policies governing the terms and conditions of employment,remuneration, training, promotions, discipline and other benefits which are fair and will attract, motivate and retain high calibre staff. Read our Remuneration Report.

Outcomes – how these achieve/give effect to the principles

  • The reward and remuneration structures are directly linked to KPIs defined under each strategic objective, ensuring performance is linked to business performance as well as individual performance, thereby promoting a high-performance culture and achievement of Strategy.
  • Sustainable reward is carried out responsibly and the Fund’s reward framework is flexible to meet the changing needs of both the business and economy.

Principle 15: Assurance

Our Board ensures the enabling of an effective control environment.

The Board ensures that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision making and of the company’s external reports.

Principles and our practices/activities

ASSURANCE

The governing body should:

  • P15 - ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation’s external reports.

Practices that demonstrate the application of the principles

Internal Audit (IA)

  • IA supports the Board and management to execute their mandate by providing independent objective assurance of the Fund’s operations.
  • Technology has been leveraged to incorporate data consistency and integrity, stronger collaboration among functions, concise information, and real-time visibility to help identify key areas of focus and opportunities to create and protect strategic business value.

Combined assurance

  • The three lines of defence play a complementary role to each other.

External Auditors

  • The ARC reviews the external audit plan with the External Auditor and discusses their approach, nature and scope of work, audit and reporting obligations before the audit commences.
  • The ARC oversees the relationship between the Internal and External Auditors and ensures that the external audit is coordinated with the internal audit programmes.

Outcomes – how these achieve/give effect to the principles

Risk governance

  • Assurance that governance structures remain appropriate and functional for the Fund.
  • Assurance is provided on financial and non-financial information.
  • Key components of the integrated report, such as governance, risk management and controls are assured.
  • Accountability is clear within the three lines of defence model, with assurance providers working together to provide coordinated assurance. (The coordination with assurance providers does not impair the independence of IA).
  • Combined assurance ensures that there is comprehensiveness in terms of coverage, and avoidance of duplication.

Principle 16: Stakeholder relationships

Our Board oversees our stakeholder engagement to ensure their varying interests and influence are catered for.

In order for the company to meet its responsibilities to shareholders and stakeholders, the Board ensures effective engagement with, and encourages participation from, these parties. This stakeholder inclusive approach enables NSSF to gain a deep insight into the needs, interests and expectations of its stakeholders and to follow through with appropriate responses.

Principles and our practices/activities

STAKEHOLDER RELATIONSHIPS

The governing body should:

  • P16 - in the execution of its governance role and responsibilities, adopt a stakeholder inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the Fund over time.

Practices that demonstrate the application of the principles

  • We continually engage with all our stakeholders to understand and respond to their needs, interests and expectations.
    • This helps us to manage the expectations of society, minimise reputational risk and form strong partnerships, which all underpin business sustainability.
  • We seek to continually build strategic partnerships and maintain relationships with our stakeholders.
    • These include the Government, the public, members, and suppliers such as bankers, custodians, administrators and Fund Managers.
  • Ongoing engagement and evaluation of the quality and value we deliver to our stakeholders is vital to address sustainability concerns and interests and inform our strategic priorities. Read about how we engage and create value for our stakeholders.

Outcomes – how these achieve/give effect to the principles

  • Open communication with our stakeholders, based on transparency, trust, and good understanding of expectations.
  • Sound relationships with our stakeholders to underpin business sustainability, ethics and organisational integrity within the social, legal and economic context of the country.

Principle 17: Responsible Investments

Our Board oversees investment of Member funds as required by our legislation.

The Board ensures that responsible investment is practiced by the Fund.

Principles and our practices/activities

RESPONSIBLE INVESTMENTS

The governing body should:

  • P17 - ensure that responsible investment is practised by the organisation to promote the good governance and creation of value by the companies in which it invests.

Practices that demonstrate the application of the principles

  • Approval of investment of Member funds is reserved for the Board in consultation with the Minister of Finance, Planning and Economic Development and this is in line with Section 30 of the NSSF Act.
  • The Fund invests prudently mainly in mature markets whose returns are predictable.
  • The aggressiveness for growth is in the Allocation of Assets and is governed by an Investment policy.
  • In order for the company to meet its responsibilities to shareholders and stakeholders, the Board ensures effective engagement with, and encourages participation from, these parties. Read more in our Chief Investment Officer's Business Review.

Outcomes – how these achieve/give effect to the principles

  • Prudent investment decisions.
  • Stability of returns to members.