Materiality determination process and material matters

Material matters are those issues that could substantially affect our ability to create value in the short, medium and long term. These matters influence our strategy and how we manage our associated risks, as well as opportunities we explore as a result of these factors. The process we follow to determine our material matters is as follows:

Identification

through ongoing cross collaboration

Identification of material matters are identified by:

  • Analysing our operating context: Scanning our internal and external environment
  • Ongoing engagement: Collaboration with key internal and external stakeholders to establish material interests, emerging risks and opportunities
  • Resources that inform our business model: Financial, Intellectual, Manufactured, Human, Social and Relationship and Natural capitals

Prioritisation

through frequent engagement

Material matters are prioritised by:

  • Analysing impact: Identifying materiality themes and those that have the biggest impact on creating value and sustainability
  • Exco engagement: Facilitating discussions with Exco and Senior management to take an enterprise view and applying integrated thinking
  • Board insights: Holding discussions with the Board and obtaining insights into key issues tabled at Board committee meetings

Monitoring

through governance structures

Material matters are monitored by:

  • Exco: The Executive Committee who assumes responsibility for the material matters before submission to the Board for approval
  • Board: The Board has ultimate oversight of monitoring material matters and tracking progress of response strategies
  • Sub-committees of the Board: The Board assigns accountability for oversight of material matters to the respective Board sub-committees
  • Balanced Scorecard measures: Key Performance Indicators are defined for each of the iHEALTh strategic priorities to measure results
Materiality Theme Material Matters Importance to SANBS in delivering value Risks
Human Capital: Culture and Capacity
Capitals impacted
Strategic Priorities
Top Risks
    CAPACITY
  • New work environment (hybrid of work from home/remotely; redeployment; digital learning platforms)
  • Staff wellness in adapting to new ways of work
  • Equipping staff with new capabilities required for the future world of work
  • #360 degree leadership assessments and implementation of actions, succession planning, exchange programmes, creating a chain of promotional opportunities for leaders
  • Key vacant posts -aim for 70% internal appointments
CULTURE
  • Embark on realigned reward and recognition approach
  • Leadership depth – developing leaders to execute culture transformation
  • Ethical leadership, strategy, performance measurements, innovation
  • Culture/change initiative (DNA)
  • Ethics (Human Capital and Leadership)/embedding culture
RESHAPING OUR BUSINESS FOR THE FUTURE
  • The widespread devastation caused by Covid-19 has disrupted lives, livelihoods, communities and businesses worldwide
  • To sustain a positive culture and the long-term health of our organisation, leadership practices are regularly reviewed
  • We recognise the importance of our employees as a key stakeholder in executing our strategy and to deliver positive results across all metrics in our scorecard
  • We are committed to ongoing development, support and the creation of an environment conducive to a thriving, high-performance workforce
Risks
  • Inability to fill vacant postst
  • Unavailability of staff due to Covid-19 risks
  • Lack of leadership support
  • Inability to retain talent
  • Limited change management
  • Insufficient skills and required competencies to execute the iHEALTh strategy
Opportunities and strategic response
Reshape our business and our people to remain relevant for the future
Capacity
  • Introduction of the remote work policy; equipping staff with the requisite tools and support to ensure continuity of operations
  • Staff wellbeing provided through the “Better Me” programme; with a focus on 3 key areas of employee wellness which include mental, nutritional and physical wellness
  • Equipping staff with new capabilities required for the future world of work - the RAD Academy has been established to create leaders and employees ‘fit for the future’
  • Fixed-term contracts introduced to manage vacant posts
Culture
  • Our leadership have been through a detailed process of refreshing our values and aligning them to the strategic objectives
  • Co-created a Values-Centred Leadership brand (manifesto) and a change toolkit for all our leaders to use in staff engagements. 38 change champions throughout the business have been trained
  • Diversity and inclusion webinars have been extended to all employees to begin candid conversations about feeling part of the SANBS family
  • SANBS Ethics Management Strategy and Plan - Ethics Ambassadors will be appointed and trained to facilitate the effectiveness of the Ethics Management Framework
  • Board commitment statement (ethics) – a demonstration by leadership
Outlook for the year ahead
  • Realign management structures that are process rather than operations (silo) based, ensuring integration across our entire value chain
  • Convert the staff application and response handling process to an online workflow to align to our digitalisation strategy and the Enterprise Information Management Project
  • Continue to strengthen the core capabilities of the Senior Leadership through the RAD Academy – particularly as it relates to working and managing people/teams in a digital environment
  • Use #360 data for all internal promotional opportunities (succession planning) and continue to develop our ability to adapt to the changing world of work
  • Seamless integration of Ethics into the purpose, vision, and strategic goals of SANBS
Materiality Theme Material Matters Importance to SANBS in delivering value Risks
Meeting Blood Demand
Capitals impacted
Strategic Priorities
Top Risks
  • Blood safety and supply (given fears surrounding Coronavirus/unrest) and days covered
  • Patient Blood Management (PBM)
  • Appropriate usage, distribution and reduction of waste, while driving down cost
  • True demand/potential demand (changing landscape depending on financial resources/access - effect on demand)
  • Blood supply (given Covid-19 concerns, changing collections footprint, strategies deployed to reach donors)
DEMAND, SAFETY AND SUPPLY
  • In living up to our purpose; “Trusted to save lives” the SANBS promise is to ensure sufficient blood supply for the people of South Africa
  • It is imperative for the SANBS to have its blood and blood products made available to all, irrespective of distance
  • We provide trusted blood products and services, and these need to be available to all patients. We must be able to meet growing expectations and demands
Risks
  • Decrease in donor base due to fears about safety during the pandemic/unrest and inability to donate due to lockdown restrictions
  • Shortage of blood to meet demand
Opportunities and strategic response
  • The successful use of the 6-bed mobile donor centre
  • The PBM team effectively concentrated on developing and distributing high-quality, patient-focused reports to hospitals and provincial offices and developing guiding documents for healthcare managers and workers on the value and use of these patient-centric reports
  • The PBM team also successfully launched their “increased digital footprint” plan to support hospitals and train healthcare workers amidst the Covid-19 pandemic
  • Appropriate usage, distribution and reduction of waste
Outlook for the year ahead
  • Increase the number of functioning mobile donor centres to reach a wider donor base
  • Progress with licensing and way forward with the Civil Aviation Authority (CAA) to deploy drones
  • Rollout of additional smart fridges to hospitals, primarily in rural areas
  • Educational tours for schools and universities to encourage the youth to donate at the Mount Edgecombe campus
Materiality Theme Material Matters Importance to SANBS in delivering value Risks
Future Changing World
Capitals impacted
Strategic Priorities
Top Risks
  • Systems Innovation (BECS, ERP, inventory optimisation, cloud adoption, drones, data optimisation, pathogen reduction, smart fridges – logistics, automation, mobility and digitisation of processes, including digital signatures)
  • Innovative solutions to enhance donor wellness and experience
  • Mount Edgecombe – successful migration post construction, ‘Journey of Blood’ experience, including appeal to young donors
  • Improved patient care through cellular therapies and genetic testing
  • RAD Academy – outward focus on external stakeholders: regional, Africa and other countries
  • Constantia Kloof partial upgrades (post exploring alternative sites)
FUTURE PROOF SANBS
  • Covid-19 provided opportunities to reshape our business model and relook how we remain sustainable in the future, being mindful of protecting people, the planet and maintaining surplus, referred to as “the triple bottom line”
  • Innovation is our path towards future success with a focus on continuously protecting donors and patients
  • Our strategy remains clear and sharply defined and is designed to future-proof our organisation
  • We continue to be an organisation on the move within a fast changing macro and microenvironment, significantly affected by the ongoing impact of the pandemic and more recently widescale unrest
Risks
  • Inability of SANBS to contribute and respond to changing needs of healthcare
  • Failure to innovate and advance technology to meet future needs
Opportunities and strategic response
  • Expand our cellular therapies footprint - SANBS has embarked on a multi-year project to develop a CellTAN laboratory which will conform to international guidelines and be GMP and JACIE accredited
  • Devise further innovative solutions to collect and deliver blood, ensuring safety of donors and patients
  • Accelerate process automation and digitalisation
Outlook for the year ahead
  • Through the RAD Academy, we plan to reach out to our neighbouring countries to form regional collaborations aimed at knowledge sharing, business continuity support and general development
  • Increased data analytics and intelligence to inform decision making and enhance operational efficiencies through the implementation of a modernised Blood Establishment Computer System (BECS)
  • Expand on the multiple national and international collaborations established during COVID-19, increase SANBS profile in various ISBT, AABB and related committees and sub-committees
  • Increase distribution of mobile donor centres
  • Progress with licensing and way forward with the Civil Aviation Authority (CAA) to deploy drones
  • Rollout of additional smart fridges to hospitals, primarily in rural areas
Materiality Theme Material Matters Importance to SANBS in delivering value Risks
Financial and Organisational Sustainability
Capitals impacted
Strategic Priorities
Top Risks
  • Financial: Income – collections
  • Good governance – solvent and stable organisation
  • Cost push – inflation and currency volatility and impact on procurement of goods from abroad
  • Increased stock holding to ensure continued availability)
  • Costing of blood products (pushback)
  • Working with other SA Blood Partners (synergies WCBS) and NBI etc
  • Stakeholder engagement - Department of Health
  • Stakeholder Survey
  • Reputation management
  • Board succession given the number of experienced directors that will retire shortly
  • NomCom focus on replacements
  • BBBEE (level 5)
SUSTAINABILITY OF SANBS OPERATIONS
  • Financial stability – maintain self- funded operations
  • Leadership stability
  • Delivering sustainable value to key stakeholders
  • Continued stock availability to meet demand
Risks
  • Inability to collect outstanding debt
  • Currency volatility - increasing cost of procurement
  • Delays in external supply chain
  • Inability to fill key leadership positions
  • Reputational risk – brand erosion
  • Inability to meet full demand for blood products
Opportunities and strategic response
  • A new debt collection company was procured to assist with collections from private patients
  • Robust succession planning – ability to fulfil key leadership positions internally
  • Current skills mapping to ideals skills required for effective Board and consideration of skills lost at end of directors tenures and/or resignations
  • Inventory Optimisation project (the system) to achieve the objective of inventory visibility throughout the value chain
Outlook for the year ahead
  • Focussed efforts on increasing debt collections and engagements with medical aids to collect long outstanding claims
  • Build on succession planning and developing leadership skills to promote internally
Materiality Theme Material Matters Importance to SANBS in delivering value Risks
Covid-19
Capitals impacted
Strategic Priorities
Top Risks
  • Business resilience demonstrated in Covid-19 environment and ongoing
  • R&D – involvement in clinical trials (convalescent plasma) and funding grants
  • Concerns about meeting our mandate during lockdown
  • Driving innovation responsive to Covid-19
  • Agility – decision making capability
AGILE AND RESILIENT BUSINIESS
  • Covid-19 has provided an opportunity to reshape our business model and relook how we remain sustainable in the future, being mindful of protecting people, the planet and maintaining profit, referred to as “the triple bottom line”
Risks
  • Exposure of staff, donors and patients to the Covid-19 virus
  • Information security breaches and cyber attacks
  • Negative impact on staff productivity and wellness
  • Stability of IT systems
  • Unavailability of staff due to risk of infection
Opportunities and strategic response
  • Formal adoption of remote and flexible working practices
  • Strict adherence to Covid-19 regulations and safety protocols
  • Infection Prevention and Control measures were successfully implemented to ensure staff, donor and patient safety in meeting Covid-19 regulations
  • Ensuring staff were provided with the necessary resources to work remotely
  • Investigation into the use of convalescent plasma as a potential treatment option for Covid-19 and a large-scale, national sero-prevalence study, the results of which have been used by, among others, the Ministerial Advisory Committee and Modelling Consortium
  • Ability to meaningfully contribute to the national and international research efforts aimed at better understanding and managing Covid-19
Outlook for the year ahead
  • Implementation of our revised Target Operating Model
  • Combination of work remotely where possible as well as at SANBS facilities
  • Extent and impact of anti-vaccination sentiment is uncertain
Materiality Theme Material Matters Importance to SANBS in delivering value Risks
Regulatory Landscape
Capitals impacted
Strategic Priorities
Top Risks
  • NHI – implications (risks and opportunities)
  • SAHPRA – intending to regulate blood products
  • Regulation affecting information – POPI – first time scrutiny and implication of 16 -18 year old donors – informed consent requirement
  • International standards by accreditation across all processes
MEETING REGULATORY REQUIREMENTS
  • With the shrinking tax base, there are uncertainties as to how the NHI will be structured and funded and potential limitation on private medical schemes. This could potentially have a direct impact on SANBS revenue streams as medical schemes become more expensive. Members may resign from medical schemes which could result in an increase in public sector patients, placing further strain on debt collections for SANBS
  • There are also moves afoot for SAHPRA to regulate blood products and we are mindful of regulations affecting the use of information
Risks
  • Non-compliance with regulatory and best practice standards
  • Negative impact on revenue streams
Opportunities and strategic response
  • Continued strengthening of information security and safety protocols - compliance with the Protection of Personal Information Act (POPIA)
  • Implementation of ISO 15189 requirements for quality and competence is an international standard that specifies the quality management system requirements particular to medical laboratories
  • Ongoing engagement with the National Department of Health and other stakeholders, in anticipation of requirements
Outlook for the year ahead
  • Continuing uncertainty as to the impact of the National Health Insurance (NHI) implementation on SANBS’ operations
  • Burden and cost of compliance in general, with POPIA in particular (this is new legislation which could potentially be an onerous compliance burden)
  • Impact of a potentially deteriorating SA healthcare system on SANBS
  • Our quality remains of the highest standard having achieved 100% ISO 15189 accreditation of our laboratories and Donor Centres. Groundwork for ISO 9001 accreditation for our Support Services will be done in FY 2021/2022 in preparation for accreditation in the financial year thereafter
Materiality Theme Material Matters Importance to SANBS in delivering value Risks
Environmental Sustainability
Capitals impacted
Strategic Priorities
Top Risks
  • Committed Greening Programme
  • Targeted reduction in carbon emissions
  • Increased use of technology to reduce travel
  • Adoption of alternative energy and water sources
  • Recycling of non-healthcare waste
  • Sustainable operations (paperless, less travel, hybrid meetings, etc)
  • The Mount Edgecombe site achieved a 5 star green building rating for design
CONTRIBUTING TO GLOBAL EFFORTS TO COMBAT CLIMATE CHANGE
  • Educate staff on the importance of ESG and changing the way we operate
  • Environmental stability – SANBS impact on the environment and use of natural capital
  • Maintain dashboards and reports to monitor progress
  • Ensure funding made available for new infrastructure
Risks
  • Negative impact of SANBS on the environment
  • Resistance from staff to change
  • Virtual audits and assessments associated with quality failures in long term
  • Reputational risk relating to SANBS not being seen to be actively contributing to environmental sustainability
Opportunities and strategic response
  • Contributing to global climate change initiatives through sustainable practices
  • Reduced operating costs in the long term
  • Accelerate recycling of general waste across all SANBS sites
  • Rapid return on investment through adoption of alternative energy sources
  • Process and issue of blood closer to source to minimise travel and reduce C02 emissions
  • Collaborate with suppliers to reduce waste generation
  • Showcase SANBS’s commitment to our greening strategy
  • Implementation of digital signatures to create a paperless environment and solidify information governance and traceability
  • Replicate greening achieved in Mt Edgecombe in other SANBS facilities
Outlook for the year ahead
  • Improve awareness of our environmental impact through increased staff engagement
  • Foster a low carbon culture under which procurement and other decisions are made with the overall carbon reduction objective in mind
  • Use the solar installation at Mt Edgecombe as a baseline for rollout to other SANBS owned properties
  • Continue with the phased rollout of LED bulbs at SANBS owned properties
  • Rollout of water monitoring devices
  • Foster a culture where water conservation becomes innate habit
  • Foster a culture where waste management and the impact on the environment through increased travel and printing becomes standard practice
  • Expedite the use of drones
Materiality Theme Material Matters Importance to SANBS in delivering value Risks
Economic, Social and Political Impact
Capitals impacted
Strategic Priorities
Top Risks
  • Politically related and service delivery unrest resulting in disruptions to SANBS operations
  • Severe economic and financial constraints leading to inability to pay for services rendered by SANBS to public and private sector
  • Diminishing donor base due to donors facing unemployment and other day to day challenges
  • Contribute to social transformation through initiatives to improve BBBEE
RESILIENCE OF SANBS IN RESPONDING TO UNCERTAINTY OF THE EXTERNAL ENVIRONMENT
  • The social and economic upheaval has tested the resilience and continuity of our operations, highlighted the importance of robust risk management and business continuity, and created opportunities for us to improve our organisational responsiveness and agility
  • Robustness of business continuity plans to mitigate against disruptions
  • Manage costs and tariff increases
  • Increase stakeholder interactions with a focus on the importance of blood to the health care sector and cost drivers related to the service provided
  • Change model of blood collections to be accessible to donors
Risks
  • Failure of customers to pay for services rendered
  • Widespread unrest resulting in loss of assets (vehicles, buildings)
  • Increased risks posed to staff
Opportunities and strategic response
  • Position SANBS as a strategic partner in healthcare delivery
  • Ongoing identification of emerging risks in response to the changing external environment
  • Increase deployment of innovative solutions to expand donor base
  • Contributing to economic and social upliftment through BBBEE initiatives
Outlook for the year ahead
  • Enhancement of organisational business continuity plans to mitigate against potential business disruptions
  • Increase deployment of mobile donor centres
  • Further improvement of BBBEE level