Governance and ethics

We are committed to governance and ethics excellence, ensuring that good corporate citizenship is embedded throughout the business. We understand that while our diamonds are exceptionally beautiful, their value is also determined by how they are mined. As such, we supply rough and polished diamonds that are produced and distributed in accordance with the highest ethical and legal standards.

Related sustainability principles

  • Creating a safe and healthy work environment
  • Prioritising the development and well-being of
    our employees
  • Optimising socio-economic benefit
  • Prioritising environmental protection

A snapshot of our performance

  • Every rough diamond recovered is certified through the Kimberley Process
  • Fully compliant with all government regulations and relevant voluntary codes concerning product and service information labelling
  • Zero cases of bribery, corruption and anti-competitive behaviour have been brought against us to date
    (2019: zero)
  • Blockchain technology will allow consumers to track the source of diamonds and consider corporate citizenship

  • Zero incidents of breach of confidentiality and privacy of client information
    (2019: zero)
  • 19 cases of whistleblowing
    (2019: 20)

Related UN SDGs

We launched the first rolling three-year cycle to embed the UN SDGs into our systems, processes, and decision-making during the year. We have committed to the following six goals:

For more information on our approach to integrating these six SDGs into our business operations, please see our UN SDG framework (working towards global goals).

Our challenges

  • Reputation is a very fragile concept – for this reason, any perceived ethical issue has the potential to cause severe reputational damage and subsequently impact on product value; and
  • We are focused in ensuring that all employees and contractors understand and abide by our code of conduct.

Our future

  • Continue to demonstrate our commitment to ethics and governance through our compliance with human rights, ethics, and bribery and corruption prevention; and
  • Enhance human rights understanding and training.

Material issues

Implementing effective ESG strategies, which are managed at a board level

Our context

Gem Diamonds embraces governance excellence at every level. We are committed to being a good corporate citizen. The Board's role is to ensure that good governance and ethics are embedded throughout the organisation. The Board leads by example and has oversight over Group performance and activities. This includes oversight over ESG strategy development and implementation; risk management and mitigation plans; Group innovation; Group efficiencies through the business transformation (BT) and continuous improvement (CI) plans; community involvement and employee health and safety.

Our approach

We use sustainability to drive business success to ensure long-term prosperity for our stakeholders. Our sustainability focus was notably demonstrated in 2020 when, despite severe constraints, our plans were adapted to manage the critical risks that emerged to protect our business and our stakeholders during the pandemic.

Our performance

  • Financial benefits from the BT initiative in 2020 realised;
  • Gem Diamonds is a constituent of the FTSE4 Good Index;
  • Reduced costs and maximised cash flows, and
  • Maintained our status as a responsible, safe and low-cost operation.

Our context

Business integrity and being a good corporate citizen is essential to Gem Diamonds. We recognise each stakeholder's inherent worth in our value chain and work to the highest standards to ensure their human rights are protected; this includes the prevention of forced or child labour, promoting a culture of non-discrimination and ethical leadership. Our human capital policies promote ethical behaviour, which are then reinforced through our code of ethics employee training, and operational checks to ensure that we operate in a manner compliant with the Kimberley Process.

Our approach

We are committed to working ethically and upholding the highest standards. This is supported by our sustainable development framework and our code of ethics. It ensures that we are compliant with relevant government regulations and voluntary codes concerning labelling and product and service information. Strict controls over our supply-chain ensure our contractors avoid slavery, human trafficking, forced or child labour. We adhere to all legislation and regulations of our host countries and where applicable apply international best practice into all human rights-related policies and procedures. We continuously refine our policies and procedures relating to upholding the rights of our employees and project affected communities (PACs).

Employees receive human rights, ethics and values training as part of the Letšeng induction programme. In this training, our code of ethics is explained. Our human capital policies also enforce the fair treatment of employees through negotiated remuneration policies, non-discrimination policies, and through our strict health and safety practices. We vehemently oppose all human rights violations, such as gender, age, religious and racial injustices in the workplace.

We aim to supply our clients with rough and polished diamonds of the highest quality while meeting our responsibilities as an ethical and accountable organisation. Responsible business practices are incorporated into every step of our production journey. This ensures that our diamonds are equally ethical, as they are beautiful.

Our diamonds are exported in accordance with the requirements of the Kimberley Process. This Kimberley Process promotes the ethical sale of rough diamonds from non-conflict jurisdictions. This positively impacts diamond value negating the large-scale negative consequences such as reputational damage, human rights violations and conflict that are associated with diamonds not mined responsibly and exported according to the process. Our regulatory and social licences to operate depends on our reputation, to ethically mine and distribute diamonds, ensuring no human or environmental rights are violated in the process.

We ensure that our diamonds reach the market through recognised legal and ethical channels, all Gem Diamonds' clients undergo a screening process and trade with us is by invitation only. During the screening process, potential clients are vetted using internal anti-money laundering protocols and 'know your client' reviews to ensure compliance with regulatory requirements. The Group is also incorporating blockchain technology in our marketing activities to create greater transparency in the supply chain and bring retail customers closer to the source of their diamond.

To enhance transparency, all relevant information is clearly communicated to our customers – when a diamond tender is concluded, a complete list of the winning bids is electronically circulated to all tender participants thus ensuring a transparent sales process.

Our performance

  • Zero instances of major or significant stakeholder complaints (2018: zero);
  • Fully compliant with the Kimberly Process (2019: fully compliant);
  • Zero cases of breach of client confidentiality (2019: zero);
  • Human rights training included in the Letšeng induction programme;
  • Zero cases of child or forced labour involving Gem Diamonds have ever been reported; and
  • None of our operations have engaged in the relocation or resettlement of any PACs during the reporting period (2019: none).

Our context

The Board is accountable to shareholders and stakeholders concerning Group performance (financial, social, environmental, governance, and health and safety). The Board is committed to corporate citizenship principles and entrenching world-class governance principles – achieved by promoting an ethical culture and embedding good governance at every level of the business. This ensures value is delivered to investors while host nations and PACs benefit from social and environmental upliftment.

Our approach

The Board reviews the composition and chairmanship of its primary Committees annually, always ensuring a balance of Executive and non-Executive Directors so that no individual or group can dominate the Board’s decision-making. In 2020, considerable time was spent assessing the Board and each Committees’ performance through the use of an effectiveness survey. This resulted in the Board tweaking their focus areas to include an increase of the frequency of their strategic discussions, prioritisation of talent and succession planning, the urgency of current and emerging risk management, and increasing the time allocation of Board and Committee meetings to debate and strategise.

The Board is tasked with ensuring medium and long-term value is created for shareholders. To achieve this, the efficient use of the Group resources is prioritised – this is achieved by reviewing the efficiency of the day-to-day operations. Each board member has experience and knowledge of the diamond industry to identify opportunities and enhance operational efficiencies.

The Remuneration Committee considers and determines all remuneration elements of the Chief Executive Officer, the Chief Financial Officer and the senior executive team. The Remuneration Committee also determines the terms and conditions of performance-related remuneration paid by the Company. The Remuneration Committee comprises two independent non-Executive Directors and the Chairman and meets formally at least twice a year. Executive and senior management and external advisers may be invited to attend meetings as the Remuneration Committee considers appropriate.

Our performance

  • Full compliance with the amendments and additions to the UK Corporate Governance Code;
  • Board and Committee performance assessed.

See our Annual Report for more information.

Our context

We continuously work to improve on our corporate governance by understanding legal, regulatory and governance requirements and keeping abreast of industry best practice. By embedding sound corporate governance principles throughout our business, we can create sustainable value for all stakeholders.

Following a successful statutory negotiation process, the mining lease for Letšeng was renewed by the Government of the Kingdom of Lesotho for a period of 20 years. The new lease agreement stipulates the legal and regulatory expectations of our host country, Lesotho. It also provides an updated framework for our partnership with the Lesotho Government, thereby securing the long-term and sustainable future of our operation.

Our approach

We frequently monitor changes to the UK Corporate Governance Code and other relevant standards and implement amendments to our governance policies as necessary.

In 2020, the Board sought to evolve and improve our corporate governance, by implementing the necessary adjustments identified from the UK Corporate Governance Code, and by enhancing our reporting in relation to section 172 of the UK Companies Act 2006 and voluntary disclosures in relation to the Miscellaneous Reporting Regulation (MRR).

Our performance

Our context

Our supply chain is multi-layered and supports our business processes. Our products comprise raw, direct and indirect materials, and services include technical, legal, administrative and professional, and skilled operational labour. Businesses, and particularly those on the mining industry, have an increasing duty of care to ensure that they and their stakeholders, suppliers and partners operate in a manner that enhancing the reputation of the industry rather than tarnish it.

Our approach

We are committed to raising the standards across our pipeline, ensuring our processes, and those of our suppliers align to our code of ethics and reputation in the industry. Our governance processes aim to identify and mitigate risk timeously. Our whistleblowing policy encourages employees to anonymously report any unethical behaviour. All incidents reported are dealt with appropriately.

All procurement undergoes a stringent vetting process. We keep abreast of procurement best-practice and implement improvements to our procurement practices when appropriate. We ensure equal opportunity to tender as a supplier; however, we promote in-country procurement as far as possible. Goods and services companies are vetted to ensure they are reputable companies. Formal contracts are negotiated and signed, where suppliers confirm their adherence to our ethical policies – this ensures our beliefs, culture and performance attitudes are adopted.

We have adopted a zero-tolerance approach to all bribery and corruption and are committed to upholding and complying with the UK Bribery Act requirements. All suppliers must conform to the same zero-tolerance approach. Group internal audit carries out regular reviews of the Group's Anti-Bribery and Corruption Policy to ensure continued compliance with the UK Bribery Act requirements.

Cybersecurity is a critical focus area for the Group. Our operations rely on secure information technology systems (IT) to process and record financial and operating data in our information management systems. If these IT systems are compromised in any way, there could be a material adverse impact on the business.

To ensure cybersecurity, we ensure that our IT controls, processes and systems are built in line with industry-accepted standards. Appropriate back-up procedures are in place, with firewalls set up and other appropriate security applications are in place. We also test our back-up restorations frequently. When appropriate, external consultations with professional advisors occur when there is a need to better understand evolving risks that require mitigating actions be implemented.

Significant progress has been made on identifying, validating and testing technologies that drive early detection using non-mechanical means to liberate diamonds from kimberlite. A pilot plant was constructed at Letšeng to test this innovative technology under various operating conditions. The technology uses scanning technology in conjunction with proprietary imaging and sorting algorithms to detect diamonds within kimberlite; a high-voltage pulse power for non-mechanical fragmentation of composite materials is planned to be used to liberate the encapsulated diamonds.

Our performance

  • Whistleblowing policy expanded with 19 reports logged (2019: 20);
  • Goods and services procured during the year were all procured from reputable companies and in line with our procurement policy;
  • All new suppliers were evaluated by a diverse team, including representatives from several divisions within our Group's operations;
  • All suppliers have signed and agreed to adhere to our ethical and anti-bribery and anti-corruption policies;
  • Technology tested onsite for early identification of diamonds within kimberlite and non-mechanical means of liberating diamonds within kimberlite; and
  • Frequent IT back-up restorations tested.