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Corporate Accountability Review
Corporate governance, transparency and accountability remain the bedrock upon which SABMiller's ongoing pursuit of broad-based business excellence lies. While short-term economic performance must be balanced with social responsibility commitments, our global environment today demands that we consider a longer-term horizon for overall sustainable development – taking into consideration the needs of all our stakeholders.
 
This review provides an outline of our approach to corporate accountability, covering systems and processes and our major economic, social and environmental impacts. A comprehensive account of this triple bottom line performance can be found in the accompanying 2003 Corporate Accountability Report (CAR) as well as on our website: www.sabmiller.com.

SABMiller has a proud tradition of quality management based on a solid foundation of core values, embedded in its understanding of legal and regulatory requirements, stakeholder and societal expectations and current market practices.

To give meaning to this, the company formalised its accountability function some six years ago and has sought continuous improvement through regular evaluation and modification of its systems and processes.

The company's governance structure, detailed in this report and the Corporate Accountability Report (CAR) reflects a broad and integrated approach to the concept. In particular, the corporate accountability and risk assurance committee (CARAC) – chaired by the senior non-executive director, Lord Fellowes – assists the board in the discharge of its duties relating to corporate accountability and associated risk and opportunities in terms of the direction, assurance and reporting for the group.

The committee utilised the services of the group corporate accountability department to progress its activities, and co-opts management and technical specialist input to align the accountability agenda with those of the various strategic business functions and to ensure full representation and participation of all the business units within the group.
 
Accountability Review
Our accountability review is based on a detailed assessment of how each SABMiller operation is giving practical effect to the business principles we espouse. Every quarter a range of their economic, environmental and social impacts are reported and presented for consideration by the board. At year end a thorough review is conducted and published – what follows is a summary of the full CAR for the financial year ended 31 March 2003.

The continued growth in the business, notably the acquisition of Miller Brewing Company, has greatly added to the size and diversity of the non-financial performance and risk management issues which the CAR addresses. So as to present the fullest possible picture, the company's measures have been included ahead of the usual two-year transitional period (the full accountability scope and reporting boundaries can be found in the accompanying CAR).

Economic impacts
This year, the enlarged business received over US$8 billion (excluding associates) in sales from its customers. How that income is used in the business determines our economic impact. More than half is spent with suppliers of raw materials, packaging and other goods and services, thereby sustaining many thousands of jobs in the wider economy. Even though supplies are increasingly sourced globally, more than three quarters of our spending remains in the countries where our operations are located. In South Africa and the USA, we monitor and try to increase the business we do with commercial equity and minority enterprises respectively.

The best measure of how stakeholders benefit from the wealth generated
by the business is cash added value – worth more than US$3.9 billion this year. Governments gain the largest share of the value we create, some 40%, due
to the high level of excise duties and other taxes levied on the group. Our
42,402 employees are the next largest beneficiaries, receiving a quarter.
Providers of capital, both investors and borrowers, received 13% this year.

Environmental impacts
We have again improved our environmental efficiency, a trend reinforced by the inclusion of Miller's performance. Measured against our outputs, we are using less water and energy, and producing less liquid waste. Recycling of other wastes has also increased, now exceeding 90%. However, increased energy efficiency did not lead to reduced relative emissions of carbon dioxide – thought to be the main 'greenhouse gas' – because of changes in energy sources, mainly in the generation of electricity bought from national grids over which we have no control. This year we have also extended our environmental management systems and expanded our reporting, in particular to include biodiversity issues and our hops, barley and sugar cane farms.

Social impacts
 The scale and international reach of our operations is such that many millions of people are affected by our social impacts. At the head of the list are our employees, including 28,000 in associated companies not included in financial reporting but covered in our full accountability review. This year we have introduced a new grading system which ranks our operations in categories to assess progress being made in local businesses on critical human resource management issues. We have, for example, extended our commitment over a range of activities to address HIV/AIDS and continue to make progress on diversity issues, principally in South Africa. Group-wide investment in training was broadly constant outside Africa, where reorganisation regrettably disrupted development plans.

In wider society, we continue to engage with local communities and a broad range
of stakeholders and interested parties. A new group policy on alcohol issues was adopted during the year, and this is being rolled-out to ensure each operation gives effect to its responsibilities, both for its own marketing practices and in educating consumers about the dangers of misuse. We continue to maintain above-board relations with governments and their various regulatory agencies and strictly enforce our ethical conduct policies. During the year, no incidents of bribery were identified.

Looking ahead, many challenges remain: as we incrementally manage the impacts of our own operations, we will increasingly work with others – our business partners, our industry colleagues and other stakeholders – to progress our long term goal of sustainable development. Complete details of this year's accountability performance and the environmental, alcohol, social investment together with other policies that underpin it, are available in the CAR and also on-line at www.sabmiller.com
 

  Corporate Accountability Review
  In terms of the Association of British Insurers' Guidelines for the reporting of social,   environmental and ethical matters, it is recorded here that:

  • The board addresses accounting for these matters by reviewing them and reports thereupon by assigning these issues to CARAC for development and policy recommendation alongside the examination of business and strategic risk through the audit committee's internal control process.
  • SABMiller addresses social, environmental and ethical matters in the training of its directors in terms of impacts of key risks such as reputation, and in the development of CARAC and the CAR. Such training will become more specific in future and is included in director induction.
  • The remuneration committee is aware of emerging views that the effect of social, environmental and ethical performance should be included in the design and implementation of its performance-related remuneration schemes.
  • SABMiller's reports include information about the effect of social, environmental and ethical matters on the company's short and long-term value. SABMiller's Cash Value Added Statement (refer to pages 20 and 21 in the CAR) has found an innovative way to demonstrate in economic terms how shareholders and other stakeholders have benefited from the company's activities.
  • The accompanying CAR describes the company's policies and procedures for managing risks to SABMiller's short and long-term value arising from social, environmental and ethical matters and the extent of its compliance with these.