Nicole Solomon: AECI’s embedded CSI specialist who finds a home for R35m a year

LONDON — Founded in 1924 to supply explosives to an emerging South African mining industry, AECI has evolved into a major chemicals group generating annual sales of almost R20bn a year. It is also a business with a well developed social conscious, investing a hefty R35m a year in corporate social responsibility, and having an education and development trust which owns 3.5% of the group’s issued shares. In this uplifting discussion, the group’s CSI chief Nicole Solomon shares some of the AECI story – and explains why she is taking her top team to the 2018 CEO SleepOutâ„¢at Liliesleaf. – Alec Hogg

In this latest update of the CEO SleepOut™ we talk with Nicole Solomon, she’s with AECI, which is a magnificent company in many-many respects. It’s been going for nearly 100 years, and this is a business that has really taken its social responsibility very seriously. We’ll get into that in a little more detail as we get into this interview but let’s just start off, I suppose, with the basics and Nicole, what is your connection with the CEO SleepOut™?

Well, Alec, I’m the group CSI specialist at AECI. As you rightfully said, we take social responsibility very seriously and it’s our second year doing this. Our executive team did it last year and we’ve now taken it a level down and challenged our CSI Committee of which I form part of, and that’s why we decided to participate in this year’s challenge.

So, did you go last year with the rest of your colleagues or is this also a first year for you, and I ask that because I’m trying to get tips on how to manage the cold?

This is a first for me. I’ve been speaking to my colleagues and it will be the first for the group that will be going this year. We’re quite excited but also, very much nervous about anticipating the cold and how better to prepare ourselves for this. It’s exciting but also a challenging experience.

Who are you taking with you Nicole?

Nicole Solomon

I’ve got four colleagues coming along. There’s Ceswane, John McCarthy, and Sifisile. One of our colleagues is still pending to indicate their availability. But they all form part of our CSI Committee and they represent different businesses in our group. So, AECI has a Group company with 17 operating companies under it in strategic pillars and each will be coming from different businesses.

Now, your own background, I was looking on LinkedIn, I suppose nobody is private anymore, easy to research before you have this kind of conversation. You did a B comm Free State University and then a M comm at North-West University. But the topic of your masters is fascinating, Caused Related Marketing in SA, caused meaning presumably, for good causes. Tell us more.

I became very curious about how corporate social responsibility could add value to the brand of the organisation and at that point I wasn’t particularly focussed on sponsorship because that is the role of sponsorship and branding to position your brand. But how a cause – caused related marketing – which is very prominent and popular in the US. How the caused related marketing can uplift the organisation, the brand, and the employees of the brand, and enhance the value. Whether it be the goodwill of the brand or that of the actual engagement of its employees because research has proven that when a corporate has a large and a big, bold social responsibility stance – it has a direct influence, in terms of the value of employee engagement.

It was very interesting to notice the research that’s been done on exactly that point, on the performance of the shares as well. As well as the profitability of companies who do take this seriously. Now, I know AECI, and we’re going to get into a little bit of that later, but you’re in the FTSE4Good Index, which is a reflection of quite a lot of categories that you have to work on to make sure that you are acceptable to investors who want to go into good companies like that. When you engage with your colleagues or with your executive team there do they bounce off suggestions from you before, perhaps doing acquisitions or making some big decisions?

Not necessarily. We have a key team in the merger and acquisitions team, and they draw on various expertise, in terms of those due diligences and how we go about doing it. So, no, I’m not very involved in that. But where I do play a role is when the actual acquisition is made and we do align those businesses and integrate them into the group. I then play a role in terms of aligning the socioeconomic development programs. So, our two latest acquisitions are two exciting projects that I’m working on, in terms of bringing them onboard. Also, getting to learn about those businesses because they’re also different.

I see there was a R2bn acquisition that you guys have just made so it’s going to keep you pretty busy.

Definitely.

Looking through your annual report you now invest 1% of net profit into community development, and that’s nearly R10m a year, if my calculations are right.

Well, Alec, we try and do more than that so, we’ve got our 1% net profit after tax. But as you can imagine, it’s just not enough. Our group operates across SA and we’ve actually got two community trusts in addition to our 1% net profit, our CSI Fund that we invest. We’ve got a Community Trust, which is a 3.5% shareholder of AECI. Then we’ve inherited the Tiso AEL Development Trust, which has a small shareholding also in AECI. Those two trusts have been primarily established for community development so, they are shareholders. They are independent legal entities but are primarily aimed at development transformation and community development. So, we do over and above our normal required legal compliance, if you like. Both of those Community Development Trusts are dividend driven entities and as and how the company performs, dividends are declared. We then distribute it directly to the community in the various focus areas of those respected Trusts.

For you, in your day-to-day job, what gets you up in the morning? What drove you or pulled you into doing this kind of work?

Alec, I started out very passionate about the marketing industry and was fortunate to start my career in that and it was, for a large part, in the branding and sponsorship role. I then just couldn’t stop thinking and fell in love with corporate social investment, and the opportunities around it. Over the years, in fact, one of my dreams is to finally do a PhD in this. I’ve seen the evolution of corporate social investment in SA, or socioeconomic development. Not only has it become a legal compliance, in terms of the BBB codes but it’ become business as usual. If you look a few years ago, some of these divisions used to be very, sort of a grudge department and something that wasn’t even part of the business structure and it’s become a structured balance sheet item, if you like. Us, doing business in so many multi-sectoral portfolios, like the mining sector, the agriculture sector, see the pressures around those communities every day. Also, the different charters, the sector charters and how our customers and our suppliers are under pressure to perform socially. So, the fact that we do this as a moral obligation is to our advantage because when we do business with those various customers it’s almost easy because we speak the same language and we have the same values in terms of giving back to the community, and to your question, Alec, what gets me up. Just the pure joy of having to make a difference each day gets me up and I sleep very well at night.

And that’s where I was going – you must see quite a few bright eyes, you must see quite a few people whose lives have changed as a result of the efforts of the organisation you work for?

Correct. Not only do I see a lot of change and good. But I also see that there is just so much more to do, and that gets me up as well. In terms of how can we create more opportunities for people? How can we advance them more? How can we enable people more? I think each and every person, as an individual, and as a collective, as a corporate has a responsibility to give back and giving can take many shapes and forms. But yes, that’s definitely what drives me and gets me to sleep well at night.

Nicole, this is the 2018 Nelson Mandela CEO SleepOut™ so, it’s a very special one, being held at Liliesleaf on the 55th anniversary of the raid, which netted six Rivonia trialists. It is a week before Nelson Mandela’s 100th birthday, were he alive. What does all of that mean to you?

Alec, we were very fortunate to have a leader such as Nelson Mandela, as a country. Despite the fact that he’s away, I think he’s left us a tremendous legacy. For me, personally, is to celebrate that, to honour that, and to learn more about what I can do in my role as leader, and influence change. But also, as a corporate to participate as a country. As a business operating in this country that has made such great leaps and bounds in terms of change. But how do we pass the baton on and continue that wonderful legacy that he’s lived? We celebrate Nelson Mandela Day every year, as a corporate, and we make sure our employees get involved and understand their role, in terms of giving back. But also, we’re excited as a CSI Committee to participate in this because it is actually celebrating the very leader that has influenced the transformation and change of this country.

That was Nicole Solomon, she’s with AECI, and last year the company spent R35m on various community projects, an extraordinary amount of money. They’re committed to doing 1% of their net profit. That would come out to about R10m, but in fact, spent 3.5 times that. She’s going to be at the Nelson Mandela 2018 CEO SleepOut™, with her CSI team. I look forward to seeing her then. Until the next time, cheerio.

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