Ownership and Control

Sanlam was not only the first major financial institution in South Africa to conclude an empowerment transaction in 2004, but in so doing it opened up the company's ownership opportunities to a broad base of new black shareholders who are able to share in the economic success of the company.

In 2004, a broad-based black empowerment consortium, Ubuntu-Botho (UB), bought a 10% shareholding in Sanlam. The Ubuntu-Botho deal brought together various stakeholders that would empower people, organisations and small businesses at even the most rural level, through access to capital, business expertise, and through helping them grow their businesses by making use of a network of cross-selling opportunities.

We are proud to report that in 2007, Sanlam paid out its first dividend, worth R50 million, to over 800 broad-based shareholders and to the Development Trust. The trust is mandated to assist and empower the poorest of the poor through targeted socio-economic initiatives. In this way, people in rural areas will be assisted not only through personal development, but also through the building of schools, clinics and other public amenities. This will be done via a structured rural development programme.

As part of its mandate, UB ensured that its appointed representatives exploited its structure to ensure real transformation. In 2007, the focus was mainly on ensuring integration with Sanlam and UB structures in every province. This objective was met and achieved the following:

• There was an understanding by shareholders about the kind of value being sought by Sanlam; and
• There was strategy co-creation and joint implementation by Sanlam and UB shareholders in every province. This was done in line with expectations from both parties.

Through regular engagement and education, UB shareholders have demonstrated an understanding of the Sanlam business. This engagement has also assisted with identifying extended opportunities in the market for financial solutions.

Since the UB transaction extends its shareholding to micro and small businesses, it gives Sanlam credible access to a significantly expanded base of potential customers. Sanlam's new partners essentially open doors, point out business opportunities and indicate gaps in the market for us to develop suitable new products.

Because we access these new markets via influential black leadership and a broad-based consortium of organisations, including trade unions and community organisations, it favourably impacts on the Group's sustainability and on the share price. This in turn increases the asset value of the shares our UB partners hold.

Because of our very direct contact with new markets, we can further deliver relevant products and services developed on a platform of authentic communications with potential clients at grass-roots level. This helps us along our stated path of becoming a truly client-centric organisation.

• For more information on Ubuntu-Botho, click here.