Governance and ethics
We understand that the value of our exquisite diamonds is largely determined by the way we operate. Therefore, we produce and distribute rough and polished diamonds in accordance with our commitment to the highest ethical, governance and legal standards.
Related sustainability principles
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Optimising socio-economic benefit
Prioritising environmental protection
Related UN SDGs
The following UN SDGs relate to our governance and ethics pillar:
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Refer to our Annual Report and Accounts 2023 for more information on our approach to integrating these UN SDGs into our business operations.
Snapshot of our performance
Our goals
Our future
Our context
The Board ensures that good governance and ethical conduct are practised throughout the Group. Leading by example, the Board oversees our performance and activities related to, among others:
We are committed to complying with the Equator Principles, the ICMM’s GISTM and other appropriate best practice standards.
The Board adopted the TCFD framework in June 2021, and we published our decarbonisation strategy and target in March 2023.
Our approach
The Board is ultimately responsible for overseeing the Group’s activities, strategy, financial performance and efficient use of resources. In addition, the Board supervises improvements to the Group’s sustainability and performance relating to decarbonisation and climate-change resilience. Progress against our decarbonisation target and associated energy reduction and other decarbonisation activities are monitored on a regular basis.
Gem Diamonds consistently applies the principles of good governance contained in the 2018 UK Corporate Governance Code and voluntary disclosures relating to the Miscellaneous Reporting Regulation.
Further information on our compliance with the Code’s provisions is available in the compliance statement included in our Annual Report and Accounts 2023.
Our performance
Our context
Business integrity and good corporate citizenship remains a top priority. We recognise the needs of our stakeholders and endeavour to operate in a manner that protects their human rights, by preventing forced or child labour and promoting a culture of non-discrimination and ethical leadership underpinned by our human capital policies.
Our approach
We maintain a strong set of ethical principles that form the foundation of everything we do. We insist on transparency and have zero tolerance for fraud, theft, modern slavery, child labour, bribery and corruption or any other form of wrongdoing.
We continually refine our human rights policies and procedures; our employee induction programme provides training in human rights and our Code of Ethics and values. To support our ethical principles, we maintain a rigorous system of internal controls, a comprehensive internal training process and a stringent governance framework.
Our sustainable development framework and Code of Ethics assure our compliance with the legislation and regulations of our host countries and our commitment to international best practice. Supply chain control ensures our contractors comply with the same principles. Our strong customer relationships are underpinned by open communication and by our commitment to transparency and integrity.
Letšeng is aligned with the principles on security and human rights as per the ISO 18788:2015 Management System for private security operations. While not certified against this standard, our Letšeng security department has received training on human rights and voluntary principles as outlined in ISO 18788.
Our human capital policies provide for the fair treatment of employees through negotiated remuneration, non-discrimination, and strict health and safety practices.
We incorporate responsible business practices into every step of our journey, from production to market. We remain compliant with, and committed to, the Kimberley Process which preserves our reputation as an ethical diamond miner and distributor.
We continue to mature our reporting standards and objectives. We have implemented, as appropriate, the Global Reporting Initiative (GRI) G4.1 sustainability reporting standard on organisation-wide sustainable development, based on which our subsidiaries submit comprehensive monthly sustainability reports through an online sustainability reporting platform.
Our performance
Our context
The Board reports to stakeholders on the Group’s financial, social, environmental, governance, and health and safety performance, while promoting an ethical culture and embedding principles of good governance across the business for the benefit of investors, host nations, employees and PACs.
Our approach
The Board conducts a formal and rigorous annual evaluation of its own performance, and that of its Committees and Directors, so that no individual or group dominates decision making.
In Q4 2023, we conducted an internal Board evaluation which was done by questionnaire completed by each of the Directors.
The findings were consolidated into a report which, along with recommendations, was circulated to all Directors and discussed at the November Board meeting. The overall findings from the evaluation were positive, with a number of recommendations made to consider optimisation of the current operations, expansion and/or growth opportunities, implementing an individual performance feedback mechanism between the Chairperson and other members of the Board and Board visibility to shareholders and other stakeholders.
In 2024, the Board and Committees will implement the recommendations from the evaluation and monitor its progress against these over the following months.
The recommendations of the 2022 external Board effectiveness review that was conducted by Ceradas, were implemented during the year.
The Board is committed to medium and long-term value creation for stakeholders by ensuring the efficient use of Group resources in 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, comprising two independent non-Executive Directors and a Chairperson, meets quarterly to reflect on and determine the remuneration of the Chief Executive Officer, the Chief Financial Officer and the Chief Operations Officer. Executive and senior management and external advisers may be invited to attend these meetings as deemed appropriate. The Remuneration Committee determines the terms and conditions of performance-related remuneration, and sustainability-linked key performance indicators are included in Executive Management’s personal performance objectives.
Our performance
Refer to our Annual Report and Accounts 2023 for more information.
Our context
We keep abreast of legal, regulatory and governance requirements and industry best practice to embed sound corporate governance principles in our business, creating sustainable value for our stakeholders. Our SEIAs are aligned with the IFC Performance Standards on Environmental and Social Sustainability, the Equator Principles and the FPIC guidelines.
Our host country’s legal and regulatory terms and conditions are outlined in the Letšeng mining lease, granted by the Government of the Kingdom of Lesotho, which embraces the framework for our partnership with the government.
Our approach
We review and, if necessary, amend our governance policies when the UK Corporate Governance Code and other relevant standards change. The internal Corporate Governance Committee drives the adoption and implementation of any changes. We established a robust internal and external audit framework to ensure regular compliance checks with legal requirements and the best practice standards the Group has adopted.
In 2023, we successfully completed the implementation of the TCFD recommendations. We also finalised a new social and environmental management plan (SEMP) for Letšeng, which was approved by the Government of Lesotho. The governance of our SEMPs operational activities remain aligned with best practice. In addition, the Sustainability Committee’s Terms of Reference was updated with approved minor changes – see the updated version on our website at www.gemdiamonds.com.
We continue to maintain an effective rhythm and cadence to Board activities. The Board is given adequate time for deliberations and effective analysis and discussion of challenges and strategic responses proposed by management.
We continue to examine how best the Board can work constructively with management, and ultimately with government, employees and communities, on the strategic pathways that exist for Letšeng, and more broadly, Gem Diamonds.
The Board is composed of a good balance of independence, experience, gender and cultural diversity.
Our performance
Refer to the Governance section of our Annual Report and Accounts 2023 for more information.
Our context
Our lifelong duty of care drives us to do business in a manner that enhances the mining industry’s reputation. The continued implementation of responsible workplace practices ensures our workforce remains safe and that operational disruptions are minimised. Our multi-layered supply chain supports production of raw, direct and indirect materials and includes technical, legal, administrative, engineering and other professional services. We continue research into and development of innovative ways to improve and optimise our mining and treatment processes.
Our approach
The standards and practices we have adopted and implemented ensure that our processes, and those of our suppliers, align with our Code of Ethics and reputation. Our governance processes proactively identify and mitigate risk in this regard.
Our whistleblowing policy encourages employees to anonymously report unethical behaviour, which is then appropriately addressed. Our whistleblowing line, monitored by an independent audit company, provides a platform for employees and other stakeholders to anonymously report unethical behaviour and any breaches of law, policy or procedure. Once notifications are received by the Group Internal Auditor and Chief Financial Officer, they are distributed to appropriate management representatives for investigation. We have zero tolerance for retaliation against anyone who, in good faith, raises concerns regarding unethical behaviour in the workplace. To date, we have not received any complaints or reports of modern slavery, human trafficking or child labour, either directly to the Board or senior management or through our whistleblowing platform.
In 2023, we reviewed and approved several Group sustainability-related policies. These and other policies are publicly available on our website at https://www.gemdiamonds.com/sustainability.php and are widely distributed to employees. Ensuring our employees are familiar with these policies is important to drive a culture of engagement around health, safety, environmental and climate matters. Our operational HSE system is based on the ISO standards of Environmental Management (14001) and Occupational Health and Safety Management (45001). We implemented an annual internal and external Sustainability audit programme to drive continuous improvement, whereby operating mines are audited by an independent third-party auditor to retain ISO 45001 and 14001 certifications. Both these certifications were retained for the 5th consecutive year at Letšeng following an external audit undertaken in July 2023.
Our stringent procurement process assesses suppliers in line with best practice, and we continuously work to mature the process. Suppliers are assured of equal opportunity to tender, although we actively promote in-country procurement. Formal contracts with clear terms and conditions, including our governance policies, are concluded with suppliers to confirm adherence to our Code of Conduct and policies and ensure that suppliers adopt our way of doing business.
The following policies govern our procurement process:
We do not tolerate bribery and corruption and are compliant with and supportive of the UK’s Bribery Act. We demand the same from our suppliers solidified through clauses included in their contracts. To this end, Group Internal Audit regularly reviews our anti-bribery and anti-corruption policies and their implementation.
Processes in terms of “Know Your Client” and anti-money laundering legislation are established across the Group, and senior executives sign off on risk assessments following appropriate due diligence.
Cybersecurity
Cybersecurity remains a critical focus area. Our operations rely on secure information technology (IT) systems for efficient and secure financial and operational management. Our IT controls, processes and systems are built according to industry-accepted standards with appropriate two-tier back-up procedures, and we frequently test our back-up restorations. We continually upgrade our systems, processes and security firewalls to reduce the risk of sophisticated attacks, and when necessary, we engage external professional advisers to help mitigate evolving risks.
Our performance
Our context
We protect the premium quality of our brand by embedding the highest corporate governance, ethics and standards across our organisation. Demand for Letšeng’s large, high-value diamonds remains strong, and competition from lab-grown diamonds has yet to be seen at this end of the premium market.
Our approach
We vehemently oppose the global trade in conflict diamonds and its impact on political stability, human rights and the legitimate global diamond trade. Our diamond exports comply with the Kimberley Process, and we participate in the Gemological Institute of America’s (GIA’s) Diamond Origin programme, providing consumers with information about the country of origin of their diamonds, and the positive impact the mine and broader diamond industry have on the communities and countries in which they operate.
The GIA laboratory in Antwerp, where we sent most of our larger diamonds for physical verification of origin, closed down in mid-2022. We are implementing a blockchain-based system that will allow us to verify and track data associated with individual diamonds. We still perform physical verification of origin at client request.
All Gem Diamonds customers trade with us by invitation only and are screened using anti-money laundering protocols and “Know-Your-Client” reviews to ensure compliance with regulatory requirements.
We are committed to ethical business practices and regard good corporate governance as essential for long-term value creation. Workplace safety is an absolute priority and we continually improve our safety systems and processes. The Board is also committed to environmental sustainability, and the Group’s inclusion in the FTSE4Good Index recognises the high standards of our ESG practices.
Our performance
