Governance and ethics
Our commitment to governance and ethics excellence ensures that good corporate citizenship permeates the business. We understand that the value of our exquisite diamonds is determined by the way we mine; we therefore produce and distribute rough and polished diamonds according to the highest ethical 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 2022 and Our Approach to Climate Change Report 2022 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 is practised throughout the Group. Leading by example, the Board oversees performance and activities such as:
We are committed to adopting and complying with best practice standards such as the Equator Principles, the ICMM’s Global Industry Standard on Tailings Management and other appropriate standards.
Our approach
The Board is ultimately responsible for overseeing the Group’s activities, strategy and financial performance, and efficient use of resources, alongside improving the Company’s HSSE and climate change resilience performance.
Gem Diamonds consistently applies the principles of good governance contained in the 2018 UK Corporate Governance Code and voluntary disclosures in relation 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 2022.
During 2022, we updated our formal governance structures to ensure that climate-related risks and opportunities are identified and elevated to the Board through the appropriate sub-committees. The Group also implemented an Employee Engagement Committee process to ensure that employees’ key concerns are addressed at the highest level.
Our performance
Our context
With business integrity and good corporate citizenship remaining our top priorities, we recognise the value of our stakeholders and endeavour to protect their human rights. This includes preventing forced or child labour, and promoting a culture of nondiscrimination and ethical leadership underpinned by our human capital policies.
Our approach
Gem Diamonds maintains a strong set of ethical principles at the foundation of everything we do. We insist on transparency and have zero tolerance for fraud, theft, modern slavery, child labour, bribery, corruption or any other form of wrongdoing. 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 ensure our compliance with the legislation and regulations of our host countries and voluntary codes for labelling, products and services, as well as our commitment to international best practice. Supply chain control ensures our contractors comply with the same principles. Our strong customer relationships are underpinned by our commitment to transparency and integrity.
We continuously refine our human rights policies and procedures, and provide training in human rights and our Code of Ethics and values as part of the Letšeng induction programme.
Letšeng aligns itself with the principles on security and human rights as included in the ISO 18788:2015 Management system for private security operations, which has been adopted at Letšeng. The entire 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.
Responsible business practices are incorporated into every step of our journey from production to market, and we remain compliant with, and committed to, the Kimberley Process. This preserves our reputation for ethical mining and distribution of diamonds without harming people or the environment.
We build strong relationships with our customers through our commitment to transparency and integrity. In addition, we communicate openly with our customers – when we conclude a diamond tender, a complete list of the winning bids is electronically circulated to all participants in the tender process.
We continue to mature our reporting, and in 2022 we met the obligations of phase 2 of our TCFD framework commitments, publishing our first half-year climate report in addition to our full Our Approach to Climate Change Report.
Our performance
Our 2021 Our Approach to Climate Change report won the Best Climate-Related Reporting (Small Cap) award at the ESG Investing Awards 2022. This is a gratifying recognition of the work and commitment we have invested into understanding the complexity of the climate change threat, and adopting appropriate responses.
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 good governance principles in the business for the benefit of investors, host nations 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 2022, we conducted an external Board effectiveness review. The review confirmed our progress in aligning our structures and in terms of independence and diversity. A number of recommendations were made which were discussed at the March 2023 Board meetings and will be implemented in 2023.
The Board is committed to medium and long-term value creation for stakeholders by ensuring 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 formally four times annually to determine the remuneration of the Chief Executive Officer, the Chief Financial Officer and the senior Executive team. 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, with sustainability-linked KPIs included in Executive Management’s personal performance objectives.
Our performance
Refer to our Annual Report and Accounts 2022 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, conditions and performance expectations are outlined in the Letšeng mining lease, granted by the Government of Lesotho. This lease includes a framework for our partnership with the government, securing our operation’s long-term and sustainable future.
Our approach
We review and, if necessary, amend our governance policy when the UK Corporate Governance Code and other relevant standards change. The internal Corporate Governance Committee drives the adoption and implementation of the changes. We are implementing the recommendations of the TCFD, and our SEMPs’ governing operational activities are aligned with best practice. A robust internal and external audit framework exists to ensure regular compliance checks with the legal requirements and best practice standards the Group has adopted.
We have developed an effective rhythm and cadence to board activities. More time has been made available for board deliberations – an important requisite for adequate analysis and discussion of the important and evolving challenges we face, and the strategic responses proposed by management.
We will 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 for Gem Diamonds.
The Board comprises a good balance of independence, experience, gender and cultural diversity.
Our performance
Refer to the Governance chapter of our Annual Report and Accounts 2022 for more information.
Our context
Our lifelong duty of care requires that the way we do business enhances the mining industry’s reputation. The continued implementation of responsible workplace practices ensures our workforce remains safe and the Group manages operational disruptions. Our multi-layered supply chain supports our production of raw, direct and indirect materials and technical, legal, administrative, engineering and other professional services, including skilled labour. The Group continues its efforts in research and development into innovative ways to improve and optimise our mining and treatment processes.
Our approach
Standards and practices adopted by the Group 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 addition, our whistleblowing policy encourages employees to anonymously report unethical behaviour, which is appropriately addressed. Our whistleblowing line, monitored by an independent audit company, provides a platform for employees and other partners to anonymously report any breaches of law, policy or procedure. Once the notifications are received by the Group Internal Auditor and Chief Financial Officer, they are distributed to the appropriate representatives for investigation.
Gem Diamonds has 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 anonymous whistleblowing reporting platform.
Our operational HSE system is based on the ISO standards of Environmental Management (14001) and Occupational Health and Safety Management (45001). Independent auditors conduct compliance audits on our systems annually. In 2022, we once again received a positive recertification audit.
Our stringent procurement process assesses suppliers in line with best practice, and we continuously work to mature the process as appropriate. Suppliers are assured of equal opportunity to tender, although we actively promote in-country procurement. Formal contracts are concluded with suppliers with clear terms and conditions, including our governance policies, to confirm adherence to those policies and ensure that suppliers adopt our way of doing business.
The way we do business is governed by the following policies that 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 through clauses included in supplier contracts. To this end, Group Internal Audit regularly reviews our anti-bribery and anti-corruption policies and the implementation thereof.
Cybersecurity is a crucial focus area, as our operations rely on secure information technology (IT) systems for efficient and secure financial and operational management to avoid material adverse impacts on the business. We continually upgrade our systems, processes and security firewalls to reduce the risk of sophisticated attacks.
Our IT controls, processes and systems are built according to industry-accepted standards. We have appropriate two-tier back-up procedures with firewalls and other security applications. In addition, we frequently test our back-up restorations and, to the extent necessary, external professional advisers help mitigate evolving risks.
Processes in terms of “Know Your Client” are established across the Group, and senior executives sign-off on risk assessments and appropriate due diligence.
Our performance
Our context
The popularity of lab-grown diamonds is attributed to consumers’ perceptions of conflict diamonds along with their preferences. We protect the premium quality of our brand by embedding the highest corporate governance and ethics standards in our organisation.
Demand for Letšeng’s large, high-value diamonds continues to be strong, and competition from laboratory-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 Gem Diamonds participates in the Gemological Institute of America’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.
All Gem Diamonds customers, who trade with us by invitation only, are screened using anti-money laundering protocols and “Know Your Client” reviews to ensure compliance with regulatory requirements.
The Group is committed to ethical business practices and regards good corporate governance as essential for long-term value creation. Workplace safety is an absolute priority – we constantly improve our safety systems and processes. The Board is committed to environmental sustainability, and Gem Diamonds’ inclusion in the FTSE4Good Index recognises the high standards of our ESG practices.
Our performance
For more information on how we ensure the integrity of our value chain, refer to our Annual Report and Accounts 2022.
