Barnstone helps Implats BEE Trust pass share-vesting milestone

The Morokotso Trust was founded in 2006 to administer and manage Impala Platinum’s employee share-ownership programme for some 26 000 of its permanent workforce.

July 12, 2012

The Morokotso Trust was founded in 2006 to administer and manage Impala Platinum’s employee share-ownership programme for some 26 000 of its permanent workforce.  Approximately a year ago, five years since its inception, the Morokotso Trust celebrated a very important milestone, namely its first share vesting to participating Employees. Barnstone Corporate Services, a professional services firm providing on Strategy and Programme Management support and advisory services to Executive Management teams, delivered various programme implementation initiatives which played a crucial role in the success of this first vesting point of the Trust.

The five-year vesting milestone was particularly important because it required the Trust’s multiple beneficiaries to make an important personal decision regarding their shares in Impala Platinum. When the Trust was founded, shares in Impala were sold to the Trust for the benefit of the multiple beneficiaries employed at Impala Platinum. The basic principle underpinning this transaction was that the growth in share value would yield a financial benefit to the Trust’s beneficiaries. Five years after the Trust’s establishment, each employee beneficiary received the option to sell part of his/her shares at a volume average weighted share price, or for the trust to retain the shares for another 5 years in the hope of further growth in value.

For the trustees of the Morokotso Trust it was, and continues to be, vital that all the beneficiaries are informed and have adequate understanding of the key issues surrounding the Trust; particularly around this vesting decision. Each beneficiary needs to be empowered to make an informed choice and be sure that his/her choice is recorded and acted against in accordance with the Trust deed.

Karen Otto, a trustee of the Morokotso Trust and Senior Group Rewards Manager at Impala Platinum, shared the following insights about the first vesting event: “We faced the challenge of communicating a fairly complex concept to 26 000 beneficiaries within a fairly compressed time frame. You also have to remember that as miners the beneficiaries worked shifts across a number of shafts in Rustenberg, plus at our refinery and the operations in Lydenburg. We needed Barnstone’s experience in programme management to design the whole process and keep it on track.”

Through the vesting process, the Barnstone team worked closely with Implats Management, both at Head Office and at multiple mining sites, as well as with Union representatives to determine when and how to engage with beneficiaries. This also involved creating and coordinating a schedule for on-site engagements which was aligned with production and shift schedules. The Barnstone team responsible for delivering these on-site engagements with beneficiaries included a group of trained facilitators, fluent in the relevant local vernaculars and with the necessary skills to communicate the key concepts and to encourage discussion about the vesting process itself. This team was also responsible for the heavy administrative and document management requirements involved in capturing the decisions of each beneficiary.

Some key lessons learnt included the need for close collaboration with Union representatives, particularly at the start of the process. According to Werner Botha who led the logistics and programme planning: “It was vital to indentify all the relevant stakeholders in the vesting process and, through extensive communications, to avoid a sense that any of them were being neglected. Another key success factor was selecting and training the right type of person to conduct the facilitated engagements. Facilitators needed to be people who not only could speak the right language but could also deal with pressure in sometimes hostile audiences.”

With Barnstone’s help, the Morokotso Trust conducted face-to-face consultations with approximately 26 000 of its beneficiaries and successfully recorded the decisions of each. This process was completed in less than three months.

“It was vital that our beneficiaries understood the choice they would have to make as there were real financial consequences for them,” says Karen Otto. “Barnstone played a big role in helping us to complete the process successfully.”