STELLENBOSCH UNIVERSITY ANNUAL INTEGRATED REPORT 2016 It all starts with connecting to ideas, people and places. The symbols seen in the Annual Integrated Report 2016 are extensively used in Africa and reflect the strong connection that Stellenbosch University has with the continent. Apart from its decorative function, the symbols represent objects encapsulating evocative messages that convey traditional wisdom, aspects of life or the environment. Our institution symbol of knowledge, life-long education and a continued quest for knowledge “He who does not know can know from learning” Governance symbol of unity and human relations Our performance against our strategic priorities symbol of endurance and resourcefulness Report on risk exposure, evaluation and management symbol of guardianship The University acknowledges excellence symbol of excellence, genuineness and authenticity Financial Report symbol of examination and quality control Since embarking on its journey to integrated reporting a few years ago, Stellenbosch University is publishing its second integrated Our journey towards report on 2016. On this journey we realised that a far wider range of interconnected INTEGRATED factors determine the value and future of an organisation than financial REPORTING profitability alone. ome forms of capital (resources) that contribute faculties on their fields of care and supervision. Most of to the value of an organisation are tangible, and these reports however now highlight the value created Stherefore easy to add up or subtract, such as our over the reporting period in line with selected strategic financial capital, but many others are not so easy to account priorities identified in the University’s Intent and Strategy for. In a university environment, our intangibles predominate document for 2013–2018. This focus on value accords with – consider our intellectual expertise (intellectual capital), the principles provided by the International <IR> Framework our talented students and capable staff (human capital), of the International Integrated Reporting Council (IIRC), our supporting environment of natural resources (natural which believes that “communication about value creation capital), our infrastructure (manufactured capital), our should be the next step in the evolution of corporate indispensable partnerships (social and relationship capital), reporting”. and our brand and evolving reputation (intellectual capital). In short, in this report our stakeholders will find These, and more, make up the sum total of assets with information to give them a better understanding of: which we create and sustain value. • the context of the higher education landscape and the Through our integrated reporting, we hope to show University’s outlook; our numerous stakeholders how we try to allocate • our mission, values, stakeholder groups and institutional resources, manage risks and grasp opportunities in the intent and strategy; best possible way. Stellenbosch University – like so many • how we govern the University; other organisations, both corporate and public – is still en route … We plan to improve our understanding of true • our value-creation activities learning and teaching, materiality and true accountability across the board of our research and innovation with social impact in an multiplicity of operations, and we anticipate that integrated international landscape, and their effect on our capitals thinking will eventually become second nature to us, so that as mentioned above (in particular our financial and we may make better decisions and manage efficiently and intellectual capital); sustainably, as befits a knowledge-driven institution such as • our performance measured against our strategic ours. priorities, goals and management indicators (SMIs); • how we take our stakeholders’ needs into consideration; OUR SCOPE AND BOUNDARIES • the challenges and high-order risks faced by our This report is published annually and covers the full institution in the year under review and the actions scope of University operations over the reporting period, undertaken to mitigate their effect on our capacity to 1 January to 31 December 2016. To this we add a few create value; months more – until March 2017 – to enable us to include • the activities of our faculties to realise their strategic goals all our graduation data for the year under review. as set out in the Institutional Plan; and Our report contains financial facts and figures about our • the University’s acknowledgement of excellence by operations over the 2016 financial year, and for the reader’s awarding deserving individuals. convenience our full financial report is still published as part of our integrated report. The University’s financial statements, including the subsidiaries, associate companies APPROVING OUR ANNUAL and trusts, are prepared in accordance with the relevant INTEGRATED REPORT policies of International Financial Reporting Standards (IFRS), and also comply with the Department of Higher The Rector and his Management Team are closely involved Education and Training’s Regulations for Reporting by in the writing and compiling of the annual integrated Public Higher Education Institutions as published in the report. Our Audit and Risk Committee of Council Government Gazette No. 37726 of 9 June 2014. examines the report and, with adjustments, recommends You will also find the customary reports of the Chancellor, the report to be tabled at the University Council meeting Chair of the University Council, Rector and Vice-Chancellor, in May, where the report is considered and finally approved Chief Operating Officer, Vice-Rectors, and Deans of for publication. STELLENBOSCH UNIVERSITY ANNUAL INTEGRATED REPORT 2016 1 These days, university councils and managements find themselves in an unenviable position. External factors along with stakeholder groups’ unrealistic and even contradictory expectations put South African universities under huge financial and operational pressure. Foreword by THE CHANCELLOR Dr Johann Rupert ollowing government’s announcement of no increase are buzzwords in the higher education sector of our in student fees in 2015 – possibly to avert a South time. For universities to be regarded as part of this FAfrican version of the Arab Spring – it came as no league, they require stability, systemic sustainability, an surprise when students again opposed increases in 2016. excellent academic reputation, an impeccable governance This time, the demands went a step further, insisting on free and management structure, and proven research and higher education, and were accompanied by protest action development successes. Such an institution does, however, so as to put pressure on government through universities. make huge demands on financial and intellectual capital. In our society with its vast socioeconomic inequalities, Can South Africa afford 26 such universities? Or, tertiary studies are regarded as a quick fix for poverty considering local realities, should we perhaps reconsider and a guarantee of upward mobility. This perception is the higher education landscape and what it must look like not unique to South Africa. Following World War II, the to meet our very specific needs? In our country, more demand for university admission in Britain increased so than in many others, one would expect empathy with sharply and eventually saw academic admissions criteria frustrations based on historical exclusion from study being introduced. Yet, the elite universities with the best opportunities due to an earlier political regime and, to research reputation and social stature still attracted this day, the constraints of socioeconomic background. the best students, primarily from the aristocracy and Funding higher education and facilitating equitable access the affluent middle class. In the 1970s and 1980s, the to universities, especially for students from working class so-called polytechnics (or technikons) emerged as the families, are vital. training centres for the working class with the main aim Robert Anderson*, an emeritus professor of history at of conferring qualifications instead of producing new Edinburgh University, offers three potential scenarios for knowledge. the “idea of a university which combines teaching and For more than a decade, South African universities have research and develops the general powers of the mind as seen state subsidies dwindle, and have come under well as giving specialized training”. Such a comprehensive increasing pressure to admit even more students, a large offering along with mass university admissions, he says, portion of whom have not been sufficiently prepared would place excessive pressure on resources. for higher education. Protest action and the concomitant An alternative would be to cast all universities into a cost of damaged infrastructure, additional security staff, utilitarian and managerial mould. For a developing economy, lost academic time, legal action and incomplete studies the first option would not be sustainable; from an academic are some of the factors that pose further challenges to perspective, the second is equally unacceptable. His third academic institutions. scenario is a system in which universities have different Globalisation, internationalisation, the knowledge economy, mission statements, with the freedom to interpret “the idea partnerships and collaboration agreements, innovation, of a university” in their own way. as well as information and communications technology Anderson also expresses