The decision by the board of Absa to remove Sipho Pityana has provoked an enormous amount of controversy and a great deal of debate. Parmi Natesan, CEO of the Institute of Directors in South Africa (IoDSA) says that the public needs to ensure it understands the law relating to the removal of a director, but that it also takes into account the complexities of the decision process the board would have undertaken.
 
“The legality of Mr Pityana’s removal from the Absa board will be decided in reference to the stipulations of the Companies Act, which provides the conditions under which such an action may be taken,” she says.
 
In terms of the Companies Act, there are two ways to remove a director. One is for the shareholders of the company to adopt an ordinary resolution at a shareholders’ meeting. The persons entitled to exercise voting rights in the election of a director would be eligible to vote in this matter.
 
Alternatively, as was the case in this instance, the board can remove a director via a board resolution if a director or shareholder has alleged that the said director has become ineligible or disqualified from sitting on the board; is so incapacitated that he or she cannot perform directorial functions and is unlikely to regain that capacity within a reasonable time; or has neglected or been derelict in performing his or her directorial functions.
 
In both cases, the affected director needs to be given notice of the meeting and the content of the resolution, as well as reasonable opportunity to make a presentation prior to the vote taking place.
 
“We live in the Age of Social Media, and we are often quick to form and then voice strong opinions. In this instance, the Companies Act lays down the framework under which a director may be removed from office; and there is a due process to be followed,” she says. “In addition, even after the decision, the director concerned has the right to apply within 20 business days to a court to review the determination of the board.”
 
We will now wait and see how this further legal process unfolds. This is a highly complex case, with many issues to be taken into consideration. One thing is clear though—boards have to take tough decisions if they believe it is in the best interests of the company, while staying within the lines of the law. Whether this was the case is a matter for the experts to decide, and we should let them do so.
 
ENDS
 
MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@atthatpoint.co.za, www.atthatpoint.co.za
 
For more information on the IoDSA please visit:
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Twitter:  @The_IoDSA
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Johannesburg - A strong unequivocal commitment to fiscal sustainability announced by the Finance Minister in his Medium-Term Budget statement is to be welcomed, but the decisive test is always seeing words put into action and for government not to waver from its stated path.
 
The Institute of Directors South Africa (IoDSA) says boardrooms around the country should welcome Minister Enoch Godongwana’s sentiments on long-term growth, narrowing the budget deficit and stabilising the worrying trend of rising debt.
 
Notes IoDSA, CEO Parmi Natesan, “In order for business to thrive in South Africa and confidence to increase, strong messages like this assist and go a long way to restoring confidence. However, promises without swift action are hollow and we now look forward to seeing how government plans to deal with the debt issue that remains at worryingly elevated levels. We are also buoyed by the Minister’s concerns over unemployment but again we need to see more detail on the solve.”
 
Natesan says a call for faster implementation of structural reforms to unlock greater private sector investment, economic growth and job creation is also a welcome move, particularly when it comes to private sector participation.
 
“Our members tell us their companies are prepared to act and participate more robustly if over-regulation and red tape are reduced which would then create a smoother and more efficient operating environment.”
 
Natesan says a critical aspect of big infrastructure spend is fiscal accountability.
 
“Big capital projects always carry high potential for fraud and malfeasance. Now more than ever we need the right governance protocols in place and then implemented without fear or favour to make sure allocated funding is responsibly managed and accounted for.”
 
ENDS

MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za,  www.atthatpoint.co.za
For more information on the IoDSA please visit:
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Twitter:  @The_IoDSA
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THE upcoming local government elections are unquestionably one of the most important in South Africa’s recent democratic history and the Institute of Directors South Africa (IoDSA) joins a widespread call to urge voters to turn out in their numbers.

The Institute’s CEO Parmi Natesan says, “There is sufficient evidence to suggest that many municipalities in South Africa are either failing or close to a state of complete collapse. Poor service delivery has a direct impact on jobs and sustained growth and its only through the ballot box that people can make their dissatisfaction heard and to effect change where necessary.”  From a governance perspective, the voters are, after all, key stakeholders in these entities and thus need to hold the leadership to account.

According to the office of the Auditor General, less than 40 of the country’s 278 municipalities are said to be on a sound financial footing and should this trendline continue the risk to investment will continue unabated as well as putting increasing strain on the national fiscus as well as South Africa’s sovereign risk.

Fay Mukaddam, a governance specialist with the IoDSA notes, “There is no doubt that the country has reached another growth and development crossroads and failure to get local government moving in the right direction will have negative consequences for years to come.  And it’s at this level where the crisis is most pronounced.  If a municipality is unable to effectively offer the most basic of services, there is an immediate negative sentiment created and this has rapid knock-on effect on the creation of new jobs.”

A case in point says the IoDSA was the recent case of dairy company Clover’s decision to relocate its cheese factory from the town of Lichtenburg in the Ditsobotla Municipality due to poor service delivery for number of years. Over 400 – permanent and temporary - jobs were lost which could have been saved had there been more attention focussed on basic issues like garbage disposal and road maintenance.

The Institute says for business to remain focussed and competitive; it must have a constant symbiotic and trusting relationship with local government and part of the compact is making sure a sustainable operating environment is delivered all year round.

Mukaddam says while the Clover example was a high-profile and well documented issue, there are many other businesses in South Africa that are experiencing similar frustrations and that the November 1 election can be a time for businesses to send a clear and unambiguous message to failing municipalities that they have run out of runway.

The IoDSA says it also acknowledges that poor service delivery and inefficient municipalities cannot be an overnight fix and that current problems are in many cases historical. Part of the dilemma according to the Bureau for Economic Research at Stellenbosch University lies with mangers and staff who often lack technical insight; and in the way that tender specifications are drawn up. An additional problem is that many smaller and poorer municipalities do not have a proper tax base.

Natesan concludes, “We acknowledge these are deep-rooted problems which result daily in poor management of operational budgets; a failure in many cases to spend capital budgets as well as wasteful and irregular expenditure. And while change might occur at the political level, that doesn’t mean that problems like this will disappear immediately. There is also a vital need for functional and effective change at the governance and administrative level but that the November 1 poll is the starting point.”

ENDS

MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za,  www.atthatpoint.co.za
For more information on the IoDSA please visit:
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BODY CALLS FOR PROFESSIONALISATION OF DIRECTORSHIP, IMPROVEMENTS TO NOMINATIONS PROCESS AND MANDATED GOVERNANCE TRAINING FOR NATIONAL LEADERS.
​
The Institute of Directors South Africa (IoDSA) has sent a comprehensive list of recommendations to the Zondo Commission on how to improve directorship in the country.

In a detailed eight-page letter to the Commission CEO Parmi Natesan tells Deputy Chief Justice Raymond Zondo that testimony before him strikingly demonstrated how important a role directors play in creating and maintaining well-governed organisations and how dire the consequences can be if they do not appropriately discharge this critical responsibility.

She says a failure of boards both in the public and the private sector to understand or practice their governance role or fulfil it adequately, lies at the heart of state capture. Natesan is hoping the IoDSA recommendations form part of the final report which was due out in October before a request for a three-month delivery extension.

Natesan tells the Commission there are two key issues preventing effective governance in South Africa.  One is the process for nominating board members is not transparent and is a particular challenge in the public sector but also evident in the private sector. Secondly, she says, many people lack specialised skills and knowledge needed to discharge the duties of a modern-day director.

The IoDSA says the country urgently needs to reverse the current tide of corruption to secure its future and in that respect, leaders need to be accountable for their actions and a means found for removing transgressors from office.
Among the key recommendations made to the Commission is bolstering the current legislative framework which she says is currently fragmented. Part of a new integrated framework would include continuous professional development. She also calls for the enforcement of a statutory body for directors including a license to operate, like most other professions.

The IoDSA is also recommending to the Zondo Commission that it stipulates a consistent and transparent nomination process for directors in which a nominating panel made up of key stakeholders is stipulated. The body is also calling for the establishment of a constitutional means of alternate dispute resolution that would facilitate prompt and effective consequence management for directors who transgress or for those applying lax oversight.

The Institute is also asking the Zondo Commission to recommend uniform governance training for national leaders in both the public and the private sector.

Notes Natesan, “Many members of institutions do not fully understand the nature of governance role they are expected to play. A key issue is the imperative to distinguish between party political and other stakeholder interests and the best interests of the organisation in question. It would be ideal if MP’s state functionaries and office bearers in political parties were also mandated to receive focussed training. Our country’s as well as our corporations’ leaders need to know what is required of them”

Natesan says the recommendations to Justice Zondo are made in a positive and constructive spirit and in the best interests of ridding South Africa of its entrenched culture of malfeasance, given that many citizens have lost faith in societal institutions and are looking to the Commission for recommendations that will indicate how those who abuse their positions are held to account.

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za,  www.atthatpoint.co.za
For more information on the IoDSA please visit:
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Twitter:  @The_IoDSA
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Johannesburg - A new corporate debate over whether COVID-19 vaccinations should be mandatory is one, says the Institute of Directors in South Africa (IoDSA), that boards should consider seriously, but with sensitivity and having taken the necessary legal advice.
 
Already one local healthcare and financial services company has made the decision to enforce vaccinations; and it’s common knowledge many other organisations are grappling with the issue as South Africa encouragingly sees a slowdown of infections due to the pandemic’s third wave, but with warning of a fourth.
 
Says the IoDSA’s CEO Parmi Natesan, “Given the impact of COVID-19, not only on business but also on lives and livelihoods, this has become top-of-mind issue and one that boards have an ethical responsibility to deal with. In doing so they must act in the best interests of the organisation, ensure a safe environment for the organisation’s stakeholders and ensure that the organisation is and is seen to be a responsible corporate citizen.”
 
Natesan says directors should also weigh up the needs and risk assessment of the organisation against the constitutional rights of citizens. She says the mandatory vaccine debate would ideally be the purview of a board’s Social and Ethics Committee.
 
Organisations, Natesan says should also take note of a recent directive from the Labour Department that requires organisations to work towards finding a reasonable and equitable solution that accommodates parties who have valid reasons to not be vaccinated.
 
Notes, Natesan, “Not only in South Africa but around the world this is an emotional and potentially divisive issue. The IoDSA recommends that organisations, if they have not done so already, begin a dialogue with unions and staff-organisations to find common ground.”
 
Natesan says boards should also be aware that a decision – either enforcing or not enforcing a vaccine - could have reputational impact and to that end they should have plans in place to deal with the potential fallout.
 
Internally the IoDSA is strongly encouraging its employees, members and other stakeholders to get vaccinated. She says, “We believe it’s the right thing to do. Business and the economy in South Africa need to do this to move on.”
 
ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@atthatpoint.co.za, www.atthatpoint.co.za
For more information on the IoDSA please visit:
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Twitter:  @The_IoDSA
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LATEST DIRECTOR SENTIMENT SURVEY BY THE INSTIUTE OF DIRECTORS IN SOUTH AFRICA

JOHANNESBURG - COMPANY directors in South Africa feel predominantly negative about economic conditions facing South Africa in coming months and are also increasingly concerned over a shortage of skilled labour as well as sometimes onerous union demands.

 That’s the top line from the 2021 Institute of Directors in South Africa (IoDSA) Sentiment Index – the sixth iteration of the study. The survey seeks to gauge how South African directors view the current operating climate. The survey was conducted earlier this year when South Africa was on a national adjusted Level 3 lockdown due to the rising cases of Covid-19.

 The IoDSA’s Vikeshni Vandayar Executive: Governance and Corporate Services who oversaw the report says while serious macro-economic concerns understandably remain around the boardroom table, there is a welcome upside in that the perception of general business conditions has improved from 2020. She believes this may be because of the positive adaptation to the so called new normal conditions of remote and virtual working.

This year’s survey included key questions around technology and its uptake given the Covid-19-driven move to a virtual workplace. It’s an issue that patently needs more top-level attention with just 46% of respondents believing boards are devoting enough time to discussion around technology and its future role. Only half of those surveyed believed that directors had a high-level understanding of cybersecurity risks.

Vandayar says while directors are learning to live with the flux and mutability caused by the pandemic, most respondents still feel the uncertainty of the South African economy has impacted their business the most. To that end, corruption and inadequate government service delivery remain in the top ranked challenges affecting business. Energy security is not as much of a concern as it was two years ago but still ranks highly along with inadequate government service delivery.

 The IoDSA Director Sentiment Index polls the views of close to 500 directors mostly in an executive capacity. Fifty-nine percent were executive directors and 41% non-executive directors.

In terms of the daily operating business climate, those polled believe that general business sentiment is starting to improve with brighter prospects ahead in the next year. But says Vandayar, the most negative sentiments remain the level of red tape and its impact on business, poor consumer confidence, an over regulated environment, high tax levels and a lack of infrastructure development. She says, “It’s testimony to the resilience, fortitude and application of directors in South Africa that in spite of myriad challenges, many of their businesses remain operational and robust.”

 The Index shows that South African directors feel positive towards current governance conditions in South Africa, but it must be noted that this positive sentiment has been decreasing since the survey started in 2016.  Notes Vandayar, “Directors felt the most positive about boards adequately setting the tone of ethical conduct through their ethical leadership and most negative about the implementation of good corporate governance practices improving in the next 12 months.”

 The top governance challenges are lack of sustainable thinking and a lack of understanding of the overall benefits of good governance.” In terms of the job itself, directors are buoyed that continuous professional development is impacting positively on-board performance but there is concern over the willingness of some directors to take risks that could hinder innovation and growth.  In terms of what motivates a director’s willingness to serve on a board, the top factors are a strong adherence to ethical behaviour independence and maintaining and preserving a company’s reputation.

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za,  www.atthatpoint.co.za
For more information on the IoDSA please visit:
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Twitter:  @The_IoDSA
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Concern over local government’s overall ability to reliably deliver services to citizens has been strengthened by findings in a report by the Ethekwini Municipality, which raises concerns over board member appointment processes, inductions and ongoing training at two of its municipal entities.
 
These findings align to common issues that we have identified over several years of performing board evaluations and governance advisory services in the public sector.
 
The IoDSA has repeatedly spoken out in the media and in commentary to government that directors need specialised training in governance and other directorial skills in order to discharge their duties properly, and that these specialist skills need to be kept up to date via rigorous continuous professional development.
 
“Municipal entities in general are at the coalface of service delivery and, at the end of the day, if any entity is not delivering on its mandate, its board needs to be held accountable and face the consequences,” says Natesan.
 
The IoDSA currently trains more than 6 000 directors and prospective directors annually, and has introduced two professional designations—Chartered Director (SA) and Certified Director (SA). These designations provide a credible framework that enables directors to acquire the necessary skills through training, prove them through certification, and then maintain them through continuous professional development.
 
“The question of specialist skills also speaks to the whole nomination process, which we have found to be a challenge, particularly in the public sector. Too often, appointments are made on political or other inappropriate grounds, thus effectively setting the organisation up for failure,” Ms Natesan says.
 
She argues that board nominations need to be the result of a formal and robust process conducted by an independent and qualified nominations committee that undertakes the necessary due diligence on each candidate.
 
“It’s vital that only individuals who have the knowledge, skills and experience that the organisation requires are put forward. In addition, candidates should also enough time to discharge their board commitments, and lack of conflicts of interest,” she says.
 
NOTE TO EDITOR
This media release replaces one issued on 29 June 2021 entitled uShaka Marine World crisis makes the case for the professionalisation of directorship in local government,  which was based on a published news article.
The IoDSA has since received the Ethekwini Municipality Audit Committee report and has revised the media release.
The original media release was not intended as findings or judgments by the IoDSA on uShaka Marine World, as may have been perceived. The comments were intended to be informative and general in nature, based on best practice in governance as informed by years of conducting board evaluations and governance advisory projects.
 
ENDS
 
MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za,  www.atthatpoint.co.za
For more information on the IoDSA please visit:
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Twitter:  @The_IoDSA
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The massive fire at the warehouse of chemicals company UPL in Durban has created an environmental disaster whose scale is still not clear, and has put the company into the headlines for all the wrong reasons. While the facts are not yet confirmed, it’s clear that the incident holds many lessons for directors and regulators across all industry sectors, says Advocate Fay Mukaddam, Chartered Director and Technical Advisor at the Institute of Directors in South Africa (IoDSA).

“When something on this scale happens, those who are accountable need to take a hard look at what went wrong. Perhaps even more important, though, corporate and government leaders everywhere need to tease out what the lessons are, and have the humility to see what they can learn,” she says. “Directors, in particular, bear the ultimate accountability for anything that happens to their organisation, and so should be looking at this disaster very carefully. There are key lessons we should all take to heart.”

Some of these lessons include:

What does leadership actually entail? Organisations need to understand the impact they have, or could have, on the economy and society, and thus what being an ethical and effective corporate citizen means. In this instance, it seems clear that there simply wasn’t a deep enough examination of the stakeholder universe, and what that meant for its business strategy.

At a broader level, both directors and regulators need to consider what leadership means in the context of being a good corporate citizen—King IV pairs ethics and effectiveness when defining leadership, which should be informed by integrity, competence, responsibility, accountability, fairness and transparency (iCRAFT).

Does the board and executive team understand the reputational issues? A company’s reputation can be destroyed in an instant, not so much by a catastrophe but by how the company responds to it—with considerable impact on its bottom line. “The temptation to take a short-term view and play one’s cards too close to one’s chest will have long-term consequences,” she says. “To drive sustainability, directors must move from a short-term to a long-term value creation view.”

A related issue here is that of crisis communications. How well a company survives a disaster is intimately connected to how well it communicates as events unfold. It seems clear that neither UPL nor the regulator or other parties concerned had an effective crisis communication strategy, leaving an exceptionally broad body of stakeholders largely in the dark about something that could have severe health and environmental ramifications.

Is your risk management up to scratch? For UPL’s directors, a big question has to be whether this risk was foreseeable. One might perhaps argue that social unrest on such a scale was unforeseeable, but even that is highly debatable given the facts of South African life. But there’s no doubt that a catastrophic event (no matter its nature) should have been foreseen, and contingency plans put in place. All directors should be subjecting their risk strategies to minute scrutiny. Do you have mitigation strategies in place should the unthinkable happen?

“As I’ve said, the facts are still being investigated, but two aspects of what has occurred are hugely disappointing from a board leadership perspective,” says Advocate Mukaddam. “One is the retreat into a laager, with both company and regulator clearly reluctant to give out any information lest, it seems, they admit liability. One gets the impression that lawyers and insurers are leading the conversation whereas the best interests of those affected should be at the forefront. A constructive and stakeholder inclusive approach that brought together all role-players to fast-track ways to fix the problem would have been infinitely preferable—and would have paid off in the long term.

“In a situation like this, we all want individuals to step forward and take responsibility for putting things right, not to resort to the smokescreen of legalese.”

The firefighters were casualties of this legalistic approach as they appear to have not been given information about the nature of the chemicals in store, with potentially grave consequences for their own health and safety. This information would have also ensured that the way they fought the fire could have been adjusted to reduce the risk of widespread contamination. The broader public also was deprived of potentially important information about the health risks it faced as the fire blazed and the contamination spread.

“Directors and regulators alike need to be looking at the UPL disaster to see what they can learn, and at a minimum, I would hope that they are stress-testing their own contingency plans.”

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@atthatpoint.co.za, www.atthatpoint.co.za
For more information on the IoDSA please visit:
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Twitter:  @The_IoDSA
LinkedIn:  Institute of Directors in Southern Africa Company Page  

Business Day reports that government is planning to intensify the vetting of non-executive directors and other employees at SOEs to improve the quality of appointments.[1] These moves are long overdue and should be welcomed—but with caution, says Parmi Natesan, CEO of the Institute of Directors in South Africa (IoDSA).

“For many years, the IoDSA has been calling for reform in how board appointments are made in order to put SOEs back on track,” she says. “So much so that we provided input to the Department of Public Services and Administration many years back on a guide to the appointment of SOE directors, but we are not aware of it ever being approved or applied.[2] The brutal truth is that implementing good governance best practice will require the state to make some hard choices, and we have yet to see whether there is genuine political will to drive through the necessary changes.”

One of the elements highlighted in the news report is better vetting via stringent background checks before appointments. However, it must be recognised that this vetting process must be extremely detailed and goes beyond merely performing the standard identification, qualification and criminal checks, but should extend to investigating candidates’ knowledge, skills and experience, as well as other necessary personal characteristics.
​
The article also indicates that there are no uniform criteria for the recruitment of board members, which is a concern. Directors have a very specific governance role, and need specific skills to discharge it. While there are no legally mandated, uniform criteria for board members, the IoDSA has developed a robust director competency framework that covers the skills that every director needs in order to be able to serve effectively.

“The King Reports make it very clear that directors have a critical role to play, and they need the right skills to do so. Given the importance of the role, and the substantial personal risk that board members carry, the IoDSA believes it’s necessary to professionalise directorship. We have developed two director designations that are approved by the South African Qualifications Authority that will allow directors to gain the right skills and then maintain them via continuous professional development obligations,” she explains.

“Becoming a Chartered or Certified Director (SA) not only means you demonstrably acquire an objectively designed skillset contained in the Director Competency Framework, you also become subject to a professional code of conduct, under which you can be disciplined.” This should be taken into account when appointments are made.

Another key challenge for the public sector has been a lack of role clarity, again something that the IoDSA has frequently highlighted, most notably in its 2019 paper “Challenges facing public sector boards”. The challenge has always been that SOE founding legislation frequently gives the state, as sole shareholder, the power to appoint both directors and senior executives. By contrast, governance best practice reserves the right of appointing these senior positions to the board. This is logical because it is the board, not the shareholder, which is accountable for the organisation’s performance.
​
“To implement good governance and improve organisational performance, the state will have to recognise that its criteria for appointing senior roles can no longer be subject to political considerations, and should focus on what the organisation actually requires to fulfil its mandate. The shareholder would be well advised to consult the board throughout the process, and make it clear that appointees answer to the board and have a primary duty to the organisation, not the politicians who appointed them,” Ms Natesan concludes. “Good governance can help save our SOEs to everybody’s great benefit, but it remains to be seen if Government has the appetite for real reform.”

[1] Thando Maeko, “Public enterprises aims at strict vetting of SOE appointments”, Business Day (18 August 2021), available at https://www.businesslive.co.za/bd/national/2021-08-18-public-enterprises-aims-at-strict-vetting-of-soe-appointments/.
[2] IODSA HAILS GOVERNMENT PLAN TO IMPROVE BOARD APPOINTMENTS ON STATE-OWNED ENTITIES
https://www.iodsa.co.za/news/355434/IoDSA-hails-Government-plan-to-improve-board-appointments-on-state-owned-entities.htm

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@atthatpoint.co.za, www.atthatpoint.co.za
For more information on the IoDSA please visit:
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Twitter:  @The_IoDSA
LinkedIn:  Institute of Directors in Southern Africa Company Page  

According to a report in Business Day,[1] President Ramaphosa ended his recent testimony to the Zondo Commission with a defence of the government’s transformation policy, and urged Deputy Chief Justice Zondo not to order that the ANC’s deployment committee be scrapped. Dr Simo Lushaba, a governance specialist who facilitates Director Development Programs at the Institute of Directors in South Africa (IoDSA), says that President Ramaphosa’s plea indicates that government has no intention of doing away with this practice and, even more concerning, has not yet recognised the effect it has had on the state of governance in the country and on service delivery.

“Cadre deployment is essentially a form of political nepotism, and is as destructive,” he says. “Cadre deployment by a shadowy ANC committee—remember we only know that it exists and that the sitting deputy president sits on it—has had a calamitous impact on how our state entities perform and thus on service delivery. People tend to focus on the particular instance of cadre deployment, but the real impact is on the public service as a whole.”

For example, he continues, cadre deployment does not only put people in unearned positions of leadership, it shows that the highest positions are available only to cadres. Professionals in the public service are demotivated, and few will apply to join an organisation in which the criteria for promotion are shrouded in secrecy.

The fundamental unfairness of the system is evident in the fact that even cadres themselves are disadvantaged. Genuine cadres of the party have no way of knowing whether they are on “the list” of possible appointees because it is not published even within ANC circles.

The sidelining of professionals, state capture and corruption are ultimately the poisoned fruits of this opaque, secretive system operating outside governance best practice.

“We are asked to believe that for many years this powerful secret committee kept no minutes, when even the humblest stokvel does that,” he says. “The intention is clearly to keep everything shrouded in secrecy and, above all, to avoid scrutiny. And without transparency and scrutiny, there will be no accountability.”

Dr Lushaba says that South Africans should insist that leaders and prospective leaders of state entities be prepared to accept a transparent nomination process that is independent and audited.

Nonetheless, the ANC—and any other organisation—retains the right to nominate an individual whom it believes would be the best candidate for a leadership position, but it should not be allowed to impose its will on the process. In his view, the problem is not the cadres themselves per se, but rather the broken system. The key point is that the appointment should be the best interests of the entity concerned, and the board should have the final voice in that decision. Good governance demands a segregation of duties and roles with good reason—one party cannot both be the nominator and the decision-maker. If this segregation is not maintained, as we see all around us, the outcome is disastrous.

“We cannot convince any entities, public or private, to appoint leaders based on their competence and merit, while still driving transformation, if the head of state and his ruling party cling so tightly to their brand of political nepotism—even after so much has gone wrong,” Dr Lushaba concludes. “Ethical leadership requires that leaders can only expect the same standards of conduct from others that they hold themselves to.”

[1] Harja Omerjee, “Ramaphosa defends ANC’s cadre deployment policy”, Business Day (12 August 2021), available at https://www.businesslive.co.za/bd/national/2021-08-12-ramaphosa-defends-ancs-cadre-deployment-policy/. 

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@atthatpoint.co.za, www.atthatpoint.co.za
For more information on the IoDSA please visit:
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Twitter:  @The_IoDSA
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