As a first step to restore confidence in the governance structures at the national broadcaster, the Parliamentary Portfolio Committee on Communications should follow best practice as regards to the due diligence process on director appointments. Acting with a high standard of care will ensure that fit and proper persons are appointed to oversee and direct the entity and avoid the kind of embarrassment caused by news of faked qualifications and other performance furores.
“On the face of it, the recent decision to re-advertise the board posts should be applauded because it shows an awareness of how important it is to appoint competent board members who can make a real contribution to the collective knowledge, skill, experience and diversity of the current board,” says Parmi Natesan, Executive: Centre for Corporate Governance at the Institute of Directors in Southern Africa (IoDSA).
The IoDSA’s comments follow on from recent press reports that the Portfolio Committee on Communications will be re-advertising the positions of three members of the SABC board, including the Chair. The Committee had previously said that it was dissatisfied with the quality of the applications it had received for the three posts. “Board composition has such a significant impact on board and ultimately company performance that it’s worth taking the time to get it right,” adds Natesan.
Natesan adds that the IoDSA’s Director Competency Framework could also be used as a basis to help assess the candidates’ competency to serve. In addition, the IoDSA launched a professional designation for directors—the Chartered Director or CD(SA)—last year, in order to help individuals ensure they had the necessary skills for a board appointment, and to help selection committees identify the most competent candidates. While there are relatively few CD(SA)s at present, government should encourage present and future public sector board members to embark on accreditation. On a positive note, two large parastatals already have a CD(SA) each on their boards; and in addition, one public sector entity has shown an interest in putting their whole board through the IoDSA’s CD(SA) accreditation process.
On a broader level, Natesan also recommends that government follow established governance best practice by avoiding excessive interference in board dynamics and operations. In particular, the practice of suddenly removing board members for political reasons has not only made boards dysfunctional, it has meant that fewer and fewer good candidates will come forward. The re-advertisement is proof of this, and the IoDSA believes that other parastatals are likely to face the same challenge.
The Committee chair, Joyce Moloi-Moropa, alluded to this, reportedly saying, “We will again not get good candidates because people know that they will have no security of tenure if they can be removed at a whim by the board, with the backing of the minister.”
Natesan comments that while it’s perfectly proper for the shareholder—government in this case—to appoint the board, it should then leave the oversight and direction of the organisation to the board, including the appointment of executives.
Making the right appointments upfront after proper due diligence, and maintaining role clarity without undue influence and interference will go a long way to solve these public sector challenges.
“One of the problems facing the SABC—and other parastatals—can be traced to the confusion caused by the shareholder appointing executives that the board seemingly does not support and cannot truly call to account. The ongoing furore around the SABC COO, Hlaudi Motsoeneng, is an example,” Natesan says. “In general, good governance practices have a beneficial effect on corporate performance. We have seen the results when they are not followed. The Portfolio Committee will only make progress towards putting the SABC back onto the right path if it implements a rigorous process to appoint the right directors—and then if all parties adhere to good governance principles.”
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