“Acting Chief Justice Zondo’s State Capture Commission report highlights the need for formal regulation of the director profession,” says Advocate Fay Mukaddam, Chartered Director (SA) and Governance Specialist at the Institute of Directors South Africa (IoDSA). As examples, Mukaddam points to the first volume’s allegations of gross mismanagement at SAA and its chairperson at the time eventually being declared a delinquent director by the courts. “While legal action can be taken to prohibit an incompetent or criminal director from serving on any boards in the future, this is effectively closing the stable door after the horse has bolted,” she says, insisting that early prevention is better than eventual punishment. A flawed system What stands out in the report is cadre deployment that saw people appointed to boards in SOEs and public sector entities because of their political connections rather than their fitness as directors. It is evident that they often did not understand or respect their mandate and either neglected or ignored their obligation to the organisation and the law. As a result, they allowed poor performance to infect the corporate culture they were meant to heal and led their organisation to ruin. This signals a flawed recruitment, screening, selection and appointment process and a lack of appreciation for what the roles and responsibilities of a director and board are. "If one doesn't understand what they are elected to do, how can they acquit themselves of their fiduciary duties?" asks Mukaddam. It also appears that, due to their questionable appointment, they were not subjected to the same performance interventions or rehabilitation processes as everyone else. The impact of poor directors SAA is a prime example of what happens when even a few poor directors are appointed to boards. Unfortunately, director acumen and commitment to their duties vary widely across organisations in both the public and private sectors, and low performance can go unnoticed until it is too late. “Professional directors as a collective have a significant impact on the economy, yet almost anyone can become a director without possessing the level of competency essential to their office,” says Mukaddam. The vetting process is largely left to the incumbent board or the vote of the organisation’s shareholders. Mukaddam suggests that this process is unsustainable, especially in developing countries like South Africa where robust policy is critical to economic recovery. A better approach “It is long past due that an independent regulator is empowered to accredit incoming directors against global professional standards, hold them accountable for misconduct, and formalise their continuous professional development on pain of being disqualified,” states Mukaddam. Other significant professionals, like doctors, auditors or attorneys, are required to pass a bar exam or professional evaluation before being allowed to practice. They are also subject to the disciplinary oversight of their professional body and must commit themselves to monitored lifelong learning. Yet none hold more sway over their nation’s prosperity than public and private professional directors. “A regulator, supported by government and the private sector, is far more effective than a long and difficult legal battle for a delinquency judgement after an organisation is already crippled,” says Mukaddam. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on the IoDSA please visit: Website: www.iodsa.co.za Twitter: @The_IoDSA LinkedIn: Institute of Directors South Africa Company Page Facebook: Institute of Directors South Africa
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Conclusions and recommendations made in part one of the state capture inquiry report align closely to a letter sent by the Institute of Directors South Africa (IoDSA) to the Zondo Commission in September 2021. The letter included recommendations on director competencies as well as the nomination and selection of directors. Section 580 of the state capture inquiry report mentions that the appointment of board members to SOEs “has proven to be problematic and does not represent the “robust and transparent” process recommended by King IV”. It also highlights the common “disjuncture between the fiduciary duties of SOE board members and the profile, skills and expertise of incumbents”. Section 582 and 583 further explain why “the national interest demands that state owned enterprises operate under efficient and professional leadership which requires that the appointment procedure is transparent, not driven by party political interests but made in accordance with objective criteria”. King IV makes a few important recommendations relating to the governance of the nomination process. The first of these is Recommended Practice 15: “the processes for nomination, election and ultimately, the appointment of members to the governing body should be formal and transparent”. Recommended Practice 16 states that “before nominating a candidate for election, the governing body should consider the collective knowledge, skills and experience required by the governing body, the diversity of the governing body, and whether the candidate meets the appropriate fit and proper criteria”. “While we welcome the alignment between the conclusions of the report and what the IoDSA has been saying for years, we are anxious to see the implementation of the recommendation on the professionalisation of directors,” says Parmi Natesan, CEO of the IoDSA. Professionalising directorship will not automatically eliminate incompetent or corrupt directors any more than professionalising medicine or engineering achieved that goal. It will, however, provide an objective framework for ensuring that directors have the required skills in terms of an objective competency framework, and that they can be disciplined in terms of a professional Code of Conduct. Alongside the professional skills a modern director needs, it is vital that individuals who serve as directors possess the necessary personal qualities. Directors should above all be ethical, independent and courageous. Courage and independence are particularly necessary because directors must put the interests of the organisation first, and this may mean going against the interests of the parties which appointed them or, indeed, their own interests. “Our highly respected director development programmes, Certified Director (SA) and Chartered Director (SA) designations, and governance advisory services are available immediately to support the implementation of the recommendations made by the Commission,” says Natesan. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@atthatpoint.co.za, www.atthatpoint.co.za For more information on the IoDSA please visit: Website: https://www.iodsa.co.za/ Twitter: https://twitter.com/the_iodsa LinkedIn: https://www.linkedin.com/company/institute-of-directors-in-southern-africa Facebook: https://www.facebook.com/TheIoDSA More laws and regulations are not going to solve the many problems business—and the country—face. Only changed behaviour will do that. Authored by Parmi Natesan, CEO, Institute of Directors in South Africa (IoDSA) Reading through the proposed amendments to the Companies Act again, it struck me that they are symptomatic of a general South African problem: too much regulation, too few results. No doubt some of these amendments are necessary, but will they actually address the big issues that concern us all? It’s doubtful. We already have a huge legal superstructure, and yet corruption, corporate wrongdoing and all sorts of other shenanigans continue to dominate the headlines. Rules are obviously important. But no matter how well drafted or necessary, they will not be effective if they are out of sync with the surrounding culture, and if they are not implemented by people with the right skills and attitude, with visible consequences for transgressions. In addition, if there are too many onerous laws and regulations then businesses (and citizens, in the end) begin to find them burdensome and turn either to mindless compliance or outright circumvention. One example that will prove my point is the proposal to mandate the disclosure of pay gaps between the highest and lowest earners. The intent—addressing the social inequality prevalent in the country—is certainly necessary, but this is a complex issue not solvable simply by a set of rules. One might argue that if the wage gap is the outcome of a faulty economic system, then fixing it requires the fundamentals to be addressed—simply disclosing the wage gap in isolation is futile. Disclosure needs to be complemented by policy change and a mechanism for monitoring how the gap has changed over time. We also need to agree that a wage gap will always exist, but what the parameters of an acceptable wage gap look like. As it now stands, the current proposals risk a slew of unintended consequences. One is the real possibility that they would simply speed up the brain drain as top executives move to jurisdictions where earning high rewards is less complicated or threatened. The proposals could also prompt companies to restrict the hiring of junior employees and outsource lower paid employees in order to improve the gap between highest and lowest paid. Some companies could even relocate to avoid rules that are perceived to make doing business more difficult. Losing companies and executives, not to mention jobs and taxpayers, would surely be an unintended—and highly negative—consequence. One final point that needs to be made. With the latest official unemployment figures standing at 34.9%, focusing on the wage gap seems a little unbalanced given that a third of our people are without any job at all. Changing hearts and minds The phenomenon of overregulation is widely recognised as something that needs to be solved. President Ramaphosa has set a target for South Africa to better its ranking in the World Bank’s Ease of Doing Business Index, from 82 to 50. Part of the solution is surely to cure our addiction to solving problems by making new laws, and rather find ways to change how organisations and the people within them think and behave. Corporate governance codes provide a useful example of an alternate approach. Having started off with a somewhat compliance-based approach, the King Reports on Corporate Governance have mutated into something quite different: King IV has moved decisively from being a set of “rules” that ought to be complied with (often while circumventing the spirit of the rule) to a set of outcomes that are aspirational. In parallel, the emphasis has shifted to requiring an explanation of which recommended practices have been applied in order to achieve each principle, and away from the simple implementation of static requirements. Substance over form, in other words. King IV thus ultimately aims to change the culture of the organisation, and how it does business. We are not there yet, of course, but if stakeholders and the overall social context demand it, it will happen. A prerequisite will be that corporate and government leaders begin to embody a culture based on ethical and effective leadership that in the end supersedes the “rules”. The importance of the outcomes-based approach embodied in King IV can hardly be overstated. One of its main advantages is that it is non-prescriptive and flexible, allowing organisations latitude in how they go about applying the code’s principles so long as they explain what their thinking was and what progress they have made. Unfortunately, since its launch, we have not seen disclosure with the depth intended by the Report. To conclude, I want to emphasise that a solid body of good laws remains an essential foundation for a vibrant economy and a just society, but it cannot succeed unless the surrounding culture also changes. Instead of putting more laws on the statute books, government should be focused on making it easier to do business and supporting efforts to change the culture that pervades business, and the nation at large. Absent that, we will not address the real issues—inequality, financial inclusion, environmental stewardship and so on—while risking a further contraction of the economy with everything that would entail. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@atthatpoint.co.za, www.atthatpoint.co.za For more information on the IoDSA please visit: Website: www.iodsa.co.za Twitter: @The_IoDSA LinkedIn: Institute of Directors in Southern Africa Company Page 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: Website: www.iodsa.co.za Twitter: @The_IoDSA LinkedIn: Institute of Directors in Southern Africa Company Page 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: Website: www.iodsa.co.za Twitter: @The_IoDSA LinkedIn: Institute of Directors in South Africa Company Page 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: Website: www.iodsa.co.za Twitter: @The_IoDSA LinkedIn: Institute of Directors in South Africa Company Page 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: Website: www.iodsa.co.za Twitter: @The_IoDSA LinkedIn: Institute of Directors in South Africa Company Page MANDATORY VACCINATIONS – INSTITUTE OF DIRECTORS IN SOUTH AFRICA (IoDSA) URGES A CONSIDERED APPROACH23/9/2021 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: Website: www.iodsa.co.za Twitter: @The_IoDSA LinkedIn: Institute of Directors in Southern Africa Company Page CONCERN OVER CURRENT SA ECONOMIC CLIMATE BUT DIRECTORS MORE BULLISH ABOUT FUTURE BUSINESS CONDITIONS20/9/2021 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: Website: www.iodsa.co.za Twitter: @The_IoDSA LinkedIn: Institute of Directors in South Africa Company Page 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: Website: www.iodsa.co.za Twitter: @The_IoDSA LinkedIn: Institute of Directors in South Africa Company Page |
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