INSTITUTE OF DIRECTORS SOUTH AFRICA (IoDSA) MAKES KEY GOVERNANCE RECOMMENDATIONS TO ZONDO COMMISSION AHEAD OF RELEASE OF FINAL REPORT
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.
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