Institute of Directors in Southern Africa & The Ethics Institute

​Eskom’s decision to pursue disciplinary action against its suspended acting-CEO, Matshela Koko, raises important governance and ethical issues that directors and executives should consider carefully, say Parmi Natesan, Executive: Centre for Corporate Governance at the Institute of Directors in Southern Africa (IoDSA) and Professor Deon Rossouw, CEO of The Ethics Institute (TEI).
 
“Mr Koko stands accused of influencing the awarding of lucrative contracts to a company in which his stepdaughter is a director. While we should be careful not to prejudge this specific case, conflicts of interest like this represent a major hazard for board members and executives, if they are not managed correctly from the start. All of us should see Mr Koko’s predicament as a wake-up call to make sure our own houses are in order,” says Natesan.
 
The first point to make is that a senior executive like Mr Koko is both an employee of the company; and a deemed director or prescribed officer in terms of the Companies Act. Such a person is thus bound both by the internal policies of the company and the legal requirements of the Act. As regards the former, it would be necessary to see whether any company policies were breached in the way the contracts were awarded, and whether Mr Koko was himself involved in this process, and whether he disclosed his interest appropriately.
 
“It needs to be made clear that claiming ignorance is not a good enough defense.  As  a senior executive, Mr Koko should have investigated actively the interests of any of his related parties, even to the extent of requesting them in writing to inform him if they had any interests in organisations doing business with the company,” she explains. “This would show that he took reasonably diligent steps to be informed. One should never lose sight of the fact that as a senior executive, he has to set an example to the rest of the organisation and protecting its reputation.”
 
 
 
Natesan notes that conflicts of interest are to be expected in business, and do not necessarily constitute evidence of any impropriety: the key issue is how they are handled. King IV thus recommends that members of governing bodies should declare their financial, economic and other interests, and those of their related parties, at least annually. In the same vein, each board or board-committee meeting should be prefaced by a formal declaration of any specific conflicts of interest relating to the agenda.
 
Professor Rossouw points to the fact that humans are naturally inclined to act in their own interests or in the interests of their immediate family and friends. While the Companies Act and governance codes like the King Reports are examples of legal and voluntary constraints to the pursuit of self-interest, they will ultimately prove ineffectual unless the individuals concerned act ethically.
 
“I find it significant that the very first principle of the King IV Code on Corporate Governance emphasises that members of governing bodies, both individually and collectively, should act in an ethical manner. In unpacking what is meant by ethical behaviour, the Code starts by focussing on the personal integrity of members of the governing body. They are reminded that as directors, they must act in the best interest of the company, and that they must deal with conflicts of interest appropriately. King IV sees integrity as a characteristic that should be cultivated and exhibited, so that directors develop the inclination to act in the company’s best interests, not their own” he says.
 
“By sensitising directors not only to actual conflicts of interest but also potential or perceived ones, ethics plays a crucial role in avoiding the reputational damage and financial costs when a conflict of interest is found, or even suspected not to have been handled correctly —as we see in the case of Mr Koko.”
                                                                                        
ENDS

 
MEDIA CONTACT: Carla Coetzee, 072 112 8347, carla@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 Southern African Company Page  
 
 For more information on The Ethics Institute please visit:[DR1] 
Website: www.tei.org.za
Twitter: @EthicsInst
LinkedIn: The Ethics Institute Company Page

Government’s undertaking to finalise a board-appointment framework for state-owned entities (SOEs) by March 2018 is warmly welcomed by the Institute of Directors in Southern Africa (IoDSA). The move is one of the key steps outlined in Government’s Inclusive Growth Action Plan, which was released by the National Treasury on 13 July 2017. The Plan is intended to kick start economic growth, end the recession and stave off further downgrades. 

“State-owned entities are key enablers of economic growth, particularly in South Africa, and the IoDSA has repeatedly argued that their lack of performance is linked to imperfect governance, particularly when it comes to appointing directors,” notes Parmi Natesan, Executive: Centre for Corporate Governance at the IoDSA. “We will certainly be making our specialist expertise in this area available to Government going forward, as it works to create the framework for appointing SOE board members.”

Natesan says that the IoDSA has already interacted with the Department of Public Service and Administration in this regard, and has made several recommendations for its consideration. As the torchbearer for corporate governance and the convenor of the King Committee, the IoDSA will certainly hold itself ready to contribute further as Government gets down to the details of the proposed framework. 

The IoDSA has long argued that “board composition probably has the greatest single impact on the future success of an organisation”, to quote its recent board appraisals benchmark study. 

Directors need to have the requisite knowledge, skills, experience and personal qualities, and should be appointed through a formal, independent process. This is critical in any organisation, but particularly for SOEs because of their influence on the rest of the economy, and the difficulty of keeping political and economic goals separate. 

As the IoDSA has pointed out before, it is critical that the state as shareholder and the board understand their respective roles, and that undue political interference in the appointment of board members is avoided. Boards cannot be held accountable for the SOE’s performance if they are unable to exercise their judgement freely and in the best long-term interests of the organisation, Natesan says. 

Another critical factor is the need for demonstration of appropriately skilled and experienced directors. To help resolve this, the IoDSA is playing a leading role by providing training related to each of the 20 competencies identified in its Director Competency Framework. It has also introduced the professional Chartered Director (SA) designation in 2013 and more recently the Certified Director designation, in a bid to professionalise the directorship role, providing directors with a way to ensure they build the right competencies; and organisations with a way to ensure they are getting the directorial talent their boards require to function effectively. 

The final piece of the puzzle is regular, objective assessments of board performance. 
“The IoDSA is committed to improving corporate governance across South Africa. Effective corporate governance can improve organisational performance over the long term, which has socio-economic benefits for the country as a whole, but it will also contribute to reversing the perception of corruption that is swamping our public life,” Ms Natesan concludes. “While the IoDSA is a non-statutory, voluntary body and cannot act directly to penalise improper conduct, we have a key role to play in building awareness, providing training and guidelines, and influencing governance policy. We believe this element of the  Inclusive Growth Plan offers a great opportunity for us to do so.”
ENDS

MEDIA CONTACT: Carla Coetzee, 072 112 8347, carla@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 Southern African Company Page  

The Mail & Guardian reports that SAA chair, Dudu Myeni, has recently missed several special board meetings, and that her colleagues on the board are taking legal advice in this regard. If these reports are true, they may indicate that Ms Myeni is failing to fulfil some of her duties as a director, and more specifically a chair.

The reports also demonstrate the intimate connection between good governance and organisational performance and sustainability, adds Parmi Natesan, Executive, Centre for Corporate Governance, Institute of Directors in Southern Africa.

“It is common knowledge that SAA is in dire financial straits, and has been for some time. At such a time, more than ever, the board and especially its chair have a critical role to play in providing leadership in steering the organisation into calmer waters,” Ms Natesan says. “Not attending several special board meetings at a time such as this is worrying, especially given that board meetings are typically scheduled around the chair’s availability in the first place.”

The law requires directors to exercise care, skill and diligence in their role. It is generally agreed that in this context, board members should not only attend meetings, but also prepare rigorously for them in advance, so that they can make a valuable contribution. If they cannot attend, they should furnish valid reasons to the rest of the board, and also consider providing input before the meeting on the matters to be discussed.

Because board chairs play such an important role, various governance guidance documents elaborate on this responsibility.   Providing overall board leadership and presiding over board meetings to ensure that time in meetings is used productively are just two of the many vital functions that would be difficult to exercise when a chair is repeatedly absent.

“It would also be interesting to know whether the SAA board has a deputy chair in place, or a lead independent director, to ensure that meetings can proceed effectively in the chair’s absence,” says Ms Natesan. “The troubles at SAA and other parastatals provide yet more support for what the IoDSA has always emphasised: the principles of good governance are integral to improved performance and sustainability. We hope the board will show the courageous leadership that is needed to pull the organisation back on track.”

ENDS

MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@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 African Company Page 

​Social inequality is a strategic risk for businesses globally, and particularly in South Africa. Consequently, directors need to ensure that initiatives to reduce inequality are core to the organisation’s strategic thinking and planning, says Karin Ireton, Chair of the Sustainable Development Forum (SDF), a forum of the Institute of Directors in Southern Africa (IoDSA).
 
The SDF today launched a paper offering practical guidance to help directors and executives build effective, strategic responses to the challenge of social inequality.
 
“As we have seen over years of protests about service delivery, unequal access to the most basic services affects many South Africans. In turn, that inequality translates into greater challenges in obtaining education and employment, negatively impacting the environment in which business operates, from the national mood to employee productivity, market resilience and the health of the supply chain,” says Ireton. “When inequality is particularly marked, as it is in South Africa, it threatens the long-term profitability and sustainability of all businesses.
 
“While the primary responsibility for social redress rests with the state, business can and must play a role in promoting growth and prosperity. In line with the integrated thinking proposed in King IV, it makes good business sense to prioritise social inequality on the agendas of governing bodies and their strategic decision-making,” she adds.
 
In short, directors need to steer organisations beyond seeing corporate social investment or philanthropy as a sufficient response to this challenge. Rather, overcoming social inequality should be an essential part of an organisation’s strategic review and goal setting.
 
The paper shows how various aspects of social inequality impact specific business risks. For example, unequal education affects the available workforce and productivity; unequal healthcare affects productivity; and unequal opportunity creates resentment and, ultimately, an unstable market environment.
 
“These are real business risks, and their scale and urgency in South Africa means a more business-like approach is needed, with the focus shifting from the amount spent (the typical corporate social investment metric) to effective monitoring and the measurement of impact,” says Ireton. “We have already seen this shift in the skills area: as access to the right skills has become a real risk, so companies have moved from a conventional bursary programme as part of corporate social investment into a formal investment in skills development pipelines.”
 
The “talent risk” is particularly acute in highly unequal societies. Unequal countries like South Africa invariably have low-growth, unstable economies, and thus tend to become net exporters of those with scarce skills, who emigrate to seek greener pastures.
 
The paper offers a set of 13 practical guidelines for directors to consider as they seek to make a measurable impact on social inequality in the quest for sustainability. Such guidelines include a continuous assessment of the socio-political context in which the organisation operates, particularly in relation to the shifting landscapes of key stakeholders; identifying opportunities that return benefits that extend beyond shareholder profits and employee remuneration; and looking at these issues with an operational focus.
 
At a broader level, organisations need to find ways to promote inclusive capitalism and long term shared value, in which the widest possible grouping (stakeholders, consumers and communities) benefit from initiatives that also secure new markets for the organisation.
 
“As the King Reports have consistently argued, organisations do not exist in a vacuum, and thus helping to ensure a healthy, stable society is a legitimate business goal. Inequality, as the driver of social instability and reduced economic opportunity, has become one of the most pressing business risks in the country,” concludes Tanya Nassif, Governance and Legal Specialist at the IoDSA. “Directors thus have the obligation to integrate initiatives for reducing inequality into their fundamental strategies in order to mitigate this risk. This paper begins to show how this can be done.”
 
ENDS
 
MEDIA CONTACT: Carla Coetzee, 072 112 8347, carla@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 Southern African Company Page  

Executive remuneration has become a symbol of inequality in today’s global economic order. Shareholders are becoming more active in demanding that executive pay is more closely linked to results and stakeholders want a broader focus on the context in which the organisation operates. 

For example, Anglo American recently responded to investor criticism of its executive remuneration policy by announcing it would revise its policy. It seems excessive executive reward will continue to attract push-back from investors. 

As a result, says Ray Harraway, Chair of the Remuneration Committee Forum of the Institute of Directors in Southern Africa (IoDSA), the work of the remuneration committee is critical to a company’s social licence to operate, and thus its sustainability. 

Speaking after the launch of the Remuneration Committee Forum’s position paper on fair and responsible remuneration recently, Mr Harraway said that getting remuneration right is not easy. “There are no right or wrong answers, there is no ‘number’ that a consultant can provide you with,” he pointed out. “What’s needed is professional judgement exercised within the context of the organisation and the society in which it operates. I fear that many remuneration committees do not have the skills, or courage, needed to make the right decisions.”

The position paper addresses many of the deep questions that remuneration committee members must ask themselves. They include why remuneration should be fair and responsible in the first place, and what the difference between “fair” and “responsible” actually is. 

A particularly contentious area is the wage gap within organisations. The paper argues that using pay ratios is ultimately not helpful when trying to come to grips with it. The main reason is that the ratio is significantly affected by the organisational structure of the company. For example, a company with both a COO and a CEO would have a better pay ratio than one with just a CEO, while a company that outsources lower level jobs could have a lower pay ratio than a competitor that does not. Similarly, a bank that has more high-skilled workers would have a lower pay ratio than a miner or retailer with large numbers of low-skilled workers. 

A better tool could be a pay index which tracks CEO pay, median employee pay and the total shareholder revenue of the company in question. 

“An important recommendation in King IV is that the remuneration of executive management should be fair and responsible in the context of overall employee remuneration. It should be disclosed how this has been addressed,” says Parmi Natesan, Executive, Centre for Corporate Governance, IoDSA. 

The problem with pay ratios is part of the larger one of mindlessly using benchmarks to set pay levels. A much better approach, Mr Harraway argues, is for remuneration committees to develop their own methodology but be prepared to communicate its thinking clearly. In general, remuneration committees must effectively communicate their thinking to all stakeholders. Such an approach actually goes a long way towards resolving concerns about fairness. To do so, it is vital that remuneration committee members understand the company’s strategy and how it creates value, in order to link value creation to pay. 

“This paper positions company directors and remuneration committee members well to rise to the challenge of one of the most vexing but important questions facing governing bodies today,” says Joanne Henstock, EY Executive Director and Remuneration Committee Forum member. This guidance provides critical assistance for boards in Southern Africa, where we continue to experience the challenging effects of a deficit of professional directors and mature board leadership skills.”

“Fair and responsible pay” can be downloaded by visiting http://bit.ly/2mUYROy 

ENDS
 
MEDIA CONTACT: Cathlen Fourie, 082 222 9198, cathlen@thatpoint.co.za, www.atthatpoint.co.za
 
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
Twitter:  @The_IoDSA
LinkedIn: The Institute of Directors in Southern Africa ​

​The ongoing parliamentary enquiry into the SABC has eluded to the suggestion that one of the causes of the public broadcaster’s poor performance was a board that did not possess the right mix of knowledge, skills and experience to be able to discharge its duties effectively. Parmi Natesan, Executive, Centre for Corporate Governance, Institute of Directors in Southern Africa (IoDSA), says that the investigation’s findings make a strong case for the benefits of professionalising directorship. 

“The parliamentary enquiry into the SABC demonstrates that the quality of governance exercised by the board has a knock-on effect on a company’s operational effectiveness,” Natesan says. “It’s also clear that board members must have certain knowledge, skills and experience in order to fulfil their responsibilities. To give one example, recent media reports indicate that some of the board members did not properly understand the Broadcast Act, and thus were not in a position to ensure the legal mandate was fulfilled. 

“However, board members cannot claim ignorance as an excuse, and the onus is on them to be properly informed prior to making decisions.”

This kind of situation can be avoided if board members are properly inducted onto the board, and proactively expand their knowledge of the company, the market/legislative regime in which it operates and developments in corporate governance. But they also need to have a good understanding of what their duties and responsibilities as directors are. 

Angela Cherrington, CEO of the IoDSA, says that because markets change so rapidly and are increasingly competitive, boards are under increasing pressure to maintain the right levels and types of skill, experience and diversity to keep the company on the right course. 

“Directors play a hugely important role, and their job is becoming much harder. The case for a new breed of professional directors is growing stronger by the day. Companies would be able to assess objectively what skills individuals have, and thus whether they would complement the existing board’s skills. As professionals, directors would also have to commit to a formal, ongoing programme of professional development,” she explains. “Professional directors would be bound by a code of conduct enforced by a professional body.”

In response to this growing need in corporate South Africa, the IoDSA launched a professional designation, Chartered Director (SA), or CD(SA). According to Cherrington, this initiative recognises that directors require specialist skills, experience and integrity alongside their purely business skills. The CD(SA) designation also gives directors a way to demonstrate their mastery of the director competencies, and to enhance them through a formal continuous professional development programme. They would have to subscribe to a code of professional ethics. 

In addition, the IoDSA will soon be re-launching Certified Director, an interim designation on the pathway to CD(SA).  This re-introduction aims to capture those individuals who do not yet have the board experience to enter the CD(SA) process, but who have the knowledge necessary to start their directorship journey.

The IoDSA administers, and is the custodian of, the both designations. 

“We were delighted to see that PWC’s Non-executive directors: Practices and remuneration trends report for 2017 predicts that ‘non-executives will become specialised professionals’ in order to meet the challenge of increased business risk,” Cherrington concludes. “The CD(SA) designation provides a framework against which directors can be measured and grown, and it will increasingly become the gold standard for directors in both the public and private sectors.”

ENDS
 
MEDIA CONTACT: Cathlen Fourie, 082 222 9198, cathlen@thatpoint.co.za, www.atthatpoint.co.za
 
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
Twitter:  @The_IoDSA
LinkedIn: The Institute of Directors in Southern Africa 

The King IV Report on Corporate GovernanceTM (King IV) was launched on 1 November 2016 by the King Committee and the Institute of Directors in Southern Africa (IoDSA), which owns the intellectual rights to the King Reports and the governance codes they contain. The King Reports, of which this is the fourth iteration, contain the philosophy, principles and leading practices for corporate governance in South Africa.
 
“The overarching objective of King IV is to make corporate governance more accessible and relevant to a wider range of organisations, and to be the catalyst for a shift from a compliance-based mindset to one that sees corporate governance as a lever for value creation ,” says Prof Mervyn King, chair of the King Committee on Corporate Governance in South Africa.
 
To make the Report more accessible, Ansie Ramalho, King IV Report Project Lead for the IoDSA, and the task team appointed by the King Committee, have introduced a number of innovations. They have broadened the language of the Report, ensuring that the vocabulary is no longer listed company and business-specific, and have provided supplements to make it easier to adapt the Code to different industry sectors, including government and non-profits, and various organisation types. King IV also provides guidance on how to apply its practices proportionally, in line with an individual organisation’s size and resources, and the extent and complexity of its activities.
 
In addition, King III’s 75 principles have been reduced to a mere 16 in King IV, with an additional 17th principle which is applicable to institutional investors such as retirement funds and insurance companies.
 
At a deeper level, King IV has taken the decisive step of focusing on outcomes as a way of driving acceptance of corporate governance as integral to value creation by organisations characterised by an ethical culture, good performance, effective control and legitimacy.
 
Linking governance to outcomes should result in organisations practising quality governance. In this spirit, King IV emphasises not what practices have been implemented but rather what their impact has been on achieving the 16 principles. King IV has moved the regimen of “apply or explain” to “apply and explain”.
 
“Apply and explain” introduces a qualitative approach to the implementation of King IV’s recommendations. Governing bodies now have greater flexibility in how they implement the recommended practices to achieve the goals articulated in the principles, but they have to be transparent about how they did so. The intent is for the reader of the explanation to be able to make an informed decision about whether the organisation has or has not achieved the principles and realised the four outcomes of ethical culture, performance in a sustainable manner, effective controls and legitimacy.
 
Other important issues covered by King IV include the wage gap, shareholders   voting on remuneration policies and their implementation so as to trigger engagement with the company and the composition of the governing body.
 
“King IV is the product of wide consultation, and belongs to all South Africans – organisations and individuals – to whom good governance matters,” says Ramalho. “The wish of the King Committee and the IoDSA is that King IV be welcomed as making it easier to understand what the purpose of corporate governance is, and to apply it to achieve the creation of value. King IV aims to make corporate governance understandable beyond the circle of consultants, technicians and academics.
 
Prof King said it would be the committee’s greatest reward if King IV is adopted by all organisations across all sectors with a consequent consistent practice of quality governance.
 
King IV will be available via app download from App Store or Galaxy App Store, or via a digital read-only copy from www.iodsa.co.za. Printed copies will be available for purchase through Lexis Nexis.

ENDS
 
MEDIA CONTACT: Cathlen Fourie, 082 222 9198, cathlen@thatpoint.co.za, www.atthatpoint.co.za
 
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
Twitter:  @The_IoDSA
LinkedIn: The Institute of Directors in Southern Africa group  ​​

Parmi Natesan, Executive: Corporate Governance on behalf of the Institute of Directors in Southern Africa (IoDSA) has become a member of the 30% Club Steering Committee. Founded in Britain in 2010, and active in South Africa since 2014, the 30% Club aims to achieve a minimum of 30 percent female representation on the boards of listed companies. The Club seeks to harness the influence of influential board members to make gender diversity a strategic initiative.
 
“The 30% Club does not believe that mandatory quotas are the right approach—we focus on catalysing sustainable change through persuasion, and by demonstrating the value that diversity can bring to the boardroom,” says Colleen Larsen CE of Business Engage, a consultancy focused on gender mainstreaming and the custodian of the 30% Club in Southern Africa. “Our approach is a positive one, and it is working.”
 
Larsen says that the drive for gender parity on boards is underpinned by companies’ need to access the best talent; actively recruiting female directors ensures a deeper, broader talent pool for them. Having solid female representation on the board also means that companies are better equipped to relate to the broader stakeholder groups that are a feature of the business world now.
 
Research by McKinsey shows that better gender balance on boards brings companies closer to their employees, shareholders and stakeholders. In fact, a European Commission study suggests that 58 percent of companies that have implemented diversity programmes have realised better employee motivation, while 57 percent have improved customer satisfaction and 69 percent have noted an improved brand image. Women are the driving force behind more than 70 percent of purchasing decisions.
 
The McKinsey research has also established a correlation between a certain level of gender diversity and financial performance.
 
The name of the Club alludes to the presumed critical mass required to change boardroom culture and dynamics, and to begin achieving the benefits of gender diversity.
 
“One big challenge is that board appointments still tend to be made from within the current board members’ own networks, so a conscious effort has to be made to open up the net and look beyond the ‘old boys’ network’ to find aspiring female candidates,” Natesan says. “The other side of the coin is that those women need to be properly equipped to deliver value on boards and that’s where the IoDSA plays a big role. Our director development programmes, based on our Director Competency Framework, and our Chartered Director (SA) designation, offer prospective female directors a way to demonstrate their competence for boardroom positions. Membership of the IoDSA also provides the invaluable opportunity for networking with like-minded senior business leaders as well as the ability to access the latest governance thought leadership in order to keep up to date with date with developments affecting directorship.”  
​
ENDS
 
MEDIA CONTACT: Cathlen Fourie, 082 222 9198, cathlen@thatpoint.co.za, www.atthatpoint.co.za
 
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
Twitter:  @The_IoDSA
LinkedIn: The Institute of Directors in Southern Africa group  ​​

The Minister of Finance, Pravin Gordhan, has recently renewed his calls for a new board to be appointed at South African Airways (SAA).  His comments come as the national carrier’s financial statements are delayed, owing to the Treasury not providing the guarantees needed to convince its auditors that it is a going concern.
 
Minister Gordhan is quoted as stating that the guarantees will only be considered once the airline has a new board and executive team. This‚ Gordhan told a business breakfast‚ would require a “whole new board” of “credible people… with the right balance of skill and exposure”.
 
According to Parmi Natesan, Executive: Centre for Corporate Governance at the Institute of Directors in Southern Africa (IoDSA), “The IoDSA’s Board Appraisal Benchmark Study shows that public sector boards perform less well than those in the private sector. One of the reasons for this, sited by public sector board members themselves, is that board members are often political appointees, and thus lack the necessary knowledge, skills, experience and independence to fulfil their roles adequately.”
 
The IoDSA’s Board Appraisal Benchmark Study concluded that board composition is probably the single most important governance factor in respect of an organisation’s future success. Interviews with members of these boards indicate that key challenges include the fact that incorrect criteria are used in appointing board members, lines of accountability are not clear, and a lack of industry knowledge resulting from the high turnover of ministers, MECs and directors.
 
Need for professional directors
“When it comes to appointing new members to the SAA board, it would be wise to ensure they have the correct knowledge and skills—public-sector directors have a tough job and the company’s performance is dependent on their competence,” Natesan says.
 
“Directors generally have such an important role to play, and the issues they face are so complex, that a new cadre of professional directors is required.”
 
In response to this need, the IoDSA has introduced a formal professional designation for directors, the Chartered Director(SA) or CD(SA). In addition, a structured pathway has been designed to enable directors/aspiring directors to acquire the director competencies they need to complement their existing business skills whilst working towards the designation. The CD(SA) designation also enables directors to demonstrate objectively their fitness to serve on a board, and provides a vehicle for continuing professional development.
 
“While the pool of CD(SA)s is still relatively small, the pathway and ultimate designation should be used as a benchmark for competency to serve as a director in South Africa,” says Natesan. “If SAA is to turn the corner, it needs board members with the right knowledge, skills and personal competencies; and a clear understanding of their responsibilities to the organisation, to the state and, ultimately, to the citizens.”

ENDS
 
MEDIA CONTACT: Cathlen Fourie, 082 222 9198, cathlen@thatpoint.co.za, www.atthatpoint.co.za
 
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
Twitter:  @The_IoDSA
LinkedIn: The Institute of Directors in Southern Africa group  ​​