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A plethora of corporate governance codes has been written across the world, and in spite of their recommendations which inter alia seek to protect stakeholder interests and shareholder value, many governance failures and organisational collapses continue seemingly unabated.
In a world where the interconnected and constantly changing relationships between financial, social and environmental issues are becoming more evident, businesses that remain unaware of their impacts and dependencies on their non-financial relationships attract unnecessary risk. Indeed, these organisations also fail to recognise new opportunities for efficiency, growth, resilience and development.
With the fourth industrial revolution in full swing, businesses are looking for faster and more efficient ways to service customers. Customers are also increasingly tech-savvy and demand more from their service providers, including quicker access and more tailored offerings. Business must carefully assess legal issues that will have an impact on the ability not only to move to cloud, but also to have full beneficial use of cloud services.
The recent resignations of the CEOs of Eskom and South African Airways have again focussed the spotlight on board performance and effectiveness. Inevitably, the critical question arises: why are these CEOs really leaving? In considering the answer to this question one must include a review of the board’s composition and the extent to which the overall ‘health’ of the board may have influenced any decision to leave or not leave the organisation.
When boards of directors gather to discuss the top risks of an organisation, it may entail matters such as structurally high unemployment, labour unrest, exchange rate volatility, political uncertainty, unmanageable fraud and corruption, threats of new market entrants or even product stagnation. Whilst there are indeed many more topical risks that may be relevant to the nature of the organisation’s business and immediate environment, it is not common for a board to include the threat of their innovation and intellectual property (IP) being marginalised or lost.
The JSE has published for comment proposed amendments to its Listings Requirements to strengthen the regulation of primary listings and secondary listings. The proposed changes take account of the public comments raised during the consultation process that kicked off in September 2018 after the JSE released a consultation paper (Paper) on 'possible regulatory responses to recent events surrounding listed issuers and trading in their shares'.
South Africa’s current woes are in large part a result of a large-scale breakdown in ethics (both personal and professional) and good governance practices. One only needs to look at the goings-on at Steinhoff, KPMG, Eskom, SARS and VBS Bank to see the impact that unethical behaviour, large scale looting and unchecked business practices have had on the South African economy and on South Africans, whose confidence in the leadership of this country and those in business is at an all-time low.
Management guru, Peter Drucker, is often quoted as saying, 'If you can’t measure it, you can’t manage [or improve] it'. Constructive feedback is integral to a process of development, growth and improvement, not least in an organisational setting, and especially in the case of boards of directors.