Directorship by Buyi_d

October | November | December 2014

SEEING THE BIG PICTURE WHY ARE VISIONARY BOARD MEMBERS SO IMPORTANT? INFORMED DISSENT HOW TO HANDLE DISAGREEMENTS AT BOARD LEVEL

Brilliant across the board. As a member of the Institute of Directors of South Africa you can expect a deal straight from the top drawer. Simply inform your nearest Mercedes-Benz dealer of your IoDSA status to take advantage of an exclusive opportunity that includes preferential service bookings, a 6 year/100000km maintenance plan, and of course, guaranteed discounts* and other special offers. *Not in conjunction with other Mercedes-Benz Fleet Programmes/Offers. Excludes AMG and Limited Edition models. Vehicle specifications may vary for the South African market.

CONTENTS 02 03 04

An IoDSA View | Angela Oosthuizen

08 12

Changing organisations from the inside out | Samantha Du Chenne

Editor’s Note | Jeremy Maggs Focusing on the ‘Big Picture’ | Rodney Weidemann

The dissenting director: What to do when board disagreements cannot be resolved | Donovan Jackson

Performance indicators for value creation | Tim Anderson

18 20

A View From... Anton van Wyk Critical criteria for strategic leadership in high performing companies | Dr Lorraine Lear

The working from home debate | Lynette Dicey

28 30 32 34 37 38 39 40 42 44

Challenges facing public sector boards | Parmi Natesan Tax avoidance and the Audit Committee | Thingle Pather & Parmi Natesan IoDSA FAQs - Audit Committee assessment of finance function | Parmi Natesan Member profiles: Profiling Chartered Director (South Africa) Book reviews Report Back: Wine - An evening of three halves | Jeremy Sampson Wine review: How about a tequila? | Jeremy Sampson Road Test: Audi hones A8’s character | Wynter Murdoch Travel: 4 hours in Miami | Kate Kennedy King Free: Ban the Monday meeting | Jeremy Maggs

Publisher: Richard Lendrum Editor: Jeremy Maggs Managing Editor: Debbie Bassa debbie@thefuture.co.za Layout: Buyisiwe Dlamini Production Manager: Mabel Ramafoko A division of Future Group (Pty) Ltd

Directorship is published by Future Publishing (Pty) Ltd PO Box 3355, Rivonia, 2128 No 9, 3rd Avenue, Rivonia 2128 Telephone: (011) 803-2040 Fax: (011) 803-2022. Opinions expressed in Directorship are not necessarily those of the publishers. Permission to re-publish any article or image or part thereof must be obtained in writing from the publisher. © Future Publishing

From IoDSA

Thinking about Thinking Office Bearers Patron Basil Hersov President Reuel Khoza First Vice-President Mervyn King Vice Presidents Roy Andersen, David Brink, Bertram Lubner

n the weeks leading up to occupying the seat of Chief Executive Officer, I spent much time in quiet reflection readying myself for a change in role and a new chapter with the IoDSA. With every new chapter in life, be it business or personal, one has the opportunity to reflect on the path that has led you to that point, and the paths and possibilities emanating from that point. This time of reflection got me ‘thinking about thinking’. As leaders, managers and employees, we need to think more – our busy lives often compel us to act quickly, often negating the importance of reflection or critical thinking. Although this might not be true for all of us – it is worth thinking about. This extends to the boardroom. The IoDSA’s board appraisal benchmarking survey shows that many boards do not focus sufficient time on strategy. The ineffective boards spend too much time on the doing ‘hands on’ activities of the business rather than the thinking ‘brain on’ reflection and forward looking. Could we be part of the problem, at least in terms of the board of the future? Are we fostering a culture of thinking or one of doing? Granted one requires the support of the other for the greatest impact, we should take the time to consider how we are promoting and transferring the practice of thinking to our teams to build leadership capacity and groom talent. We consume data and information at a rapid rate and reflexively take action. Sometimes, without thinking, we fly through e-mail correspondence, tweeting, posting, all manner of responses favouring the speed of delivery we have become accustomed to and move from one meeting into the next. It comes down to making the commitment to reflect and entrench it in our behaviour and

Non Executive Directors

the behaviour of those around us. I don’t mean the light daydreaming kind of thinking, but rather the deep reflection or critical thinking that impacts decision-making. There are different dimensions of thinking that we should consider mastering in order to become better critical thinkers – we need to be able to identify the different parts of thinking and be able to assess the use of these parts. Parts could include the purpose of our thoughts, the ability to figure something out, the ability to make assumptions, having a point of view, and using data, information or evidence to inform decision-making. Good thinking pays off. We’ve seen that poor thinking inevitably causes problems, wastes time and energy and results in frustration. Although thinking is something we are all capable of doing, critical thinking is ‘the disciplined art of ensuring that you use the best thinking you are capable of in any set of circumstance’. (Elder and Paul, 2014) Planning to think and, even more importantly, allowing our employees to do the same, can only benefit us in the long run. I recall a statement made by author Dick Cross which gave me pause and which I share with some poetic licence for effect: ‘Our organisation is the product of our collective thoughts... What we think, it becomes’. In closing, I encourage you to consider your thinking, make time for critical thinking and give your teams time for thinking, too. Let us actively plan to think! C Angela Oosthuizen, Chief Executive Officer @angelao28

Venete Klein (Chairman), Prieur du Plessis (Deputy-Chairman), John Burke, Yolan Friedmann, Ingrid Goodspeed, Sathie Gounden, Khutso Mampeule, Marichen Mortimer, Pumla Radebe, Muhammad Seedat. Executive Director Angela Oosthuizen (Chief Executive Officer) Regional Chairmen Sonny Ako-Nai (KwaZulu-Natal), George Zacharias (Western Cape) Offices National Office info@iodsa.co.za Tel (011) 035 3000 Fax (011) 444 7907 Western Cape Branch iodwestcape@iodsa.co.za Tel (021) 715 3757 Fax (021) 715 3762 KwaZulu-Natal Branch iodkzn@iodsa.co.za Tel 082 495 9596 Fax (031) 266 5196 Website: www.iodsa.co.za

Connect with the IoDSA on social media Institute of Directors in Southern Africa @The_IoDSA #DirectorshipMag

Editor’s Note

One eye on the test match and the other on the spreadsheet

oard meetings are all too often a regimented and orchestrated process where a strict agenda is followed. Decisions are taken based on solid advice with relevant and interrogative questioning. If the meeting is well chaired it shouldn’t last more than three hours at the most, and directors leave safe in the knowledge that their fiduciary and strategic responsibilities have been well exercised. But something is missing from this very predictable corporate equation. Where is the big thinking? Where is the killer question that is going to upset the proverbial applecart? Where is the vision and the visionary thinking that is going to challenge the company and its principles to the very core? Will someone say something uncomfortably upsetting that will facilitate a change in direction? More often than not, that doesn’t happen around the boardroom table and the upshot is a moribund organisation that is recycling re-treaded ideas. In this edition we ask the question: do you have big picture people on your board and why they are important to the long-term survival of any company in a hyper-accelerated economy? It’s our advice to seek them out and ask them to come and disrupt proceedings. You won’t necessarily like the process but, it could change your business for the better.

Allied to that is a serious take out from a position paper from the IoDSA’s Corporate Governance Network that explains in some detail how to deal with dissent at board level and what to do when directors are confronted with seemingly intractable disagreement. While we’re saying some dissent is a good thing, it can’t engulf the company. So we’ll show you how to navigate the problem. One vexing issue facing many companies is staff location and a growing trend to allow certain employees to work at home. We’ll look at the pros and cons of such arrangements. It’s my strong view that it doesn’t work. While there might be obvious cost savings, it’s the corridor moment that is taken away from corporate life – that waiting-for-the-lift conversation that could result in a new idea or a change of strategy. You can’t find those magic moments of business inspiration when your planning or marketing director is sitting in his shorts at home, one eye on the spread sheet and the other on the test match. C Jeremy Maggs Editor @maggsonmedia

Leadership

Focusing on the ‘Big Picture’ Rodney Weidemann

Why is visionary thinking so important to the longterm survival of any organisation? In this article, we explore the role of visionary board members, and why it is so critical to have individuals that are capable of seeing the ‘big picture’.

eeping a large enterprise running and ensuring it remains successful is a role that ultimately falls on the shoulders of the board of directors, who are tasked with making sure the day-to-day operation of the business is geared towards achieving this goal. At the same time, true business success is not only crafted in the ‘here and now’; it is also built on the ability to focus more broadly on the potential impacts of key decisions and the way in which the future may play out. Therefore, it is just as critical for an organisation to have board members that are capable of seeing, understanding and communicating this ‘big picture’. The real question is, what form does such big-picture thinking take? Does success in this only require a strong leader and one or two people who can see the opportunities and understand what the market dynamics are? Or is it more a case that no member of a board of directors should be exempt from big-picture thinking, as the operational aspects of an organisation are the responsibility of its executives, all of whom should have specific functional capabilities?

Importance of the broad view “One of the key reasons to bring independent non-executive directors onto the board is for their bigger picture skills; it increases the breadth and depth of experience and provides access to specific skill sets,” says Richard Foster, immediate past chairman of the Institute of Directors SA (IoDSA) and an independent corporate governance consultant and professional non-executive director. “These are people that are particularly important in terms of input into the strategy of the company, and also provide an understanding of the broader environment in which the company operates,” he says. Bonisile Makubalo, director of corporate affairs at SA Taxi agrees that every board needs specialists, both from within and from outside of its own industry. “This is chiefly to prevent tunnel vision when developing strategy. At the same time, there should never be a point at which only a few members of a board take the lead on strategy. Then, in my opinion, it’s not a strategy, but rather a coup.”

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Big-picture thinkers are responsible for asking the tough questions and making the decisions on how to approach them.

Andy Brauer, CTO at Business Connexion, suggests that in his experience, most board members tend to be short-term thinkers, of the type that have half- and full-year numbers in their minds. “This can be detrimental to the business, although there are companies – especially some in the financial services sector – that have big-picture thinkers in the right places. Those companies that find the correct mix will have a growing business and rising share prices, as well as the focus and the ability to execute a business-driven strategy,” adds Brauer. According to Walter van der Merwe, CEO of FedGroup Life, the only way for an organisation to remain current, competitive and agile is to ensure it has big-picture thinkers in its senior structures. “These players determine not only the business direction, but closely follow the industry and markets, to determine timing and alternate strategies. Perhaps equally important is their influence over the ethos and ethical direction of the business. Big-picture thinkers are responsible for asking the tough questions and making the decisions on how to approach them.” In other words, he states, their role is essential to any organisation, both in terms of its sustainability and its business practices. Critical qualities “Interpreting the big picture is, however, reliant on different people at different times. Board members have a range of skills sets and experience; this makes it appropriate for them, situation dependent, to step to the fore. The collective board members’ backgrounds and strengths will bring far greater value to the overall objective than the input of a single individual,” he says. Therefore, explains van der Merwe, at FedGroup, the qualifications of its board members range from engineering to accounting and actuarial sciences, to business administration. This, together with deep business experience, allows the board to remain grounded when considering the big picture. It is essential to constantly work toward sustainability. A solid grounding avoids ‘pie-in-the-sky’ dreams and ideals, which are neither achievable nor sustainable.

“Secondly, any change in a business will encounter resistance. Bigpicture thinkers, therefore, need immense persistence and resilience to overcome the daily resistance to change they will inevitably encounter. This takes courage and a deep-seated belief in the value to the organisation of the bigger picture. If they do not believe in the truth of the bigger picture, they will not have the resilience to succeed.” Makubalo suggests that from a purely practical point of view, directors are jointly and severally responsible for the oversight and sustainability of an organisation. “No director can, therefore, abdicate big-picture thinking. In a world in which the line between entrepreneurial and corporate managers has been obliterated, serious leaders cannot limit themselves to only one approach. Thus, every board member should be a functional specialist of some sort, so that he or she can contribute credible experience and leadership in a given discipline or industry.” “Beyond that, every board member should not only have the ability to take a broad and generalist view of the world, the industry and the business, but should also have had exposure to the broader issues that impact business today,” he states. Conflicts of interest Of course, in any business, there is the potential for more immediate business concerns to conflict with the potential bigger picture, although Makubalo believes that the only way such conflict can arise is if the board loses its strategic focus and involves itself in day-to-day operations. “If, as I have said, the board provides a strategy founded on the realities of the business, viewed from the perspective of a big picture that all board members are in agreement with, then the board’s job is done. It is then up to the executives to implement the strategy. This process provides a cushion for the executive team by enabling it to make decisions that will correctly propel the organisation into its ideal long-term situation.” BCX’s Brauer suggests that the example of Kodak makes for a good case-study in this regard. “When the digital camera arrived, it clearly threatened Kodak’s core business, but it was simply disregarded. Needless to say, the

Leadership company has since closed its doors. The message here is that what is core today may be out-dated next year, and driving such change – while it will inevitably create conflict – is necessary if a company is to continue being successful.” Van der Merwe points out that in this same vein, long-term concerns should always carry the most weight. Sometimes, a biggerpicture necessity results in a short-term situation that is less profitable than it otherwise might be, but it is worth it in the long run. “This is where privately-owned organisations differ considerably from listed companies. The latter are immediately answerable to shareholders who are generally not privy to, or do not share, the organisation’s big-picture vision. Thus, short-term sacrifices for longer-term sustainability and growth are often not possible.” Foster adds that a key mechanism to enhance longer-term thinking and drive the correct behaviour is a simple one: align the incentives for executives with the longer-term best interests of the company and attendant value-creation for all stakeholders. Harnessing expansive vision When it comes to harnessing the expansive vision of the company’s big-picture thinkers, continues van der Merwe, operations personnel can sometimes present a challenge. “Remember that operations people are focused on what they must deliver now, and how to best meet customer expectations. This is precisely what makes them effective, and it’s as it should be. However, this also means that they tend to resist the change that is needed to move the organisation toward its bigger-picture goal. Succeeding at this is down to the effectiveness and role of the board. After all, the board is responsible for translating the bigger picture into a viable and executable plan for the operational teams.” “Big-picture changes are, however, seldom sudden, so with the daily reaffirmation of attitudes and actions within the entire team, and having the right people in the right places who share the same

6 vision as the big-picture thinkers, such change can be managed. It should be expected that operational teams will resist anything deemed disruptive, so it should be easy enough to adequately manage this, thereby enabling the organisation’s future success to be realised,” he says. Makubalo adds that organisational vision is not a once-off thing and it is not static. It is, instead, cyclical, iterative and integrative. It is, he says, derived from the realistic operational initiatives of the business, which change constantly. And it is founded on a continuously adjusted view of the world at large. “Therefore, harnessing the big picture to operations should need no special effort. It is inherent in the proper governance of an organisation. The board pilots the plane according to the feedback that the executive team gives it about altitude, wind speed, and fuel levels. The board chooses the destination and gives the executive team its reasons. The executive team then uses its skill to ensure the organisation gets there,” he concludes. C Short- and long-term analysis The daily job of a director is to constantly be absorbing and analysing information about: • • • • • •

The organisation’s competitors Its immediate environmental status The impact on it of market dynamics The value contributed by customers and employees The attributes of the organisation’s products The threats and opportunities inherent in local and international regulatory frameworks.

All of this should then be projected against a five- or ten-year scenario that includes stakeholder expectations.

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Management

Changing organisations from the inside out Samantha Du Chenne

A few years ago, leaders who maintained a stable and controlled environment were considered to have done their job successfully. Today, with change being the only constant in the business world, a new leader has emerged – one who embraces change and no longer sees risk as a negative. This is a leader who seeks out and encourages a new type of employee – the intrapreneur – the business world’s new secret weapon.

efined as the act of behaving like an entrepreneur whilst in the employ of a large organisation, intrapreneurialism is a corporate management style that encourages accountability, risk taking and innovation amongst employees, and rewarding those qualities that are more commonly associated with entrepreneurs. Internal entrepreneurs Essentially, employees or intrapreneurs are almost like internal entrepreneurs - they follow the goals and objectives of the organisation whilst focusing on innovation and creativity

and transforming ideas into profit. It’s an ethos that exposes employees to the dynamic traits that define entrepreneurism: persisting until you achieve success, learning from your mistakes, conservation of resources and exposure to risk and accountability - all of which add to the potential of the organisation. Many large multinationals have been encouraging intrapreneurialism with excellent results: think companies the likes of HP and Intel. At 3M, employees are given the freedom to create their own projects and provided with funding for this purpose, whilst at Google, a certain amount of time is allotted to employees to spend on creative projects of their choice.

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It’s an ethos that exposes employees to the dynamic traits that define entrepreneurism: persisting until you achieve success, learning from your mistakes, conservation of resources and exposure to risk and accountability - all of which add to the potential of the organisation.

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Benefits the business and employee Current thinking is that the fostering of intrapreneurialism within an organisation benefits both the business and the employee. It fosters important characteristics such as self-motivation and proactive behaviour, as well as goal and action orientation. These are employees who must be encouraged to take risks and think laterally and are generally comfortable with taking the initiative. For them, it’s about enjoying all the benefits of being an entrepreneur, without incurring any personal risk, as the company absorbs any losses. Trawl the Internet for articles on the subject and you’ll find that the idea of intrapreneurs has become so popular that there is even a ‘League of Intrapreneurs’ that has been established, where a wealth of online information and blogs can be found - written by business legends the likes of Richard Branson - providing support and advice for anything from managing intrapreneurs to how to become one.

the freedom to try new ideas. Companies should encourage employees at every level to think about the needs of the business and to share their ideas on how they can best be met. Ultimately, creating a culture of intrapreneurs means making the most of every employee’s potential to create new ideas, products or services. That said, the business must be brave enough to create this culture – avoiding risk and maintaining the status quo are barriers to creativity and innovation. In the same way, the manner in which mistakes are handled is important too – errors should not be seen as a punishable offence but rather as a key to learn and move on from what went wrong. This does not mean that employees are not held accountable for their mistakes, but rather that they are dealt with in a way that encourages the type of learning that is needed for an organisation to grow, whilst fostering enthusiasm, passion and loyalty within the work force.

Change from the inside out Indeed, it was Branson who coined the term ‘social change agent’, pointing out that the intrapreneur has the power to change the organisation from the inside out, often for the good of the community at large. Essentially, intrapreneurs are motivated when given the space to do things differently, moving away from the ‘old’ applications that the business has depended on in the past, and given the freedom to find new, and better ways. These are people who have a passion for teamwork and the organisation, as well as their own roles within it. The intrapreneur is able to keep his eye on the larger agenda of his organisation, even whilst working on a smaller and more specific scale. He must be given access to the resources and capacities of the company in order to have a sustainable impact on the business.

A personal stake in the business The leaders who are best able to encourage intrapreneurship are those who are able to be both patient and flexible. Employees must have the confidence in their own abilities to find novel solutions to problems that will ultimately benefit the organisation as a whole. Indeed, in an environment where intrapreneurialism is encouraged, employees are found to relate better to the company and its products and services, simply because they have a personal stake in the business. They tend to take a more global view of the organisation, one that can only be achieved when employees have an individual interest in the company. One way to achieve this attitude amongst employees is to encourage each division to be run as if it was their own small business. This increases the sense of personal accomplishment felt by the individual that can only benefit the bottom line.

Freedom to try new ideas To this end, breaking silos and fostering teamwork across divisions is extremely beneficial, as is giving line managers

Encourage and motivate at all levels If there is a recipe for building the perfect intrapreneurial environment it would be along these lines: encourage and

Management

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...intrapreneurs are motivated when given the space to do things differently, moving away from the ‘old’ applications that the business has depended on in the past, and given the freedom to find new, and better ways.

support employees who display innovative and creative behaviour; sponsor brainstorming sessions and set time aside within the working day for these to take place; recruit candidates who come from an entrepreneurial background, and provide incentives for creative ideas. It’s important to encourage this behaviour at all levels of the organisation and not just amongst the senior staff. Sharing the financial data on how innovative ideas have shaped the bottom line is a great motivator, as is promoting staff who have been seen to take risks and learn from their mistakes. By redefining failure Intrapreneurialism in action Michelle Combrinck, MD at Zinto Marketing Group has embraced the idea of intrapreneurialism in her business by recruiting young performers with raw talent and providing them with the necessary skills and tools to kick-start their own personal brands and earn a living, whilst at the same time working together as part of a business team and learning business skills as entrepreneurs within the larger organisation at Zinto. Combrinck, who is passionate about creating employment opportunities amongst the youth of South Africa, points out that not everyone is an intrapreneur, and a good starting point is finding the right person for the job or, as she puts it, ‘putting the right bum in the right seat’. Individuals who flourish in an intrapreneurial business are those who have a positive attitude they’re generally adventurous, outspoken, confident, and enjoy working with others. Importantly, these are people who have the ability to understand the bigger picture and predict future trends. She adds that she is also fanatical about encouraging employees to study further. “You never know all there is to know; take every opportunity to upskill, and make sure you have the right skills set to serve you into the future.” “However, we need to take a step back and begin with the

and taking away its negative connotations, employees will be more inclined to take the kind of risks that could provide huge benefits for the organisation. It all starts at leadership level, however. It is the leaders of the organisation who have the ability to identify opportunities, direct the objectives of the organisation and communicate these to the rest of the business. It is leaders too, who can create a dynamic environment where change is welcomed, and ultimately, rewarded. question of how to build this spirit within a business,” she reports. “It all starts with the leadership team. After all, if you do not lead by example, how can you expect others to be motivated?” At Zinto, the team of leaders model positive behaviours such as self-motivation and discipline, innovation, idea generation, energy and pushing boundaries. There is a shared mindset amongst Zinto’s leadership where employees are told, ‘you don’t work for me, you work with me, you work for yourself ’, a mantra which fosters responsibility and accountability within the team. It’s an ethos whereby employees are told, ‘you, plus your talent/skills, are the job’, which encourages them to build their own brands, find out what it is that drives them, and develop integrity and self-respect. When it comes to managing and motivating the intrapreneur, focus is all-important. Individuals who are given a dedicated purpose are driven to generate the paybacks required to reach business goals. It requires employees to prioritise what actions to take and how to execute them. Focus allows for resources – no matter if they are limited – to be harnessed so that creative solutions can be developed. Ultimately, innovation drives creativity which in turn motivates employees to perform better and leads to increased productivity. C

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Director Dissent

The dissenting director: What to do when board disagreements cannot be resolved Donovan Jackson

Disagreements and differences of view at board level are inevitable and require careful handling for optimal outcomes. This article unpacks some insights from The Dissenting Director, a paper prepared by the IoDSAâ&#x20AC;&#x2122;s Corporate Governance Network (CGN) on the role of informed dissent and Boards.

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Dissent is inappropriate if aimed at avoiding risk in its totality. Dissent should, therefore, not be used to stifle innovation and business initiative. It is the final expression of a director’s personal opinion in the process of exercising his or her fiduciary duty.

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hile humanity is defined by its ability to achieve the seemingly impossible through collaboration and cooperation, concord and congenial relations are never guaranteed. Workplace disagreements on a personal level are one thing; disagreements at board level are quite another. And while no good board expects every member to assent to everything, there also comes a time where a director may fundamentally disagree with decisions taken. When this happens, there are repercussions for the board and for the individual concerned which necessitates careful handling for optimal outcomes. How these repercussions are resolved has a material impact on the ability of the company to continue operating effectively, notes a paper prepared by the CGN and titled ‘The Dissenting Director’. At the outset, the paper makes clear that disagreement and differences of view are not only inevitable, but should be encouraged in order for boards of directors to receive and assess various options available when making any decisions. It is for this reason that boards comprise a variety of skill sets. An optimal board Indeed, Tom Wixley, a director of listed companies Clover Industries and Fountainhead Property Trust and who has previously served as a director of organisations including Sasol and Anglo Platinum, explains that diversity is essential: “The optimal board will vary with the size and nature of the company. However, some generalisations can be made with reasonable confidence. For example, the effectiveness of a board is improved by including people of different genders, ages, races and personality types, with more than one of each variable,” he says. Furthermore, continues Wixley, while the skill sets required will vary with the nature of the business, “They will invariably include some expertise in finance and law as well as experience in running organisations, and the specific technical skills required by the business itself which will depend on the nature of that business.” Wixley says the optimal board is well equipped to handle a

variety of viewpoints. “Differences of opinion on important issues are desirable and should be encouraged by the members of the board, and the chairman in particular. Arguments should be discussed rationally, based on a full appraisal of the facts. On those occasions when one or more members of the board still disagree with the majority view after thorough discussion, care should be taken to ensure that they accept the bona fides of their colleagues, even if they disagree,” he says. In other words, in some instances, responsible directors may not fully agree with a decision or direction taken, but should have the maturity to accept well-presented, logical arguments which support that particular decision. After all, one facet of business is about taking risks in an unpredictable and competitive environment. Beyond disagreement Dissent goes beyond disagreement to the point where the director cannot reconcile himself with the direction taken. In his experience, says Wixley, points at which dissent may be fomented include major changes in strategic direction such as the introduction of new lines of business or the discontinuation of old lines ofbusiness as well asviewpoints on significant appointments to leadership positions. The CGN paper adds to that, noting that other inflection points for dissent can include fundamental issues such as fraudulent, reckless, grossly negligent or unlawful conduct. While the principles of good governance and ethics preclude such conduct, by no means does it mean this doesn’t happen in practice. The CGN paper goes on to state that when an issue crops up which may (or does) lead to dissent, it is important that the board debate should be conducted in such a way that the focus is on the issues involved and effect that they will have on the longterm benefit of the company. ‘The extent of disagreement may vary from a minor difference of opinion over an immaterial issue to a fundamental disagreement. The latter, if it is unresolved, may result in the formal dissent from a board decision by one or more directors’, adds the paper.

Director Dissent

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If the decision or direction agreed upon by the majority of the board is unacceptable to one or more member, those who dissent should ask that their votes against be recorded in the minutes of the meeting.

Constructive dissent? Dissent is indicative of a director (or directors) holding strong professional views on a situation or proposed course of action. The portfolio held by that director can influence this view; for example, a financial director who dissents on capital allocation would likely have good reason for his position and should that lead to dissent, it is arguably a justifiable position, which may or may not influence the direction ultimately taken. What the CGN paper makes clear is that dissent does not equate to disloyalty. Instead, it says, ‘[dissent is] rather an honest expression of a director’s responsibility to act in the best interest of the company. The knowledge by each director that other members of the board take their responsibilities seriously, creates a stronger, more effective monitoring unit’. The paper goes on to note the nature of business: risk-taking is an essential component of achieving objectives, and effective decision-making entails understanding risks and managing them appropriately. ‘Dissent is inappropriate if aimed at avoiding risk in its totality. Dissent should, therefore, not be used to stifle innovation and business initiative. It is the final expression of a director’s personal opinion in the process of exercising his or her fiduciary duty’, it notes. This, says the paper, is a situation of ‘constructive dissent’, that is, the director voices his or her view, but accedes to the broader wishes of the board. Wixley doesn’t believe dissent can be constructive. “I would not use the word constructive, but dissent may be a necessary step to take given the director’s obligation to act in the longterm best interests of the company, and his or her view of the consequences of that decision or direction,” he says. When dissent cannot be resolved As in many instances in life and business, things can eventually come to a head where the dissenting director cannot resolve his or her position with that of the board. When this happens, it doesn’t necessarily mean the director is compelled to resign through his own conscience, though this cannot be ruled out (see sidebar).

Wixley provides his view on such a scenario: “If the decision or direction agreed upon by the majority of the board is unacceptable to one or more member, those who dissent should ask that their votes against be recorded in the minutes of the meeting.” If the matter of disagreement is not fundamental to the strategic direction of the company, Wixley sees no issue with the dissenter electing to remain on the board. However, “If it is fundamental, he or she has little option but to resign as a director. In such a case it is typically appropriate to issue a statement to the members or shareholders of the company explaining the reasons for the resignation, as it is the members or shareholders who elected the director in the first place.” In a final word, Wixley says the dissenting director should take his or her actions with an appropriate mien: “In this position, the director should conduct himself with dignity and restraint and after taking legal or other advice.” C Guidelines for dissenting directors The CGN’s positioning paper, ‘The Dissenting Director’, provides clear guidelines for any director who finds him or herself unable to reconcile himself with a decision or direction taken by the board. Principle among those guidelines, says the director: • Should request formal recording of the dissenting view in the resolution of the meeting where the matter is discussed, which may include drafting and distributing a detailed memorandum of concerns to the other directors • Should obtain legal counsel on his or her course of action • May have no option but to resign from the board • Should consider issuing a statement to the board explaining his or her position together with his or her resignation • Should discuss and preferably agree with the board the nature of the public communication regarding the resignation.

Shareholder Value

Performance indicators for value creation Tim Anderson, Independent Consultant @tim_anderson2

In this article, Tim Anderson explores the concept of value and how it is created, measured and reported on, and also looks at some common pitfalls in establishing performance indicators that correlate with value and provides advice to boards on how to overcome them.

he primary reason for the existence of any organisation is to create value. This seemingly straightforward statement raises a number of questions: What is ‘value’? What drives it? How is it measured? What is the time frame? Who has a claim on the value created – shareholders, employees, customers, society at large? King principle 2.1(3) states: ‘The board’s paramount responsibility is the positive performance of the company in creating value. In doing so, it should appropriately consider the legitimate interests and expectations of all its

stakeholders’. This view is reinforced by the International Integrated Reporting Framework which states: ‘Providers of financial capital (debt and equity) are interested in the value an organisation creates for itself. They are also interested in the value an organisation creates for others when it affects the ability of the organisation to create value for itself ’. As will become clear in this article, value is typically expressed in both financial and nonfinancial terms and is measured over different time frames, with an emphasis on the longer term.

Shareholder Value

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These indicators are the foundation for performance management, incentive schemes that link pay to performance and reporting to stakeholders through the integrated report. All too often, however, these performance indicators seem designed, inadvertently, to destroy long-term value rather than create it.

There are many examples of profitable organisations that have had their existence threatened by putting immediate profits above all other considerations. BP’s cost-cutting measures on its oil rigs in the Gulf of Mexico caused an environmental disaster that resulted in billions of dollars of fines, damages and criminal charges. Nike’s use of sweatshops in Vietnam, Indonesia and other countries led to protests, hunger strikes and boycotts. The lesson that BP and Nike have learned is that a short-term and narrow focus on profits can create risks which may seriously harm an organisation.

2. Financial performance indicators derived solely from the income statement Profitability, whether measured as operating profit, net profit or EBITDA, is important but is only part of the story. In capitalintensive organisations, value is created by a combination of growth and a return on capital (expressed as ROCE – return on capital employed) that exceeds the cost of that capital (expressed as WACC – weighted average cost of capital). An organisation whose ROCE is greater than its WACC earns an economic profit as well as a financial profit. Economic profits are an important source of value creation, whereas financial profits alone may not be.

Typical problems in establishing value-creating performance indicators An organisation’s strategy is made tangible when expressed in the form of measureable performance indicators. These indicators are the foundation for performance management, incentive schemes that link pay to performance and reporting to stakeholders through the integrated report. All too often, however, these performance indicators seem designed, inadvertently, to destroy long-term value rather than create it. There are four common ways in which this happens. These are outlined below:

Return measures are particularly important in companies that use a lot of capital, whether fixed or working. These include mines and manufacturing or logistics organisations. Without a return measure, management may be tempted to treat capital as a ‘free’ resource and focus only on financial profits. Warren Buffett sums it up well: “References to EBITDA make us shudder – does management think the tooth fairy provides capital?” Successful organisations manage the balance sheet with the same rigour as they do the income statement.

1. Performance indicators that are too focused on the short term The Harvard Business Review notes that: ‘It is no accident that CEOs so often focus on short-term financial results. They have every incentive to do so. If they don’t make their quarterly or annual numbers, their compensation drops or their jobs are in jeopardy’. If a CEO’s bonus is based on short-term results, he or she may be unwilling to make investments that create longterm value if they reduce short-term profits. R&D, training, safety or maintenance are example of investments which may be foregone, with detrimental long-term effects. Boards and remuneration committees should take a longer-term view when approving performance indicators against which to measure corporate and executive performance. As noted in the King Codes: ‘Companies should adopt remuneration policies and practices for executives that create value for the company over the long term’. Sustainable value is not created in one year.

3. Performance indicators that are too financially oriented Financial indicators typically reflect past performance whereas non-financial indicators reflect how an organisation is preparing for the future. This statement makes three important points: first, that good financial performance in one year is no guarantee of good financial performance in the next; secondly, that the drivers of financial performance are often nonfinancial in nature, and thirdly that non-financial indicators are generally forward-looking. Non-financial indicators include items like: the efficiency of internal processes; the quality of customer and other stakeholder relationships; effective talent management; a positive organisational culture and strong values; effective leadership. These non-financial measures are the building blocks of future value creation and should be explicitly included in the organisation’s performance indicators. This, of course, is the essence of the Balanced Scorecard.

Organisations must accept that investing for the future may reduce short-term profits. This requires a robust consultative process with shareholders to ensure that they, the board and management share a common value-creating vision. 4. Sustainability factors omitted King III notes that: ‘Responsible leaders build sustainable businesses by having regard to the company’s economic, social and environmental impact on the community in which it operates’. This statement reflects the fact that organisations are corporate citizens that are granted a licence to operate by the stakeholders with whom they interact. No organisation that pollutes the environment, fails to develop its employees, or abuses its suppliers and customers can expect to thrive, regardless of how much money it is currently making. Nike was brought to its knees by the very customers who were buying its products because of its human rights abuses. Organisations throughout the world are starting to adopt sustainability measures as an integral part of their business strategies, since these are fundamental to their long-term growth and survival. Typical measures include: waste disposal, water usage, recycling, pollution and carbon footprint, human capital development initiatives, education and job creation, paying decent wages and enterprise development. Over time, organisations will be rewarded for these initiatives and their shareholders will benefit. For example, an HBR review of SABMiller’s sustainability initiatives and long-term shareholder return suggests a positive correlation between doing good and doing well. The board should identify the organisation’s key stakeholders and the factors that are both important to them and material to the organisation. Performance indicators should be developed around these and the board should hold management accountable for achieving them. Integrated Reporting The primary purpose of an integrated report is to explain to providers of financial capital how an organisation creates value over time. An important function of the board is to approve performance indicators that create value for the organisation and to describe these in the integrated report. These performance indicators may be financial (for example: revenues, profits and returns); non-financial (for example: measures for process improvement, customer relationships and employee skills development); sustainability (for example: water usage, carbon emissions and recycling). The Global Reporting Initiative (GRI) provides comprehensive guidance to organisations on what should be included in a sustainability report. Many countries require companies to report on their sustainability performance in addition to their financial performance. Whilst not a JSE requirement, most of the larger listed companies in South Africa produce integrated reports.

Implications for Boards and Directors The implications for company directors of the above issues are far reaching. Directors must understand the major sources of value creation for the organisation, ensure that the organisation’s strategy effectively captures these and hold management accountable for achieving them. These implications have added time and complexity to the job of non-executive directors and this requires that the recruitment, induction, evaluation and on-going development of directors should be rigorously undertaken. C Course on value creation and performance indicators What is value and how is it created? What performance indicators should be used to measure and manage value creation? What is the responsibility of directors in this regard? This practical half-day course has been designed to alert directors to the common pitfalls of poorly stated performance indicators and how to overcome them. Such pitfalls may include short-termism, an over-emphasis on financial indicators at the expense of non-financial indicators and an absence of sustainability indicators. Real-life examples will be given and delegates will have the opportunity to put the theory to practice through worked examples. An extensive reading list will be provided. The targeted delegates for this course are Remuneration Committee members who have the responsibility for recommending appropriate performance indicators and executive pay, and the whole Board which has the responsibility for approving them and reporting to shareholders. Key focus areas On completion of this course delegates will know how to: • Design value-creating performance indicators which are applicable to their company’s specific circumstances; • Apply the principles of the balanced scorecard; • Incorporate relevant sustainability indicators in the balanced scorecard; and, • Link executive incentives to the achievement of performance indicators. When: 31 October Visit the IoDSA website for future training dates.

Tim Anderson consults to public and private sector corporations on strategy development, value adding performance indicators, performance management, board evaluations and financial literacy for operating managers. He runs a course on executive remuneration for the IoDSA and is a member of their Remuneration Forum.

A View From

A view from… Anton van Wyk, PwC Anton van Wyk, Partner at PwC , was recently appointed as chairman of International Internal1. Auditors. He spoke to Directorship about his views on corporate governance.

Do you have a particular style of leadership? I have a very consultative leadership style. I include as many people as are relevant in strategy discussions and key decisionmaking. In today’s world of rapid change and global megatrends that are transforming the way we do business, diverse skills and knowledge are an imperative in arriving at the right decision. Recognition for specific input is also key in ensuring the right people are given credit where credit is due. From a business perspective, was there a single moment, or challenge, that defined your career? There are a few, such as moving to Johannesburg and getting to interact with top corporates and leaders in the so-called ‘engine room’, becoming more involved in work that gives a broader perspective on life outside the confines of my organisation, and my roles with the IIA (specifically my global roles) and the King Committee. A highlight would be working with one of our largest listed companies in the late 90s on their risk framework model, and seeing the potential of what an independently focused, strategically motivated view regarding their business and major concerns could do. My approach forced me to think very broadly and explore their current and future environment through interactive debates. Thinking risk and strategy that are ‘fit for the future’ became key to my personal success. Who are the business leaders who really catch your eye, and why? I believe business leaders who stand out are those who are bold in their decision-making, but understand the risk they take and have pragmatic mitigating actions in place to help manage it, and are prepared to be measured accordingly. There is great pressure on senior executives to deliver – but also great pressure in terms of not being excessively rewarded. Do you think we have achieved the right balance? Taking on a senior executive role comes with many years of experience and the honing of specific skills. Stand-out senior executives strive to continually improve the status quo through bold, appropriately managed change in approaches to business, growth and the risk they are willing to take. Stakeholders should show their appreciation for success and reward executives accordingly. They also need to appreciate the fact that short-term risk-taking does not necessarily realise short-term financial benefits and that long-term, pragmatic approaches often yield better results. However, risk taking for the sake of taking risk is reckless, and should be met with sanction on reward. The relationship between risk, its management, and the overall performance of the business needs to be well considered. A siloed approach to risk management has often failed to have a meaningful impact on an organisation’s overall performance. This, in turn, has affected how executives have been rewarded in the past – and many times, inappropriately so. The benefit of an appropriate relationship between risk and performance is giving an organisation

and its management the confidence and incentive to take ‘smart’ risks, rather than completely suppressing risk appetite and making executives overly risk averse. You recently received the Chartered Director (SA) designation. How does the designation enhance directorship as a profession? Every professional needs to operate at the highest level possible. Credibility and competence are key factors for all professionals, and acquiring the right level of qualification gives credence to the value they bring. With the search for well-qualified and experienced directors being an on-going challenge, the CD (SA) does a lot in giving the public a guarantee that the IoDSA means business in setting the appropriate high standards for our directors. It is a highly complementary post-graduate designation, as it adds to the arsenal of qualifications I believe are needed to guarantee the requisite level of expertise for being a good, skilled director. What is the value of the CD (SA) designation as a standard for measuring director competence? There is no doubt that a designation like the CD (SA), coupled with the amount of research that has gone into developing this qualification, will, with the right kind of application and measurement (CPD) process, be seen as the measure of success for directors in future. As the current Global Chairman of the Board of the Institute of Internal Auditors, the CD (SA) will also allow me to be internationally relevant by ensuring that I take my local lessons and combine them with my international experience. In your opinion, how does the CD (SA) designation further promote corporate governance in South Africa? I believe it will continue to keep us on the map and enhance the view that we here in South Africa are serious about governance, as we continue to show through King and other globally aligned initiatives. What are some of the new challenges in corporate governance? Corporate governance challenges will be with us as long as there is risk in doing business. Developments in good governance need to take account of what these challenges might be in future. Personally, I think we are doing quite well with this future outlook, and initiatives such as integrated thinking, oversight regarding IT risk and director compensation, and our concern for what global megatrends mean for governance will ensure we stay ahead of the curve. Can you link these to the challenges facing the country? As much as I think these are all universal, the one megatrend of rapid technological advancement with the accompanying impact of cyber attacks and the resultant massive risk we face in this new digital world has specific relevance for South Africa. We would be remiss not to assist directors with an appropriate framework to

help them in their oversight duties. This framework should include at least the following steps: 1. Overall assessment – Understand the role of IT and consider the value of the organisation’s digital assets. 2. Approach – Determine who owns IT oversight on the Board. 3. Prioritisation – Identify those IT subjects that are most relevant to the organisation (data security, mobile computing, privacy, social media, cloud services, etc.). 4. Strategy – Assess the impact of IT on the business’s strategy and the direction the organisation is taking regarding IT. 5. Risk – Determine how IT might create risk for the organisation. 6. Monitoring – Ensure that proper IT metrics are in place to allow for the evaluation of IT performance and ensure continued IT oversight. What opportunities face your industry? As consultants we need to bridge the value gap. Our survival is reliant on us being able to predict specific scenarios that would have a negative impact on business, and how these might be mitigated. The demands being placed on us to adapt to the ever-changing business environment are increasing exponentially, and our skills in assisting organisations to successfully manage their businesses today, whilst still creating the business of tomorrow, would need to leverage the use of real-time decision-making off multiple data sets. Are you a family person – and, if so, how do you balance the stresses of being a senior business leader with the pressures of family? I am. My wife, Sue, and I share our 30th anniversary next year; we have a son who is married and two daughters who are currently studying at university. My business leadership style extends to my family as well – I am as inclusive with them. We decide on everything together, and their support for me and my career has been instrumental in who I am today. What do you do to relax? I enjoy golf – it’s a wonderful leveller, but allows for great social interaction while spending quality time with friends and colleagues. Our family have a home on the coast in the Western Cape, and it’s one of those places you simply can’t get enough of, and all of us really can’t wait for the next visit – a seriously calming environment! What books are waiting to be read – either beside your bed or in your study? I’m busy reading the following business books: Building Better Boards (Nadler, Behan and Nadler), Our Iceberg is Melting (John Kotter), Boards that Deliver (Ram Charan). My interest in both the First and Second World Wars has held my attention for a number of years now. My intrigue with the two World Wars lies in the strategising, risk, and poor decision-making. I am busy reading All Hell Let Loose by Max Hastings. C

Leadership

Critical criteria for strategic leadership in highperforming companies Dr Lorraine Lear, Lear Consultants

Superior organisational performance is not a matter of luck. It is determined largely by the choices business leaders make. This article looks at some of the findings from studies undertaken on strategic leadership.

uperior organisational performance is determined directly by the choices its top leaders make. This is the finding of a study undertaken in top listed, high-performing companies in South Africa.

Strategic leadership is a key issue facing organisations in the 21st century and without doubt, one of the most critical issues facing organisations today. But, little empirical evidence has emerged on the effects of leadership at strategic level on organisational processes with distinct strategic importance.

Leadership and the competitive landscape In this competitive landscape, strategic leadership is increasingly becoming the main focus of both business and academia. The capability of a company to achieve or sustain a competitive advantage is greatly constrained without strategic leadership being the key focus. Does strategic leadership matter? According to what criteria? It most certainly does matter. It is only recently that the organisational behaviour scholars started to single out strategic leadership as a focus of attention despite the long history of research on leadership.

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Superior organisational performance is determined directly by the choices its top leaders make.

The significance of strategic leadership is clearly acknowledged. However, what criteria are critical for leadership success and how these criteria are manifested in the organisation has not been clearly defined. These questions gave rise to the objectives addressed in a study that was undertaken across a number of leading listed companies in South Africa.

term sustainability, and at the same time maintain its superior performance in the short-term. Top managers who wish to influence the future of their organisations should not rely on their hierarchical position alone, but they also need to possess relevant strategic leadership skills that appear critical to their power base.

The global economy has created a new competitive landscape. Events change constantly and unpredictably. Competition is complex, challenging and fraught with competitive opportunities and threats. In this rapidly changing world, strategic leaders face incredible pressures to deliver immediate results and do more with less. The pace and urgency of these ever increasing work pressures can make it difficult to keep up. Can leadership make an impact in this competitive landscape? It would seem that some leaders definitely do influence organisational performance.

Studies on strategic leadership Interest over the past ten years in strategic leadership has increased. A great deal has been written from a theoretical perspective, but no previous studies have actually attempted to establish the linkage between strategic leadership and organisation performance. Studies have researched the relationship between some of the critical components, for example, the impact of culture on performance and the impact of leadership on innovation.

Scope and role of strategic leadership The study of strategic leadership focuses on executives with the overall responsibility for an organisation and includes not only the titular head of the organisation but also members of the top management team. Through their leaders, organisations make strategic choices about the strategies they adopt to enhance their competitive advantage. The scope of strategic leadership is broad and complex which makes defining strategic leadership difficult. Supervisory leadership is concerned with leaders “in” organisations, whereas strategic leadership is about leadership “of ” organisations. The role of the strategic leader is fundamental to the success of organisations. Thus, identifying the criteria that leaders need to make their organisations successful greatly increases the possibility of leadership achieving this goal. It is the role of the strategic leader to influence others to voluntarily make day-to-day decisions that enhance the organisation’s long-

There are three such studies that have been undertaken in South Africa. These studies firstly examined the effect of the CEO on organisational performance and tracked the impact of turnover in CEOs on organisation performance as opposed to actual CEO effectiveness in managing the organisation. Secondly, they examined the impact of strategic leadership on the operational strategy and performance of business organisations, and thirdly, studied the role of strategic leadership in effective strategy implementation. The major limitation of these studies was that they were based on only the CEO’s response, in two of the studies, and the board of directors who have no executive responsibility in organisations, in the third. They were simple studies with responses from only one person in the organisation in two studies and a sample of up to five board members representing the organisation in the third study. No investigation was conducted within the organisation to verify and examine the responses or opinions of the leadership expressed in the study in any of the abovementioned studies.

Leadership

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The question then arises, given the high level of confidence top leaders have in their own performance, why is it that this does not result in superior organisational performance?

The study measured the relationship between strategic leadership and strategic alignment in order to determine the factors that influence organisational performance. Commitment to critical criteria The study analysed strategic leaders on six critical criteria examining strategic leadership’s focus on determining the organisation’s strategic direction, developing its human capital, exploiting and maintaining core competencies, sustaining an effective corporate culture, emphasising ethical practices and establishing strategic controls. The study then assessed alignment in the organisation across corresponding dimensions.

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The major contribution of this study is that it is the first empirical test of the relationships between strategic leadership and strategic alignment in high-performing organisations in South Africa.

The implications of the findings of this study show that in many companies top leadership have a much grander view of their performance than is reflected in the experience at organisational level by their employees. This finding is backed up by their ranking on the scale of top performing listed companies. Whereas where strategic leaders are focused on the critical criteria, their companies are closely aligned across the key dimensions translating into high performance of those companies. The study showed that there are critical criteria that are important for high performance in companies and strategic leadership is the determinant. What is most significant from these results is that strategic leadership can identify what they need to address to significantly improve their organisation’s performance. Does leadership matter? Most certainly the quality of individual leadership matters!

Whilst most top leaders viewed themselves as high performers in each of these critical criteria, alignment in the companies did not correlate with those responses in all of the companies. The question then arises, given the high level of confidence top leaders have in their own performance, why is it that this does not result in superior organisational performance? The best performing company showed the highest commitment to the critical criteria by its top leadership and, consequently, a very high degree of alignment. This corresponded with the highest ranking on the Financial Mail’s Best Performing Companies Index for the year in which the study was undertaken. On the opposite end of the scale, the poorest performing company showed a low commitment to the critical criteria, which was corroborated in a low level of alignment. This company ranked the lowest on the FM’s performance index at the time of assessment, of the companies participating in the study.

Dr Lorraine Lear is a Management Consultant specialising in strategy, strategic leadership and alignment, governance, reputation, communication and mentoring. Lear Consultants work with executive leadership and boards helping strategic leaders to be strategic leaders.

Help the IoDSA foster the next generation of business leaders. Refer aspiring directors today

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The Institute of Directors in Southern Africa (IoDSA) is committed to finding and developing South Africaâ&#x20AC;&#x2122;s future business leaders - and we need your help. We are opening limited aspects of our membership to high-calibre young professionals who are aspiring directors. If you know someone who would be eligible, help to kick-start their career by referring them to the IoDSA today. Why join the IoDSA? Enrich your business and your career as a director with our Director Development Programmes, forums and committees and the latest governance notifications and publications. Enjoy exclusive access to subscriptions and promotions. Harness the power of networking with peers. Be the first to know about board vacancies and have your board appraised by specialists. Better directors. Better boards. Better business.

Strategy

The working from home debate Lynette Dicey

For some, working in a home office offers flexibility, more time and more work productivity, whilst others need the structure and interaction that working in an office environment provides. We weigh up the pros and cons of working from home.

epending on your view, working from home might present a horde of temptations curbing your ability to get any work done – or it might be the perfect setup, offering flexibility, an absence of office politics, and a chance to concentrate on what you’re doing without interruptions from colleagues. Certainly, more and more companies are investigating remote working as an option for employees. For example, Synaq, a provider of business-class cloud-based messaging and communication services has done just that, with outstanding results. According to marketing manager Samantha Kaaber, “We’ve seen a massive improvement in our team members’ morale and decrease in stress levels. We’ve also noticed an increase in our team’s ability to focus on projects without interruption, thus delivering a higher quality of work in a shorter time. And there has been better communication and ownership of roles.” Of course, not everyone is suited to this type of work environment – which is why Reputation Matters, a virtual communications firm with ‘offices’ in the Western Cape and Johannesburg, is rigorous when it comes to recruitment. Account

director Lisa Sharland says that to work from home successfully, you need a particular disposition and personality type, one that doesn’t crave social interaction. Strict procedures and protocols That’s not the only challenge remote workers face. “It’s important to ensure that workers still feel that they are part of a team and that they share the company culture,” says Kaaber. The best way of doing this is to maintain contact. Sharland, for example, holds regular meetings in Google Hangout. Reputation Matters further ensures that all documentation is stored in the cloud and can, therefore, be accessed by all employees. The company also has strict procedures and protocols in place, so that whether it’s setting up an interview or meeting, or drafting a press release, there is never any doubt about what action should be taken. Shift in mindset Kaaber admits that remote working requires a shift in mindset, because managers need to feel comfortable with empowering the

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The key to managing a mobile team lies in people management, rather than task management. Team members need to know that they are trusted to take the initiative when they cannot check in with a manager

team to manage their own time. Juanita Vorster, owner of At That Point, a PR consultancy that works with a team of home-based freelancers as well as employees who spend only three days each week in the office, agrees. “The key to managing a mobile team lies in people management, rather than task management. Team members need to know that they are trusted to take the initiative when they cannot check in with a manager.” Then again, anyone not performing is soon identified by their own output levels and their availability to other team members, Kaaber says – plus, the model offers advantages that outweigh this potential stumbling block, such as being able to source and retain skills outside of the company’s geographical location. Then there are the cost-savings benefits that come with eschewing office overheads. Saving time, greater productivity That’s not the only saving to be made – time is also in greater supply, says Melissa Verhave, owner of Melissa Verhave PR. It’s not only the extra minutes in the day, thanks to the absence of a commute, but people who work from home are less likely to be disturbed by colleagues popping in for a question or a quick chat, and because it takes more effort to schedule a meeting, there are less of these. The result? Greater productivity. Godfrey Madanhire, whose Dreamworld Productions offers motivational speaking, seminars and workshops, admits that the home office can, at times, present a double-edged sword: with the TV room lounge just around the corner, temptation to sneak in ten minutes of the news can be strong. On the other hand, this can, in fact work, to your advantage, especially if you’ve been struck by a case of ‘I don’t feel like it’. Give yourself a short break, and you’ll feel refreshed and ready to tackle the challenge. It takes discipline to get this balance right, though. In fact, says Claire Minnaar, owner of Mammoth Digital, a Web agency, as well as several websites, discipline is the cornerstone of running a successful home office. Her suggestion is to create a to-do list that lists not only the tasks to be completed, but also how many hours you have allotted to each. If you’re finding time management a struggle, look online for free tools that can help you track your time.

Social interaction and staying connected Something else to watch out for, she adds, is that you may become a recluse. Without the need to go to meetings, you may well fall out of the habit of chatting to people. On the flipside, says Verhave, you might miss the daily interaction with colleagues that office workers so take for granted, but which can truly brighten up your day. She has overcome this particular challenge by setting up a ‘coffice’ (working at a coffee shop) or arranging brainstorming sessions with other freelancers, to bounce ideas off each other. “Finding time to network and stay connected to other people in your industry is vital,” she maintains. The emphasis here is that during the workday, any time spent socialising must be with your colleagues or industry peers – be wary of friends who know that you are home so invite themselves for a cup of tea, or family members who ask you to fit household chores into your schedule. One way of getting around this is by clearly defining your hours, says Madanhire. “Just because you’re at home doesn’t mean you shouldn’t try to establish some sort of regime. Being able to switch off “By the same token, when your work hours are completed for the day, you need to switch off your work mindset.” With all your office equipment in the next room, it can be easy to switch on that laptop if there is a work problem that’s bothering you, but Madanhire warns that throwing yourself into extra work ‘after hours’ is just as detrimental as staying away from home for long hours. If you worked in an office, you wouldn’t welcome family members into the space – so be just as vigilant in your home office. Of course, sometimes your very best efforts in this area can fail – and this is when it becomes clear that working from home isn’t for everyone. Tracy Horwitz, a writer, says that she simply couldn’t galvanise herself to get behind her laptop, even when urgent deadlines were pressing in on her. “Working from home may be ideal for some, but without instruction from someone in authority, I tend to flounder. The structure of an office suits me far better,” she admits.

Strategy

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Working from home may be ideal for some, but without instruction from someone in authority, I tend to flounder. The structure of an office suits me far better,

Meanwhile, Kerrin Cocks, also a writer, found it difficult to balance the demands of work and home. She acknowledges that most people view working from home as a vehicle to balance their lives better, but in her situation, it became a battle to complete a full day’s work in the few hours that her children were at school, before chaos descended. Tips from an expert • Kate Emmerson, a productivity expert, suggests the following to keep your productivity on track: • Don’t forget that this is a real job, as important as any that requires dressing with a suit and tie. • Set clear boundaries around work time and family time. • Create a delineated office space. It’s easier to adopt a professional attitude (not to mention shut out talkative family members) when you are working from a proper office rather than at the dining room table or on the couch. Make it an inviting space; for example, create an inspiration board. If your office is comfortable to be in, you’ll enjoy working there.

Would working from home work for you? If you’re a self-starter with excellent time management skills, probably. If not, you might find you’re more productive in an office environment. C

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Dress appropriately. Although many people consider working in your pyjamas to be one of the perks of working from home, Emmerson believes that dressing as you would for the office – even putting on makeup – boosts productivity. • Create rules for your family so that they understand they may not disturb you between certain hours. • Set tighter, earlier deadlines for yourself to ensure you remain on track. Stick to these deadlines – don’t be tempted to ask for extensions. • If you feel isolated, set up an external support system. Check in with the office, or get a work coach. For more information or advice, visit www.kate-emmerson.com.

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How to use your Company Secretary as a valuable asset Larey van der Westhuizen, Managing Director, Statucor and accountability, the role of the company secretary has become increasingly outwardly focused, incorporating investor engagement, stakeholder relations and corporate communications. The company secretary ought to demonstrate accountability, transparency, maintain independence and know firsthand how company decisions have been reached. The recent research paper ‘The Company Secretary: Building Trust Through Governance’, issued by the United Kingdom’s Institute of Chartered Secretaries and Administrators (ICSA) and the Henley Business School, shows how much of a valued and unique function the company secretary is, and further highlights that secretaries feel their roles are misunderstood and often improperly utilised. To properly benefit from such a strategic player in the organisation, executives and board members should ensure they utilise and develop the company secretary’s insights, skills and knowledge. These days, the most efficient secretary comes armed with a strategic toolset and personable qualities such as crafting of relations and a deeper understanding of the purpose of the organisation. Good company secretaries are flexible in scope and possess a vast range of skills. Being the guarantor of continuity, they know the company and understand that good corporate governance results in investor confidence. As an appointed official of the company, it is critical for executives to utilise the specialised skills of the company secretary to assist them in making the right decisions. With company secretary’s involvement in and access to information from across the organisation, their ability to mitigate risks of the board and their in depth understanding of stakeholder relations, a good company secretary enables deliverance on strategic and organisational objectives. It is up to the organisation’s chairman, executives and board members to recognise and utilise the real value of such an asset. With 25 years’ experience in its field of practice, Statucor understands statutory and governance requirements and adds value by assisting and advising boards, empowering them to realise their full potential as business leaders. C

he company secretary is an indispensible asset to any large corporation. Not only do company secretaries make a significant contribution to the board’s performance, enable effective decision-making and deliver strategic leadership, they link the non-executive and executive teams and align the interests of the company with the functions of the board. The role of company secretary is much more than a clerical administrative function. With the introduction of the King reports, new legislation and a sharp focus on transparency

Established in 1989 and with a national footprint, Statucor is a leader in providing outsourced company secretaries. Statucor’s full company secretarial service offering provides peace of mind to directors by ensuring compliance with all statutory obligations, freeing your management team to focus on driving your business forward. Statucor’s competitive advantage lies in our unique relationships with clients and our drive to exceed expectations by committing to superior, personalised, focused and efficient service. Larey van der Westhuizen: info@statucor.co.za +27 (0) 10 060 5500 www.statucor.co.za

Board Performance

Challenges facing publicsector boards Parmi Natesan, Executive: Centre for Corporate Governance, IoDSA @parminatesan

The IoDSA recently undertook a benchmarking study on the performance of boards, from both the public and private sector. This article provides some insights into the state of South Africaâ&#x20AC;&#x2122;s public sector, from a governance perspective.

ublic-sector boards continue to underperform boards in the private sector, according to benchmarking data from the Institute of Directors in Southern Africa (IoDSA). The IoDSAâ&#x20AC;&#x2122;s data is aggregated from the 118 formal, independently facilitated board self-appraisals that it conducted from 2009 to 2013, of which 63% were public sector entities. Whilst this aggregated quantitative data shows that the public sector scores just slightly lower than the private sector in all performance areas, qualitative data gathered during our interviews with the members who serve on these public sector boards, indicates a number of common challenges that publicsector boards face: Nominations process Having board members with the right mix of skills and experience is the biggest single contributor to board performance. However, even when a nominations process exists, public-sector boards are ultimately selected by a single personâ&#x20AC;&#x201D;the responsible minister.

It is important for the shareholder to consult with the existing boards to determine the knowledge, skills and experience needed before making these appointments. Without such consultation, leadership appointments run the risk of being ineffective and perceived as political appointments. Board-specific experience and skills Public-sector boards are often unclear about their specific duties and obligations. This may in part be due to the flaws in the nomination process noted above. Another contributing factor could be the plethora of legislative and governance requirements to which public-sector entities must adhere. In the latter case, in-depth director training and prioritising the right agenda items becomes a vital. Incoming directors need to be familiarised with the entity and its industry properly via a formal process. In addition, ongoing director training should not be treated as a tick-box exercise, but rather an intentional process for honing the skills available to the board.

4.0

Average scores for all years per performance area by entity type

3.5 3.0 2.5 2.0 1.5 1.0 0.5 -

Board Composition

Board Responsibilities

Committees of the Board

Relationship with Shareholders and Stakeholders

Private Sector Role clarity A related challenge is that public-sector boards lack clarity on their role as regards their single shareholder, the government represented by a minister, and management. The board’s primary role of exercising oversight and ensuring governance can be compromised by undue deference to a single, assertive shareholder. Better communication between board, shareholder and management as well as clarification on roles would solve many of the problems encountered in this regard. System of rotation The practice of ‘rotating’ a large percentage of the board every few years — or when a new minister takes office or a crisis blows up — is not conducive to a healthy governance structure. Board members gain invaluable institutional knowledge and experience over time. Rotation of a large number of directors robs the company of all that experience at once. Rotating fewer members annually would mean better board continuity. This staggered form of director rotation aims to retain valuable skills, maintain continuity of knowledge and experience, whilst also introducing people with new ideas and expertise. Board committees Public sector boards need to be much more realistic about the number of committees they constitute, how large each committee is, and who committee members are. Committee members must have specific knowledge, skills and experience in order to effectively fulfil their function. Equally, committees should not have too many members. If three-quarters of the board wants to sit on a particular committee, then it’s worth just covering that business at board level. Another challenge is the sheer number of committees: some public-sector boards have more committees than they have members. On the flipside, some boards are too small to make any committees viable. The latter might consider meeting more frequently, with different themes for each meeting. On a more general note, it’s important that board committees maintain a strategic and oversight focus, rather than an operational one.

Relationship with Management

Board Meetings

Overall average score

Public Sector Relationship with management In a typical governance structure, the senior executives would be appointed by the board and would, therefore, feel accountable to the board. Another (perhaps unintended) consequence of the nominations process in the public sector, is that some senior executives consider themselves accountable to the minister rather than to the board, as the minister plays a large role in their appointment. Regardless of who appoints them, senior executives must be held accountable by the board. This is a fundamental principle of good governance that needs to be overtly endorsed by the shareholder, and practised by the board. As a result of this unclear reporting line, CEO succession planning also receives too little attention in the public sector. Board administration and chairing The IoDSA’s data shows that while board meetings score higher than the other performance areas, interviews with the public sector directors reveal a somewhat different picture. At the administrative level, board packs are often delivered late, meaning that board members cannot prepare properly for meetings. Often, too, board meetings are simply transcribed, whereas proper minute-taking would be more useful, and agendas are often overlong. Another challenge is the quality of public sector board chairs, whose skills are vital in ensuring that board meetings are productive. Interviews revealed that too many public-sector boards get side-tracked into operational matters, and issues are discussed at both committee and board level. Other problems include board resolutions not being implemented, or previous discussions rehashed — often with the result that existing resolutions are overturned. Global experience in the private sector has established that corporate performance is strongly impacted by board performance. As the IoDSA’s benchmarking data shows, South Africa’s public sector lags behind the private sector in this area. C

Tax Avoidance

Tax avoidance and the Audit Committee Thingle Pather and Parmi Natesan

There is an increasing trend by both civil society and tax authorities in applying a moral and ethical re s p o n si b il it y to co m p a n ie s a ro u n d th e i r ta x obligations.

e have recently witnessed an increasing trend by both civil society and tax authorities in applying a moral and ethical responsibility to companies around their tax obligations. In some attempt to address tax avoidance, tax authorities around the world are entering into co-operation agreements to share tax-related information, e.g. FATCA is an agreement between the United States and South Africa, which requires foreign financial institutions to report information related to the ownership by U.S. persons of assets held overseas. Regardless of what measures are being put in place to address tax avoidance, the issue of deliberate tax avoidance, i.e. companies attempting to avoid tax through legal means, continues to come under the spotlight. Paying tax vs competitive growth On the one hand, since tax revenues are used by government to further the national interests of the country, it could be argued that companies, as good corporate citizens, should adopt an ethical approach to paying tax. On the other hand, shareholders legitimately require the companies in which they invest to remain competitive and produce sustainable growth and value. Boards should aspire to adopt an appropriate balance between satisfying these two needs: the expectations of shareholders and its fair and reasonable contribution to society. Where a company places itself on this spectrum is influenced by the respective attitudes of individual board members, the possibility of multiple tax jurisdictions, and the aspirations and attitudes of stakeholders. It is the harmonisation of these differing positions that constitutes the greatest challenge and risk in the governance of tax. Reputational risk From a reputational risk perspective, companies cannot afford to find themselves on the wrong end of the spectrum. The following

global examples illustrate the impact that this could have on a company’s reputation. Global coffee chain, Starbucks was reported to have made use of perfectly legal tax avoidance techniques and remained, on paper, unprofitable in the UK. When news of these tax-avoidance techniques was revealed, the company faced a barrage of criticism and a widespread boycott of the brand. Despite its continued insistence that it is loss-making in the UK, the company decided to pay the £20m corporation tax in an attempt to salvage its reputation in society. Another UK-based company, Google, employs almost 2000 people in the UK, the majority of whom negotiate advertising sales deals. But it books the transactions in Ireland, allowing it to minimise the tax it pays in the UK. This year, Domini Social Investments, registered investment adviser that specialises exclusively in socially responsible investing, filed a shareholder resolution to reform Google’s tax-avoidance strategy. The ever-increasing complexity of tax laws, the changing attitudes of both tax authorities and civil society, and the legitimate expectations of stakeholders make the proper governance of tax an imperative. Tax governance is vital As boards typically delegate the oversight of tax governance to the Audit Committee, below are some questions that the Audit Committee could consider in this regard: • What process does the company have in place for the escalation of tax risks to the Audit Committee? • Are there any unresolved tax queries? • How have the resolved tax queries been dealt with? • Has the risk register been updated for all the tax risks? • Is there a coherent comprehensive tax risk management framework setting out the entity’s tax risk philosophy?

Audit Committee Forum Position Paper 15

Guideline for the audit committee on tax governance Issue Date: December 2012

GOVERNANCE, RISK, COMPLIANCE & AUDIT SOFTWARE

RISK MANAGEMENT

In association with 1

Audit Committee ForumTM Position Paper 15

CMY

• • • • • • •

Does the entity clearly understand its own tax risk appetite and is there insight into how revenue authorities perceive its tax risk propensity? Has the board and audit committee transitioned from being reactive to proactive and from the back-end to the front-end in addressing tax risks? Can the top five tax risks be listed and are those risks being managed efficiently internally and/or externally with the necessary skill sets? Are proactive discussions undertaken with senior management and the Board to ensure efficient tax risk management? Is internal audit aligned to identify tax risk gaps as part of routine audit reviews? Is the revenue authority interface actively and constructively cultivated and are unwarranted perceptions rectified? Is there high-level direction available should tax controversy arise, or is the dispute process simply outsourced to external counsel?

An Audit Committee Forum paper entitled ‘Guideline for the Audit Committee on tax governance’ can be viewed on this link: http://www.acf.co.za/wp-content/themes/theme1603/downloads/ACF_Position_ paper_15.pdf . C Receive the latest ACF news and updates directly to your inbox. Subscribe at www.acf.co.za/contact/ In 2002, the IoDSA and KPMG established the Audit Committee Forum™ (ACF) to serve as a technical resource and sounding board for audit committee members and senior management. Our primary mission over the years has been, and continues to be, to communicate with audit committee members and share information relating to governance, risk management, auditing, accounting and financial reporting, current issues, future changes and international developments.

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IoDSA FAQs

Audit Committee assessment of finance function

1. Why should the Audit Committee assess the finance function? The assessment of the finance function by the Audit Committee is not required by legislation. However, since the legislated duties of the Audit Committee include oversight over the financial affairs of the company, it is implied that Audit Committees should satisfy themselves of the competence of the individuals involved in the finance function in order to place reliance on the information obtained from them. As a matter of best practice, King III recommends in Chapter 3, Principle 3 that: ‘The audit committee should satisfy itself of the expertise, resources and experience of the company’s finance function. Every year, the audit committee should consider and satisfy itself of the appropriateness of the expertise and adequacy of resources of the finance function and experience of the senior members of management responsible for the financial function…’ In addition to this, JSE listing requirements paragraph 3.84 states that ‘the audit committee must consider, on an annual basis, and satisfy itself of the appropriateness of the expertise and experience of the financial director, and the applicant issuer must confirm this by reporting to shareholders in its annual report that the audit committee has executed this responsibility’. 2. When should the Audit Committee assess the finance function? Following each financial year-end, the Audit Committee should perform an in-depth assessment of the finance function, as described below. Additional assessments could be performed in between these, as and when the Audit Committee considers it necessary. This may include, for example, where there has been a significant change in the staffing within the finance function or where the entity is going through a specific financial crisis. 3. How should the Audit Committee assess the finance function? This assessment could be performed via questionnaires being completed by each Audit Committee member, the significant results of which should be summarised and discussed at the following Audit Committee meeting. These questionnaires could also be completed by internal and external audit, executive management and any other individuals who work closely with the finance function. Alternatively, should the pre-completion of

a questionnaire not be feasible, an in-depth discussion could take place at an Audit Committee meeting, covering similar points to what would have been covered in the questionnaire. 4. What should the Audit Committee do with the results of this assessment? The Audit Committee should include brief commentary on the effectiveness of the finance function in its report to the shareholders, to be included in the annual financial statements. Having assessed the finance function and arrived at its conclusion, the Audit Committee should also use this outcome to influence its opinion on the effectiveness of financial reporting and financial controls. 5. What should the Audit Committee do if it is not satisfied with the competence of the finance function? • Following this assessment, should the Audit Committee feel that the finance function is not competent to effectively fulfil its duties, the Audit Committee should: • Identify the root cause of the problem, i.e. recruitment shortfall/control environment/organisational culture; • Inform the CEO; • Recommend training/coaching for the relevant members of the finance function in order to bring them up to the standard required; • Ensure that the findings are fed into the relevant individuals’ performance appraisal process, to be actioned and improved upon. Keep an eye on the IoDSA website for an upcoming guidance paper from the Public Sector Audit Committee Forum on the Audit Committee’s assessment of the finance function in the public sector environment, which can be tailored to suit other sectors. This paper will include a template questionnaire guideline to be used in assessing the finance function and the CFO. http://iodsa.site-ym.com/?page=ForumPSACF

Parmi Natesan, Executive: Centre for Corporate Governance, parmi@iodsa.co.za

Member profiles

Profiling Chartered Directors (South Africa)

he Chartered Director (South Africa) professional designation offered by the IoDSA was launched in May 2014. This aspirational title is awarded to professionals who successfully complete the four-phase assessment process that has been designed to assess the 20 competencies underpinning the IoDSA’s Director Competency Framework. By putting a face to the names of the current register of CD(SA)

delegates on the IoDSA CD(SA) National Register, we hope to raise awareness amongst aspiring and seasoned directors about the status and significance of this designation. There are currently 28 CD(SA)s listed on the IoDSA CD(SA) National Register (http://www.iodsa.co.za/?page=CDSARegister). Here we profile eleven of the designees.

Roy C Andersen Roy started his career at Ernst & Whinney Chartered Accountants in 1966, and subsequently became chairman of Ernst & Young. Thereafter, he went on to the JSE to serve as executive president and oversaw the restructuring of the JSE. He was subsequently chief executive officer of the Liberty Group. Roy has been the chairman of various companies, including Sanlam, Murray & Roberts Holdings and Virgin Active South

Africa over the years, and is currently a board member of Sasfin, Nampak and Aspen. He is a member of the King Committee on Corporate Governance. Roy qualified as a CA(SA) in 1972 and as a Certified Public Accountant (Texas) in 1975. He is Chief of Defence Reserves of the SANDF with the rank of Major General.

Tom Boardman Tom Boardman was Chief Executive of Nedbank Group Limited from December 2003 to February 2010. He was previously Chief Executive and an executive director of BoE Limited, one of South Africa’s leading private and investment banking companies which was acquired by Nedbank in 2002. He was the founding shareholder and Managing Director of retail housewares chain Boardmans which he sold to Pick ’n Pay in 1986. Prior to this he was Managing Director of Sam Newman Limited and worked for the Anglo American Corporation for three years. He served his articles at Deloitte. He is a

non-executive director of Nedbank Group, Woolworths Holdings, Royal Bafokeng Holdings and African Rainbow Minerals Limited. He is Chairman of a private equity company, Athena Capital; and, is also Chairman of a Mauritian-based financial services company, AFB, with operations in Ghana and Kenya. Tom has also been appointed as a non-executive director of Kinnevik, a listed Swedish Investment company. He is a director of The Peace Parks Foundation and is the Chairman of The David Rattray Foundation, and serves as a trustee on a number of other charitable foundations.

Judy Dlamini Dr Judy Dlamini is the Executive Chairman of Mbekani Investment Holdings Limited and Aspen Pharmacare Limited. She qualified as a medical doctor in 1985 from the University of Natal. She recently obtained a Doctorate in Business Leadership from UNISA where she investigated the intersection of race, gender and social class in women CEOs’ career progression and strategies for gender transformation at leadership level. One of the academic contributions from her research is the WHEEL Theoretical Model.

She founded Mbekani Group which has operations and investments in different sectors, including pharmaceuticals, facilities and property management, tourism, surgical instruments management, and luxury fashion retail. Previous board engagements include Discovery Holdings and Woolworths Holdings. She and her husband are the founders and trustees of Mkhiwa trust, a family public benefit organisation with a focus on rural development and education. She is married with two grown-up children.

Thulani Gcabashe Thulani began his career as a town and regional planner in 1982. After practising as a director with a firm of architects and town planners he joined Eskom in 1993. In 1999 he was promoted to the Eskom Management Board and the Electricity Council as Deputy Chief Executive and Chairman Eskom Enterprises. In 2000 he became the Chief Executive of Eskom, a position he served in until 30 April 2007. In 2008 he founded the BuiltAfrica Group, which develops renewable energy projects and consults

in energy efficiency. He has served as the Executive Chairman since inception. Thulani is a registered Town and Regional Planner (TRP (SA)), and holds a Masters in Urban & Regional Planning from Ball State University (USA) and a Bachelor of Arts degree from the University of Botswana. In 1995 he completed the Programme for Executive Development at IMD in Lausanne, Switzerland. He serves as the Chairman of Imperial Holdings, a director of the Standard Bank Group, the Chairman of MTN Zakhele, and a Director of the South African National Energy Association (SANEA).

Reuel J Khoza Dr Reuel Khoza is currently Chairman and major shareholder of Aka Capital (Pty) Limited; Chairman of Nedbank Limited, Nedbank Group, and founding Chairman of NEPAD Business Foundation. He is also a Director of Protea Hospitality Limited, Nampak Limited and Old Mutual plc. Currently he is a Fellow and President of the Institute of Directors in Southern Africa; former member of the Presidential Economic Advisory Panel (RSA); former member of the Honorary International Investment Council of Nigeria, and a member, past Director and patron of the Black

Management Forum (BMF). Qualifications include BA Honours (Psychology), University of the North (now University of Limpopo); MA Marketing Management, University of Lancaster, UK; Engineering Doctorate (Business), University of Warwick, UK; Professor Extraordinaire, University of Stellenbosch Business School where he also guestlectured in Business Strategy, Leadership and Corporate Governance; visiting Professor: Rhodes Investec Business School and in October 2007 Rhodes University conferred on him the honorary Doctorate of Laws honoris causa.

Mervyn E King S.C. Mervyn King is a Senior Counsel and former Judge of the Supreme Court of South Africa. He is Professor Extraordinaire at the University of South Africa on Corporate Citizenship, Honorary Professor at the University of Pretoria and Visiting Professor at Rhodes University. He has an honorary Doctor of Laws from the University of the Witwatersrand, is Chairman of the King Committee on Corporate Governance in South Africa, which produced King I, II and III, and First VicePresident of the Institute of Directors in Southern Africa. He is Chairman of the International Integrated Reporting Council (IIRC) in London, Chairman Emeritus

of the Global Reporting Initiative (GRI) in Amsterdam, a member of the Private Sector Advisory Group to the World Bank in Washington, and Chairman of the Asian Centre for Corporate Governance in Mumbai. He chaired the United Nations Committee on Governance and Oversight, was President of the Advertising Standards Authority for 15 years and the South African representative on the International Chamber of Commerce Court of Arbitration in Paris for nine years. He has been a Chairman, Director and Chief Executive of several companies listed on the London, Luxembourg and Johannesburg Stock Exchanges.

Mark J Lamberti Mark Lamberti is the Chief Executive Officer of Imperial Holdings Limited. He is a Non-Executive Director and Executive Committee member of Business Leadership South Africa, and a Trustee and Executive Committee Member of the National Education Collaborative Trust. Mark holds a Bachelor of Commerce degree (University of South Africa ’84), a Master of Business Administration (University of the Witwatersrand ’87) for which he completed a thesis on Retail Store Location. He is an alumnus of the Harvard Graduate School of Business

Administration where he completed the President’s Leadership Programme, and is a Chartered Director (SA). He is a member of the Institute of Directors and a past Honorary Vice-President of the Institute of Marketing Management (IMM). From 2008 until early 2014 Lamberti served as the Chief Executive Officer and subsequently Non-Executive Chairman of Transaction Capital Limited. Lamberti is the Founder of Massmart Holdings, where he served as its Chief Executive Officer from 1988 until 2007 and thereafter Non-Executive Chairman until early 2014.

Member profiles

Imogen N Mkhize Imogen Mkhize is an Independent NonExecutive Director of Mondi Limited. She was the Executive Chairman of The Zitek Group which she founded in 2000. Mkhize holds an MBA and a Bachelor of Science in Information Systems.

Wiseman Nkuhlu Wiseman Nkuhlu is the Chancellor of the University of Pretoria. He served as an Economic Advisor for President Thabo Mbeki from 2000 to 2004 and was chairman of the Board from 1993 to 2000. Nkhulu was the first black Chartered Accountant in South Africa.

Sizwe E Nxasana Sizwe Errol Nxasana, is Chief Executive Officer and Executive Director of FirstRand. He started his career at Unilever. In 1989 he established Sizwe & Co, the first blackowned audit practice in KwaZulu-Natal. In 1996 he became the founding partner of Nkonki Sizwe Ntsaluba, the first blackowned national firm of accountants. In 1998 he joined Telkom SA as Chief Executive Officer. Sizwe was elected Deputy President of Business Leadership SA in January 2014 and serves as Chairman on various Foundations and Trusts.

Gloria T. Serobe Gloria Serobe is a Founding Member and Executive Director of WIPHOLD, and Chief Executive Officer of Wipcapital. She serves on several Boards including Old Mutual, Nedbank, Hans Merensky and Sasol Mining. She is the Chairman of the Board of the Independent Ports Regulator.

IoDSA Events

African Corporate Governance Network meeting in Dar Es Salaam, Tanzania

he African Corporate Governance Network meeting and capacity building workshop, sponsored by the IFC, was held in Dar Es Salaam, Tanzania in July.

The Institutes that were represented include: Institute of Directors Tanzania (hosts), Institute of Directors in

Southern Africa, Mauritius Institute of Directors, Institute of Directors Kenya, Institute of Directors Zimbabwe, Institute of Directors Egypt, Institute of Directors Zambia and Institute of Directors Nigeria.

Lifestyle

Book reviews Überpreneurs How to Create Innovative Global Businesses and Transform Human Societies Peter Andrews and Fiona Wood Palgrave Macmillan, 2014

Virtual Freedom How to Work with Virtual Staff to Buy More Time, Become More Productive, and Build Your Dream Business Chris Ducker BenBella, 2014

In the face of overwhelming environmental, social, economic, medical and political challenges on a global scale, certain individuals emerge as heroes. These ‘überpreneurs’ tackle the world’s toughest problems and foment transformational change that positively affects thousands – if not millions – of people. Peter Andrews and Fiona Woods identify 36 such giants and tell their stories. The authors detail the characteristics these change-agents share and ask how society can foster similar leaders. The mini-biographies are engrossing, even if the authors don’t fulfil the promise of their subtitle (then again, transforming human society is a tall order). getAbstract recommends these personalized tales as a source of information and inspiration.

Businesspeople often seek to make their operations more virtual, migrating work online to save money, be more efficient, and free their time to strategize and build their companies. Going virtual can include hiring virtual assistants (VAs): capable, hardworking freelancers who often live in other countries – most notably, the Philippines. Finding, selecting, training and managing foreign, long-distance workers can be challenging. Most VAs speak a different language, live in a different culture and have different attitudes about work. Chris Ducker, known as the ‘Virtual CEO’, explains how to recruit and work with VAs. His knowledgeable manual offers useful guidelines, handy checklists and an extensive resources section. getAbstract recommends Ducker’s insights, pragmatic advice and easily applicable methods to the self-employed, small-business owners, start-ups, entrepreneurs and anyone considering employing an offshore VA. How Companies Profit by Solving Global Problems...Where Governments Cannot Alice Korngold Palgrave Macmillan, 2014

Pivot Points Five Decisions Every Successful Leader Must Make Julia Tang Peters John Wiley & Sons, Inc., 2014 Leadership development is a multibillion-dollar industry, yet genuine leaders remain in such short supply. Consultant Julia Tang Peters conducted in-depth interviews with five respected business leaders and did extensive leadership research with 500 more professionals. She determined that executives establish and validate their leadership by their attitude toward making decisions. Peters defines leaders based on the quality of their choices in five crucial decisions they make at career ‘pivot points’. Unfortunately, Peters is often repetitive and at times sounds like a cheerleader for the five leaders she spotlights. getAbstract nonetheless recommends her decision-based leadership model as a tool for leadership development, career analysis and self-guidance.

The biblical four horsemen of the apocalypse – famine, death, war and pestilence – ride today, and other apocalyptic global problems gallop with them: human rights abuses, resource destruction, refugee crises, climate change, inadequate health care and inferior education. Corporate social responsibility (CSR) consultant Alice Korngold discusses these daunting global troubles and concludes that multinational corporations – not governments or international nongovernmental organizations (NGOs) – can best address these staggering challenges. Korngold is a passionate yet practical idealist who has worked since the 1990s to help place top executives on the boards of NGOs. Whether companies do good for the sake of humanity or for sound public relations – or both – they are still doing good, nonetheless, and on a scale no other parties can match. Korngold provides essential reading for corporate executives – particularly at multinationals – as well as for CSR professionals, NGOs, students, investors and those interested in practical solutions to the world’s problems. getAbstract recommends her valuable report on how global firms tackle today’s woes, and how others can most effectively join them.

The IoDSA partners with getAbstract getAbstract is a service that summarises the most influential business books published throughout the world and is included as part of the IoDSA membership.

Essential business reading brought to you by the IoDSA from getAbstract.

To access your account, follow these steps: Log on at: www.getabstract.com/re/iod Username: Please use your email address provided to the IoDSA Password: Please use your IoDSA membership number

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Wine – An evening of three halves

Prawn tacos with a guacamole and carrot foam

Winemaker Ken Forrester, also known as Mr Chenin Blanc Jeremy and Sharon Sampson with winemaker Richard Rowe

n South African wine circles, mention the white grape variety Chenin Blanc and up pops the name Ken Forrester. So it was with great expectations the IoDSA hosted its second wine tasting evening with the man himself up close and showing off just why he is a legend in his own time. Ken explained how he had been a Joburg restaurateur, but then decided it would be good to own a wine farm, and then twentyone years ago bought the farm in an auction from the relics of the Masterbond debacle. In those days the farm produced fruit and the KWV acted as ‘regulator’ to the entire wine industry. A first step was to purloin the services of winemaker Martin Meinert, and so the rest is history as the relationship blossomed. But not without its difficulties, as much experimentation with new varietals was tried, sometimes taking a year or two before the team were satisfied with the results and so commercially available. Today the results speak for themselves – producing wines scoring well into the 90s, according to Robert Parker, is the ultimate accolade. The farm is located roughly halfway along the R44, the main road between Stellenbosch and Somerset West, on the southern slopes of the Helderberg. Visitors are very welcome, and some wines are only available at the cellar door, so well worth a stopover. Wine should rarely be tasted on its own, and the six wines had been expertly paired by Ken and The Culinary Workshop: • Ken Forrester Old Vine Chenin Blanc 2013 – Champagnepoached crayfish topped with a quail egg on a diamond puff pastry case enhanced by caper mayonnaise • Ken Forrester Roussanne 2012 – Prawn tacos with a guacamole and carrot foam • The FMC 2012 – Scallops crusted with fennel pollen, white balsamic and saffron vinaigrette • Ken Forrester Renegade 2010 – Roast duck and vermicelli noodle spring rolls with chilli jam • Ken Forrester Three Halves 2007 – Moroccan lamb kofta skewers

Ken Forrester sharing his stories and expertise in wine matters with IoDSA members •

The Gypsey 2010 – Slow-braised beef short rib topped with creamy Camembert on herbed crostini drizzled with chilli honey Everyone agreed the food pairing added another very agreeable dimension to the evening, apart from the fascinating vinous insights, lots of anecdotes and laughter. Ken recounted one instance when, at a top Manhattan hotel in New York City with three colleagues, ordering four glasses of ‘his’ FMC, and together with the gratuity, paying an eye-watering $200 (R2,000-00). Today one bottle of the iconic FMC at your favourite wine merchant would cost in the region of R380 per bottle, an indication of how affordable really good wine remains in the local market. One of the most exciting aspects of local wine is how the quality is improving in leaps and bounds, now at least matching many other global offerings. The range of new cultivars and blends on offer each year is mouth-watering and well worth exploring. However, as an aside it was apparent that many, especially smaller estates are under serious financial threat. Apart from labour issues, together with the unpredictability and ever-rising cost of electricity, the muscle exerted by retailers and other major players in the industry, is making life very challenging. They need our support. At the end of the evening we all appreciated we had just witnessed a masterclass in wine matters. The fact that no one rushed away said it all. And Ken remained hard at it for some time, mingling with all and sundry, never stopping the marketing of Ken Forrester Wines. How did the wine get its name Three Halves, and what does FMC stand for to those in the know? Give him a call. C The next wine tasting evening will be on 22 October 2014 featuring Haute Cabriere. Book now as seating is limited. Jeremy Sampson

How about a tequila? Jeremy Sampson

o you have a favourite drink? And perhaps that depends on the time of day. Or not! In response to a questionnaire to marketing directors a few years ago, monitoring the brands they used during the course of a normal day, one responded that he went to sleep with the taste of a single malt whisky in his mouth, and started the next day by draining the glass! Today we are so spoilt, the choice so wide, that to say tea, coffee, soft drink or water is already an over-simplification. There are times for me when a glass of cool water beats everything. When it comes to alcoholic beverages – again, the choice gets wider all the time. Only the other day I heard that the producers of SA’s most popular range of wines Four Cousins, were launching a wine-based RTD (ready-to-drink) named Five. Yet there are many who don’t drink any alcohol let alone wine. I have to admit that

in an evening, a good meal without wine is a lonely affair. And remember the Italian proverb: ‘Ages and glasses of wine should never be counted’. Talking of age, two of my five children had birthdays the other week. Apart from anything else, children are a great source of Œintelligence’ as I watch and listen to their experiences, allowing me to tap into just a little of what is going on in their lives and within their age segments. It continually reminds me that different generations make different choices. One daughter, in her late twenties decided to have a late afternoon garden party, on a fairly chilly highveld evening, with twenty or so friends. The Weber was very busy. Next morning, a Sunday, all was quiet as I decided to pick my way through the aftermath, carrying out a forensic audit, and see what had been the tipples of choice. Was there peer group pressure? It appeared spirits were the favourite, easily won by tequila, Jose Cuervo-Especial apparently paired with Appletiser, one bottle of Smirnoff Vodka, and another of Jameson’s Whiskey. Beer was well represented by Castle Lite and some Corona Extra. And a lone bottle of Savanna Dark. The choices of wine were particularly interesting as they were so diverse. Starting with bubbles, a Miss Molly from Moreson, (and good to see a sticker saying part of the proceeds were being donated to the SA Guide Dogs, not so happy about the weight of the bottle). And a Graham Beck Brut, always a favourite. Two bottles of white wine, a Chilean Sauvignon Blanc from Tierra Salvaje, and an unoaked Chardonnay from Waterside. One red - the very classy Springfield Whole Berry. What does this tell me? Now I realise that this is a sample of one and it is well known that the younger you are the sweeter the palate, a reason that SA’s Four Cousins and Australia’s Yellowtail are so popular among younger wine drinkers. But no brandy, let alone Coke, was a surprise, but then brandy consumption is in decline. It appears the fashionable young professionals are drinking quality across the board, choice is wide, and they are already becoming creatures of habit. Tequila is in. I recall one chilly evening in London a few years ago when four of us gathered around a bottle of port at Gordon’s Wine Bar, near Charing Cross, certainly an excellent way of warming the inner self. There are people of an age who would prefer a sherry, single malt or cognac, paired with a double espresso, and have never tasted tequila. Come to think of it, I have only drunk it when in Mexico. Looks like the marketers have a job to do as the choice remains so wide, and age segmentation influences choice. C

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Motoring

Audi hones A8’s character Wynter Murdoch

More powerful engines, new assistance systems and innovative Matrix LED headlight technology characterise upgrades to Audi’s flagship.

udi has given its A8 flagship a refreshing upgrade. Systematic lightweight construction, excellent comfort and a broad portfolio of high-end technologies coupled with engines that are more powerful yet more fuelefficient, provide the A8 range with increased levels of composure. On offer are diesel-fuelled derivatives in the form of the 3,0 TDI quattro and 4,2 TDI Quattro, available in standard and longwheelbase variants. They are joined by the petrol-fuelled, 4,0-litre S8 and the A8 W12 6,3-litre long-wheelbase version. A special security model will be offered later this year in both 4,0-litre petrol and W12 forms. The new A8 places Audi among the leaders for innovation in the luxury segment, especially when it comes to lightweight construction. The body is made almost entirely of aluminium and weighs just 231kg. Length (5 140mm), wheelbase (2 990mm), width (1 950mm) and height (1 460mm) remain unchanged from that of the superseded model’s. The A8 L gains 130mm in both length and wheelbase. Additional noise-damping measures reduce already low interior sound levels. The dynamic design of the Audi A8 is perceived to look more expressive than that of the superseded model. The bonnet, grille and front bumper feature sculptured lines, while the lower edge

of the headlight units has straightened. Xenon plus headlights are standard on all 3,0 TDI quattro and 4,2 TDI quattro models, with full LED headlights standard on the S8. Audi also offers optional headlights featuring Matrix LED technology, which company spokesmen claim set benchmarks with respect to design and technology. The high-beam comprises 25 individual light-emitting diodes per unit that dim automatically. The units are standard features on the A8 W12 L model. Extremely reactive and precise, the headlights incorporate intelligent cornering lights, new-look daytime running lights and dynamic turn signals. The system uses predictive route data from the navigation system to adjust the distribution of light in response to the real-time driving situation, even identifying curves in the road. The LED lamps at the rear are flatter than the predecessor’s. In all models except the S8, the redesigned bumper houses two rectangular tailpipes. New chrome strips and high-gloss black window frames round off the differentiating design details. Audi diesel-fuelled engines comprise the highly efficient 3,0 TDI V6 which produces 190kW and 580Nm, and the V8 configured 4,2 TDI which delivers 283kW and 850Nm. Both units are available in standard and long-wheelbase derivatives.

The petrol-fuelled S8, powered by an eight cylinder, 382kW engine, is available only in standard wheelbase form. The car has a claimed 0 to 100km/h acceleration time of 4,2 seconds. Paired with quattro all-wheel drive, its sonorous TFSI unit returns an average fuel consumption of 10,1 litres per 100 kilometres, corresponding to 235 grams of CO2 per kilometre. A Cylinder on Demand system, which deactivates four of the eight cylinders under partial load, plays a key role in the efficiency of the model, while an Active Noise Cancellation System (ANCS) uses precise anti-phase noise to compensate for intrusive sounds in the cabin while the unit is operating on four cylinders. Active engine mounts help to dampen vibration. The top-of-the-line model is the luxuriously equipped Audi A8 L W12 quattro. Its petrol engine is particularly short and lightweight thanks to its W layout. Displacing 6,3 litres, it produces 368kW and 625Nm of torque. According to Audi’s spokesmen, the model boasts best-in-class fuel consumption of 11,7 litres per 100 kilometres, corresponding to 270 grams of CO2 per kilometre. It also has the Cylinder on Demand system which, at low load, deactivates the fuel injection and ignition for six cylinders. As per the Audi S8, the ANCS ensures excellent acoustic comfort. All models are equipped with smooth-shifting, eight-speed tiptronic transmission paired with permanent all-wheel drive. Audi also offers an optional sport differential for the rear axle, which

distributes propulsion forces between the rear wheels as needed. The sport differential is standard in the S8 and the A8 4,2 TDI. The sedan owes its sporty character in large part to its sophisticated chassis. A drive select system, which varies the function of various technology modules, is standard. It also controls the adaptive air suspension – a standard feature – and adaptive damping. The interior of the car dazzles with its elegant lines and generous spaciousness. Each detail tends to document the hand-built character of the interior. Controls are clear and concise despite the abundance of functions. Assistance systems include adaptive cruise control, a Stop & Go function, and an expanded version of the standard Audi pre-sense basic safety system. A new, optional, head-up display projects important data in the driver’s field of vision on the windshield, while an optional night vision assistant can now also recognise animals on the road as well as pedestrians. Audi Connect – which includes a car phone – is available as a standard feature across the range. It uses an integrated UMTS module to connect the vehicle to the Internet. From a multimedia perspective, a rear seat entertainment system is standard on all long-wheelbase models and includes two LED displays, Bluetooth headphones and a DVD changer with separate hard drive for storing music and video files. C

PRICES AUDI A8 3,0 TDI quattro tiptronic 4,2 TDI quattro tiptronic 3,0 TDI LWB quattro tiptronic 4,2 TDI LWB quattro tiptronic

R1 101 500 R1 390 000 R1 257 500 R1 545 500

Prices are inclusive of Audi’s standard five-year/100 000km Freeway Plan.

Lifestyle

TRAVEL – 4 hours in Miami Travel - Four hours in Casablanca

Kate Kennedy

If you find yourself in Miami with a few hours spare, there are a number of interesting places to visit. Here are eight diverse locations in America’s sunshine state for you to explore. Jagur Ceviche Spoon Bar and Latam Grill Jaguar Ceviche Spoon Bar and Latam Grill fuels Miami’s flourishing Latin food scene with fresh cuisine inspired by the flavours of Latin America. Enjoy classic dishes such as Chupe de Camaron prepared by a well-trained kitchen staff, or one of their own creations with a more contemporary approach, for example, the ceviche spoon sampler.

Freedom Tower Visiting the Freedom Tower is like visiting a time capsule of the city. The Mediterraneanstyle tower, modelled after the Giralda tower in Seville, Spain, is part of Miami Dade College’s Wolfson Campus. Originally known as the Miami News Tower, the building was completed in 1925, as the headquarters for The Miami News newspaper. From 1925 to 1928, it was the tallest building in Florida. In 1962, the Tower became an impromptu processing centre for Cubans escaping Fidel Castro’s regime. Today, the tower houses the Miami Dade College Museum and Galleries of Art and Design, and serves as a memorial to Cuban political refugees as well as an educational and cultural centre. The building was designated a U.S. National Historic Landmark in 2008.

Vizcaya Museum and Gardens Originally built as a winter home for James Deering in the 1910s, Vizcaya was modelled after a centuries-old Italian villa. He bought a large number of European antiques, and the building was designed to make sure all of the treasures could be adequately accommodated. At the same time, Deering, a modern businessman, incorporated twentiethcentury building methods and technologies at Vizcaya, and established agricultural facilities significant to his background as a manufacturer of farm equipment. The mansion was turned into a museum 10 years after his death. It opened in 1935 as a privately-owned seasonal museum by Deering’s family. The opening was short-lived, as a hurricane blew through the estate damaging the building, and later, in 1945, 130 acres of the Vizcaya property, including the Lagoon Gardens, were given to Mercy Hospital and the Catholic Diocese of St Augustine. It was only in 1953 that the property opened as a museum, with tours by a volunteer group, the Vizcaya Volunteer Guides, offered a year later.

Everglades Alligator Farm South Florida consists of a vast swath of tropical wetlands known as the Everglades, with a sea of sawgrass marshes, which thrives on the shallow, slow-moving water that makes its way from Lake Okeechobee down to Florida Bay. It is complex system of interdependent ecosystems that include cypress swamps, the estuarine mangrove forests of the Ten Thousand Islands, tropical hardwood hammocks, pine rockland, and the marine environment of Florida Bay. The area supports a large collection of wildlife, including birds, fish, turtles and alligators, and is best explored by airboat. The Everglades Alligator Farm offers tours to anyone interested in getting a closer look at this ecosystem. A trip to the Everglades Alligator Farm includes a walking trail around the farm to view alligators, crocodiles, caimans and other wildlife, a display of local and exotic snakes, and informational wildlife shows every hour.

Coral Castle From 1923 to 1951, Latvianborn Edward Leedskalnin single-handedly carved over 1,100 tons of coral rock, as a monument to the fiancée who left him the day before they were to be married. Because he wouldn’t let anyone see him working, it was speculated that Leedskalnin possessed supernatural powers. When he ushered visitors around his sculpture garden and explained the significance of each piece, all he would say on the matter was that he knew the secrets used to build the ancient pyramids. Not only did he cut and transport huge blocks of limestone without any help from machines, he also spent three years moving the structures nearly 20 kilometres to their current location when he discovered the land nearby was destined for subdivision – Leedskalnin was a very private person and disliked the idea of having too many other people too close to his property. The stones are fastened together without mortar. Neither time nor a direct hit by Hurricane Andrew in 1992 shifted the stones. They fit together so well that no light filtered through the joints – a testimony to Leedskalnin’s skilful craftsmanship.

Wolfsonian-Florida International University The Wolfsonian was founded in 1986 to exhibit, document, and preserve the vast collection of objects of Mitchell Wolfson Junior’s collection. Located in the heart of the Art Deco District, the museum showcases American and European decorative and fine arts produced between 1885 and 1945. From propaganda posters to World’s Fair memorabilia, the array of objects offers a thought-provoking journey through the modern age. In 1997, the museum became a division of Florida International University, when Wolfson donated his collection and museum facility to the university. The Dynamo Museum Shop and Café is on the premises offer a selection of unconventional gifts, books and films inspired by the museum’s collection. The café has a sophisticated menu in a casual and artfully designed setting, also inspired by and reflecting the themes of the museum’s collection.

Bayside Marketplace If you’re into international cuisine, fine shops and exotic music in a beautiful, waterfront setting, this two-level, openair festival centre is the place for you. It features more than 150 shops, 12 restaurants and an international food court. Visitors can also enjoy lively performances from Miami’s local musicians, or hop on a refreshing cruise of Miami Bay. Sunshine and a dose of Latin flavour combine to make Bayside a feast for all the senses. Greenstreet Cafe This long-established popular corner restaurant offers hearty breakfast and all-day dining, as well as an outdoor lounge with red velvet sofas on the sidewalk, creating a unique street atmosphere. The restaurant was founded 24 years ago, by husband and wife team, Sylvano and Maida Bignon. Throughout the years, their European background has influenced the evolution of their restaurant into a lifestyle meeting place with a friendly atmosphere, at any time of day or night.

King Free

Ban the Monday meeting Jeremy Maggs

new movement is gathering pace around the world with frightening momentum – in fact, give it a few weeks and it could top the ridiculous ice bucket challenge. And as an aside, very quickly, make sure you have tight underwear should you embark on this activity. Unexpected solidified H₂O in the nether regions can have… well unexpected consequences. But back to the issue at hand – this new corporate crusade seeks to ban the dreaded Monday morning meeting as new research has established it is a complete waste of time where the only thing

that’s achieved is taking all the important decisions postponed from last week’s meeting and putting them forward until the following Monday; and then asking who’s going to go on a latte and cappuccino run before checking the diary to see how early you can gap it to an early Monday lunch. In fact, in the interests of strong corporate governance we were given full access to one such meeting at the well-known German processed-meats company, Rindfleischetikettierungsüberwachungsa Inc. C

Here are our notes: 8 a.m:

Meeting due to start, boardroom empty apart from Gladys the cleaning lady who’s reading the Daily Sun in the chairman’s seat.

8.10 a.m:

Gladys has moved on to a little light dusting, but no sign of Exco.

8.22 a.m:

Gladys takes a call from her bookie and places a bet on an uppity stallion called Juju, to win the 6th at Turfontein. Horst, the process manager arrives, looks puzzled and leaves.

9 a.m:

A full hour after the meeting was due to have started the rest of the Exco trickle in. Much gaiety and jocularity about the weekend and an earnest discussion about the upcoming company picnic.

9.23 a.m:

Adolf the CEO arrives and lights into team because someone has taken his parking bay.

10.07 a.m:

The parking crisis is still under discussion.

10.31 a.m:

And the debate goes on.

10.45 a.m:

And on.

11.07 a.m:

An executive decision is taken that the CEO’s parking bay will be cordoned off by orange cones and guarded 24 hours a day. Anyone using the bay will be summarily dismissed or sent to the Polokwane office.

11.15 a.m:

The CEO says he hasn’t time to engage with other items on the agenda which include a collapse of the IT system, a hostile takeover, a suspected case of Ebola on the factory floor, and a tanking share price, as he has an appointment to test-drive a new car. All items, he says, will be discussed next week.

8 23 a.m:

Horst bumps into Werner, the CFO, who makes a poor excuse about traffic lights and how he’s never late for work, feels terrible, and will report his tardiness to himself and take disciplinary action. Both agree to hang about and wait.

8.27 a.m:

Gladys decides to test-drive her new 200 horsepower turbo-boost vacuum cleaner which sounds like a McLaren F1 at full bore. Horst and Werner take cover in a cupboard.

8.45 a.m:

The carpet cleaning continues and her two hostages have found stale carrot and cinnamon muffins to stuff into their ears.

11.17 a.m:

The Exco gaps it.

Silence.

11.22 a.m:

Gladys slips into the boardroom to call her bookie to see if Juju won.

11.23 a.m:

She’s told he came in last.

8.59 a.m:

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