During my investment career I have always been perplexed by the make-up of most firm’s Board of Directors, from my coverage of U.S. stocks to global Stocks, from small cap to mega cap companies, from the buy side to the sell side. I have seen it all, and I have almost universally been disappointed. I have seen a medical doctor sit on the board of one the largest railroads in the U.S., management from top customers sitting on compensation committees, and active Fortune 100 CEO’s that also held three board of director positions. But like most investors, I have just noted the poor board make-up, and included it in the mosaic of information I use to make investment decision, because in reality most board memberships are poorly filled and there was little as investor I could do about it. Unfortunately, I did not think about it much, I did not ask why boards were so poorly filled.
Articles by our readers about integrity. Do you want to contribute to this category too? Please subscribe to be an author.
The chairman’s presentation at Diligent’s (DIL –NZX) 2013 AGM (June 23rd) included the following brief statement under the heading Strengthened Internal Controls: “The Board is currently undertaking a review of corporate governance matters with the assistance of an outside consultant, including with respect to the desired skill sets for the Board, share administration and other internal processes related to corporate governance.”
By Terrance M. Booysen (Director: CGF) and peer reviewed by Jayson Kent (Cowan-Harper-Madikizela Attorneys: Senior Associate)
In today’s fast-paced business environment, where time is of the essence, any manner in which processes can be streamlined, made more efficient, and concluded within a shorter time frame than previously possible, is generally met with positivity and appreciation. This is no less the case in the realm of dispute resolution, since parties to a failed agreement often find that there is hardly time to have a dispute, let alone resolve it. Increasingly the benefits of Alternative Dispute Resolution (‘ADR’) are being lauded over more traditional, litigious methods which most often start with contending and expensive lawyers, followed by complex, expensively drawn out legal processes. Juxtaposing the traditional approach of settling disputes first and formally through the courts, there are international calls for greater efficiencies in all aspects of the dispute resolution process. However, notwithstanding the benefits expected by ‘side-stepping’ the formal courtroom process, the success of ADR depends largely on negotiation, including the goodwill and collaboration of all the affected parties. If any of these elements are missing, then it is inevitable that the ADR process may be negatively impacted and even fail.
Johannesburg, South Africa
By Jene’ Palmer and reviewed by Terrance M. Booysen
We know that both local and international organisations are continuously having to adapt to operate in uncertain business environments. Locally, the release of the Preferential Procurement Regulations 2017, which places stronger emphasis on ‘radical transformation’, against the backdrop of persisting low economic growth rates are only some of the elements giving rise to further uncertainty. Internationally, the business and regulatory implications of the election of President Donald Trump and the vote in favour of Brexit and how these events will impact on local markets and businesses, is still unfolding. It therefore comes as no surprise that recent governance, risk and compliance (‘GRC’) surveys all indicate an increasing need to improve risk oversight and to balance opportunity management with risk management. The challenge lies in being able to achieve these objectives!
In light of new global trends and business imperatives, the need for diversity of experience,
background and perspective has become an important board mandate. Boards have
a responsibility to prepare for the future of their organizations and to take the strategic
actions necessary to meet shifting stakeholder demands and adapt to the rapidly changing
Article by Dr Dicky Els and Terrance M. Booysen
It is imperative that the impact of work-related stress and the negative impact of distress be incorporated into the organisation’s enterprise-wide risk management framework. A Bloomberg study conducted in 2013 revealed that South Africa is the second-most ‘stressed’ country out of a study of 74 countries. This is hardly surprising given the high prevalence of political instability, economic uncertainty, high unemployment and growing crime rates in South Africa. The recent cabinet reshuffle and the decision of Standard & Poor’s (S&P), including Fitch rating agencies to downgrade the country’s credit rating below investment grade to BB+ further exacerbates the political and economic uncertainty in South Africa.
By Terrance M. Booysen and reviewed by Osborne Molatudi (Partner: Hogan Lovells)
On a worldwide basis, criminal activity in the workplace — detected or undetected — is at an all-time high. Fraud, corruption and other forms of economic crimes are rife, and perceptions of increasing illicit behaviour are backed by reputable subject matter experts and research agencies, with alarming statistics. Research conducted by the Association of Certified Fraud Examiners (ACFE) show that workplace fraud has steadily increased between 2012 and 2016. In 2012, case studies showed that the median loss caused by workplace related occupational fraud was US$140,000. But by 2016, figures showed that the median loss caused by such cases had increased to US$150,000.
In many businesses where performance does not reach the desired targets you will have finger pointing. It is a natural reaction at all levels, there is always another person, department or group that is the reason why performance targets are not achieved. In my experience, when business performance is lacking the first place I start is at the top, the Board of Directors.
By Robert Davies (CGF: Lead Independent Consultant) and reviewed by Terrance M. Booysen
Saying or doing something racist, or performing various deeds which falls within a long list of things the Bill deems to be hate speech — or a hate crime — could see you ending up with a criminal record. It could also severely jeopardise your business, even if you had nothing to do with the original incident.
By Terrance M. Booysen and peer reviewed by David Loxton (Chief Executive Officer: Africa Forensics & Cyber)
Being able to speak the truth, without the fear of being intimidated or being politically incorrect is a liberty that sets a person free, both physically and psychologically. However, this attribute is increasingly more difficult to find in the leadership and structures of the ‘new’ democratic South Africa. This is ironic, in fact also bizarre and especially so in a country equipped with a Constitution that is considered to be one of the best in the world. But are the people of South Africa truly as liberated as they think they are, or are we slowly but surely sinking into the abyss of lower moral standards with most people too scared to speak out, and act decisively against the cancerous rot of corruption and unethical leadership?