It is my firm belief that every employee, in an organisation, has a part to play in ensuring effective corporate governance. I have quite deliberately introduced the qualifier ‘good’ into this article. Effective corporate governance does not, in and of itself, mean good corporate governance; good may well be implicit, but I have decided to make it explicit and use the ‘shorthand’ Good Governance. The word ‘corporate’ can also be somewhat misleading and some people may, mistakenly, conclude that corporate governance is a matter for large institutions, or organisations; good governance applies to all institutions and organisations. In a recent (June 2015) survey on Corporate Governance, over 40% of respondents were from SME’s.
Article by Dr Dicky Els and Terrance M. Booysen
With the accelerated pace of global development, fuelled by South Africa’s socio-economic and political uncertainty, there are obvious knock-on business implications that increase business risks, not least of which includes dampening the mood for local investment. It is therefore not surprising to see many organisations downsizing, restructuring and even being forced to shrink their trading operations in the face of declining revenue and higher cost pressures. Since the 2007-2008 global financial market crisis, organisations are operating in turbulent markets and have to constantly adapt to increasing business uncertainty and changing circumstances. Whilst there may be numerous economic challenges the organisation’s leadership must deal with in order to remain a sustainable and profitable concern, they also have to be acutely aware of the manner in which these severe economic stressors impacts their workforce.
By Terrance M. Booysen and reviewed by Joanne Matisonn (Head of Corporate Governance: TMF Corporate Services).
It has been said that it is very difficult to accurately describe what exactly defines a good board of directors, and trying to find a scientific formulae for a so-called ‘perfect’ board is improbable. At the inception of the first round of appointing directors on the board, the shareholders will usually have a very good idea of the ideal group of directors which they believe will be best suited and qualified to start and direct the business. At this early stage of the organisation’s existence, the board will require unique people with the same vision as its founding shareholders, but have a diversity of thought and outlook to enrich the strategic process. As with most new business ventures, there’s usually a lot of risk — even levels of uncertainty regarding business success — and it is therefore critical that the board ensure they have the correct people who are capable of actually doing the work cut out for them. Indeed, the board must be capable of aligning the vision with a strategic path, whilst at the same time being acutely aware of the risks associated with the many business failures that are linked with start-up organisations.
By Terrance M. Booysen and reviewed by Megan Grindell (Director: Carter DGF Risk Management)
In today’s heightened times of public scrutiny and calls for ethical leaders, it’s not surprising that many concerned citizens have become far more demanding for good governance and transparency. Social media has been a major contributor to this call, such that a person’s privacy — including matters such as their social pleasures and behaviour — are broadcasted in seconds to almost any corner of the world. For example, if a work colleague is an avid user of Facebook or Twitter, it’s not too difficult finding out what that person’s likes and dislikes are, what gyms or sport clubs they attend and how often, right down to discovering their dream car or accommodation.
Article by Terrance M. Booysen and peer reviewed by Craig Rosewarne (CEO: Wolfpack Information Risk (Pty) Ltd)
It was estimated by ISACA — previously known as the Information Systems Audit and Control Association® — that there could be as much as 5.4 billion internet-based connected devices by the year 2020. And these estimates may even exceed their original projections as technology advances with its prolific and wide-spread adoption. Similarly, Cisco IBSG also predict billions of devices within the business-to-business use of the Internet of Things (IoT) where personal computers, smart phones and home devices, tablets, electronic wearables, medical devices, clinical systems, gaming systems and similar instruments will become more vulnerable to the security risks that lurk within the internet.
In our previous article dated 09 June 2016, BIA proposed a novel addition to the global investment lexicon by suggesting we add the term Vestor. According to BIA, the definition of a Vestor is “any person who has any personal stake in the outcomes produced by an organization.” A Vestor has a vested interest, synonymous with being a stakeholder.
1. LIFESTYLE AUDITS CURB ERRANT BEHAVIOUR
Article by Terrance M. Booysen and reviewed by Megan Grindell (Director: Carter DGF Risk Management)
In today’s heightened times of public scrutiny and calls for ethical leaders, it’s not surprising that many concerned citizens have become far more demanding for good governance and transparency. Social media has been a major contributor to this call, such that a person’s privacy — including matters such as their social pleasures and behaviour — are broadcasted in seconds to almost any corner of the world. For example, if a work colleague is an avid user of Facebook or Twitter, it’s not too difficult finding out what that person’s likes and dislikes are, what gyms or sport clubs they attend and how often, right down to discovering their dream car or accommodation. Read more…
By Terrance Mark Booysen and reviewed by Nicholas Hall (Associate: Michalsons Attorneys)
Last year there was a flurry of activity when it was reported that a well-known South African cell phone company closed its e-billing portal over an alleged security breach. Considering the potential that their customer’s billing information could have become exposed, the mobile operator was quick to respond. Soon thereafter the company implemented data encryption, together with customer identification login confirmation facilities. Then there was the case of the City of Johannesburg who reportedly had massive security flaws where allegedly it was possible for non-employees to read its customer’s billing information, furthermore gaining access to the customer’s name, account numbers and contact details.
At Boardroom INSIDER, I tend not to cover the world of academic research into corporate governance very often. Our emphasis is on the nuts and bolts of board operation, as opposed to concepts such as “agency theory” and reviews of the literature.
But this shouldn’t imply that the world’s academic researchers are not doing important spadework in uncovering how boards function, and how they can better perform their roles. One recent paper offers a bracing reality check on what’s right (and wrong) with our corporate board model. Steven Boivie, of Texas A&M University and a group of researchers have published a paper with the intriguing title “Are Boards Designed to Fail?”
With the recent findings of the Constitutional Court pertaining to the Nkandla matter, the subject of corporate governance has intensified and the topic has featured in media headlines, talk-shows and public debates across South Africa. Notwithstanding these recent events, have boards and their directors taken the issues attached to corporate governance seriously enough; particularly since the debacles attached to SAA, PRASA, Eskom, SABC and so many others which have been mired with alleged poor governance practices. And whilst there are endless regulations being passed — with yet another new set of governance recommendations being published through King IV — many organisations and their leadership continue their laissez-faire attitude with scant regard for good governance and accountability.