Corporate governance
June 29, 2010
Institute warns on succession plan for boards
Sanchia Temkin
Business Day
The Institute of Directors in Southern Africa warned business yesterday it would be irresponsible for them not to prepare for succession planning, particularly when the effect of losing a key leader in a company is considered. The recent air crash in the Republic of Congo that wiped out virtually the entire board of Australia’s Sundance Resources should serve as a reminder for companies to prepare for any eventuality that could result in a leadership vacuum, said the institute. “Companies seldom seriously consider the possibility of events such as this in their risk planning,” Ansie Ramalho, executive director of the institute’s centre for corporate governance, said yesterday.
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June 24, 2010
The Bottom Line
Nick Wilson
Business Day
Pending company laws that allow for directors to serve an indefinite term may sound fantastic for companies but are not necessarily good governance, warns the Institute of Directors in Southern Africa. There are a lot of interpretations of the independence of directors and a host of jurisdictions that differ on how long directors should sit on boards. In some countries, directors lose their independent status after serving for about nine to 12 years. In others, such as Switzerland, criteria for independence are left to companies to determine.
June 10, 2010
Margins, politics keep finance officers awake
Sanchia Temkin
Business Day
Margin pressures are the most significant risk factor that chief financial officers will encounter over the next year. Together with political uncertainty, this is keeping executives awake at night. These are some of the findings of the second chief financial officer survey recently issued by Deloitte. The Deloitte 2010 chief financial officer study covered the full industry, turnover and experience spectrum of 200 of SA’s top companies, including listed and unlisted entities in the private sector and major state-owned enterprises. “The 2010 chief financial officer survey highlighted the following significant risks:
May 28, 2010
SA ‘sunny place for shady people’ due to lack of compliance
Sanchia Temkin
Business Day
Among financial services companies there is a general absence of a culture of compliance with legislation governing the sector, and this needs to be addressed, according to compliance experts. Despite extensive legislation, SA had become a “sunny place for shady people” as the levels of crime and seeming absence of consequences from it had resulted in “greater levels of acceptance of all kinds of legal and moral transgressions”, said Ursula M’Crystal of consultancy group AML Solutions.
May 14, 2010
I’m in the chair; I’m OK
David Furlonger
Financial Mail
Questions remain about the ability of SA company chairmen to meet skills and performance standards set by the King report on corporate governance, says an international study. It says SA chairmen’s leadership skills and capacity for independent thought “require further investigation and scrutiny”. The study, “Chairman of the Board Research: a Survey of SA Directors” — which compares the performance of SA chairmen with those from the UK, Australia and Russia — is authored by academics from Cranfield University School of Management and Northampton Business School in the UK.
May 10, 2010
Directors facing closer scrutiny than ever
Sanchia Temkin
Business Day
The prestige of holding more than one nonexecutive directorship is being overshadowed by the greater personal vulnerability to which it exposes directors, particularly those who lack the requisite experience or time to fulfil their fiduciary duties to companies. New companies legislation and corporate governance principles are aimed at improving regulatory oversight and redress for shareholders and other stakeholders. “For the first time directors’ levels of responsibility have been legislated by the government,” says Michael Katz, chairman of corporate law advisers Edward Nathan Sonnenbergs.
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June 14, 2010
Small firms to get new accounting rules
Sanchia Temkin
Business Day
SA’s auditors and accountants are overwhelmingly in favour of a new accounting standards framework for the country’s more than 2-million small business units, according to a recent study carried out by the South African Institute of Chartered Accountants. The new accounting framework is intended to simplify the accounting process and reduce audit fees for the majority of small businesses. Ewald Müller, senior executive of standards at the institute, said at the weekend that the requirements of international financial reporting standards — contained in a document of 2850 pages — were onerous for most small businesses.
June 04, 2010
Encouraging litigation
Evan Pickworth
Financial Mail
When the new Companies Act comes into effect this year, company directors and officers face a heightened risk of litigation. They will also need to be more wary of what they say. The competition commission has broadened its focus to monitor practices that might lead to collusive agreements — such as sharing sensitive information between competitors . Increased shareholder activism and the extension of liability to a wider class of persons means SA is likely to follow the trend in the UK and Australia where there has been an increase in litigation against companies, their officers and directors.
May 25, 2010
Global crisis prompts new look at role of audit
Sanchia Temkin
Business Day
The role of the audit is under scrutiny in the wake of the unprecedented global financial upheaval of the past two years. Some countries have sought to minimise the audit and other financial reporting requirements for small businesses by way of raising the audit exemption threshold. Nicolaas van Wyk, technical and support executive of the Association of Chartered Certified Accountants, said yesterday: “The contribution that the audit makes to enhancing public confidence in the financial reporting supply chain of large, listed companies should not be underestimated.
May 13, 2010
Gordhan sparks brouhaha over executive pay
Sanchia Temkin
Business Day
South African executives do not receive “over-the-top” pay packages compared with their overseas counterparts, say corporate governance analysts. Executive compensation has come under fire again after Finance Minister Pravin Gordhan lashed out in Parliament this week at the generous pay packages of CEOs of large corporations and state-owned enterprises. He called for new parameters to be established. However, analysts are at loggerheads over the findings of a recent study by Philip Theunissen of Computus, which claimed that SA’s salaries “were out of control”.
May 03, 2010
Good corporate governance vital for SA firms in rest of Africa
Dianna Games
Business Day
Are South African companies damaging relationships with other African countries by not playing by the rules? This politically sensitive issue, which has dogged SA-rest of Africa ties for nearly two decades, came to the fore again last week with the release of a report by the Open Society of Southern Africa on the behaviour of South African miners in the region. A survey of selected companies operating in southern Africa found the practices of South African mining companies to be “appalling”.
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MORE ARTICLES:
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Directors who ignore King 3 do so at their own peril
April 30, 2010
Accounting chief warns on complex financial service standards
April 28, 2010
Big banks all in top 10 in new governance rankings
April 21, 2010
Proposed accounting model will have consequences for debtors’ books
April 13, 2010
Sustainability issues ‘will change business landscape’
April 06, 2010
Audit rule removal ‘a blemish on new act’
March 08, 2010
Reporting standards convergence ‘crucial’
March 08, 2010
Companies Act will cut out need for audits for small firms
February 26, 2010
Internal audit ‘an important driver of strategy’
February 23, 2010
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