South Africa’s corporate governance framework has often been described as “ground-breaking” and “world class”. And on the surface, this seemed an apt descriptor.
The 2008 Act, and proposed amendments thereto, covers both the private sector and state-owned entities . One of the important express aims of the Companies Act of 2008 was to decriminalise company law, with the caveat being that anyone who signed “false or misleading” financial statements or prospectus, or acted recklessly in the conduct of a company’s business would be liable for a fine or 10 years’ imprisonment. Added to this arsenal of oversight is the King Code on Corporate Governance.
The 2008 Act also brought in the concept of social and ethics committees, which are intended to act as a company’s or SOE’s conscience. South Africa is awash with many instances of corporate malfeasance, both in the private sector and within SOEs, with boards and management at the heart of the rot. In the process, the concept of corporate governance has been unmasked as nothing more than a smoke screen.
Would management have had a right to veto all the dodgy Steinhoff deals that involved board members? Is it even conceivable for management to push back against an overly active board? In other words, what tools and recourse are at management’s disposal when boards go rogue or overstep their mandates? Furthermore, who is the final accounting authority? And what powers are at a board chair’s disposal versus those of a CEO? Who is the boss of whom?A director-general is the final accounting...
By way of example, look no further than the boardroom brawl between erstwhile SAA CEO Khaya Ngqula and the airline’s board. And the subsequent skirmishes between Dudu Myeni and the national carrier’s long roster of CEOs and other executives. Think about the governance lapses at Prasa and the fights that ensued between the passenger rail agency’s board and its former CEO.
PhillipXolisa Great article Xolisa. I don’t expect that everyone will process your frankness well, but it is spot on!
PhillipXolisa Great article Xolisa. I doubt everyone will process your frankness well, but it is spot on!
Lots of talk, hardly says much. Smacks of Socialist Agenda in needing more central control for government This is just a round about arguement for 'justification for a governmental method to pierce the Corporate Veil'. I do NOT believe this a answer to these few instances
People.....because people are involved. ...you know those things we like to say are fundamentally good.
The “BIG MAN SYNDROME “ is the biggest contributor to CORRUPTION in both Corporate and Public Sectors. Those who resist the corrupt practices from the BIG MAN and his CRONIES, are firstly marginalized and then gotten rid off with no legal protection...
Now, I'm not alone in my thinking. Live and direct
Only work when corruption, nepotism has been removed and real prosection of these Boards and there members are in place. Ideally government should scrape there stranglehold of the private sector by scraping the greatest pyramid scheme of the past 25 years that is BEE.
Suffers. Its a endless cycle of incompetence greed and lack of accountability that is destroying our business fabric. Which is then in return leading to sluggish growth. To combat this one can maybe follow the german model of codetermination (Mitbestimmung) but that initself will
King codes etc is nothing more than a guiding principle and a framework and non compliance and there is no real framework of real enforement as the respective boards are made up of people there out of personal interest. With strong moral or business etchics the business culture
The process is filled with corruption abd unetchical behavior but the company is blind to the process itself. This has a massive ripple effect as these boards are involved in driving the top management structure IE who gets employed etc.
You to recite case law pretty well but one obvious point that is being missed is the respective boards make up and how it came to be. Due to enforced governmental policy via BEE we have a scenario by which certain role players being selected due there political conections.