(Fiduciary duties: The Institute of Directors in South Africa (IoDSA) has now made a firm commitment to holding Directors and their conduct to closer scrutiny. In such efforts, there is the intention of forming a “Stakeholder forum” and nominations were called for in July 2018. I agree that such a forum is long needed. In my submission to contributing to such a forum, the below is an extract…)
The impact and implications of clear failures of ethical, professional and fiduciary duties, are already upon us which has resulted in large losses in corporate entities and state-owned entities. It is also a clear demonstration that those governing those entities are not actively working to pursue long-term sustainable outcomes and are not looking for the best interest of the entities and all stakeholders.
Both in the state owned entity/public sector environment, as well as in the private sector environments including listed companies there has been a general apathy, and formalistic compliance to create a window-dressed image of the implementation of the principles of King IV.
State capture, Board capture and management capture are real!
This I have personally witnessed in Boards. I have at times been the single director dissenting decisions that are an abuse of process, even if the decision had been led and promoted by a Board Chairman. In many of the occasions independent legal advice later validated my opposition of the patently wrong decisions.
As a director (and chair) of some boards in SA and internationally, in both, as an executive and independent non-executive director, I have actively been vocal about the roles of directors and executives and their fiduciary and ethical duties.
I had also been appointed until recently for an almost two-year period, as an independent non-executive director of one of the largest state-owned entities in South Africa (approx R45-billion), Road Accident Fund.
I have actively seen, dissented and opposed, the abuse of IODSA membership and the CD(SA) designation by some members who used the same to validate their decisions, even when they were clearly unethical.
‘Comply and explain’ is a key feature of the King IV(TM) Principles.
Technical, and malicious “compliance” in boards are common place, and the “explain” portion rarely exists. This failure of this best practice too I have also opposed in my roles, as there is a personal integrity and ethic that is necessary when providing governance of an entity and it’s resources. The explanation/justification is as critical as the compliance in governance.
In sheer frustration and a willingness to share my experiences in recent years as I’ve actively been witness and in some cases a dissenting director, to the abuses of power, I have launched a podcast that is now available in SA and internationally. It is published via Google Podcasts, Soundcloud and my website. It has already been reviewed by many esteemed colleagues, and their invaluable feedback is contributing to the future episodes. I do humbly submit, that in listening to this almost hour-long introductory episode you will understand my passion and commitment to ethical and effective leadership, and the need to have courage to stand up against illegal, unlawful and unethical practices. Shared experiences Podcast
I submit that there is not only an escalation in public scrutiny but an active participation in public oversight, commentary and questioning of the integrity of the individuals involved in fiduciary functions, more especially board directors.
The time has come, where we, very much like the legal, healthcare and other professions directly hold our own colleagues to account, without fear or favour. As it stands there appears an impression in the public eye, and something that I shared some sentiments with, of a willingness to protect fellow directors, when there are clear violations and abuses of public funds.
The removal from office and/or the resignation of such directors is not enough. When the impact of their gross and/or negligent conduct results in every single citizen of this country feeling the impact and economic burden of increasing cost of living, increases in poverty, and food prices, then we need to do more.
I’m also actively involved in leadership development, and I’m a champion as I lead boards for Africa and internationally, for leadership development by leaders for leaders.
As a young, skilled and experienced professional I believe that we all should share in forums where inputs, and diversity of views can contribute to upholding the highest level of ethical conduct, and help create a sustainable future firstly for the country, and then for the profession.
In the spirit of Batho Pele and Ubuntu, it is the people who are our stakeholders first! Thuma Mina!