Low risk, high reward for non-executive directors

Published Jan 22, 2014

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There are a few jobs for which specific and top-notch training is utterly essential; the shortlist of those jobs probably includes surgeon, engineer, airline pilot and – as the entire world realised on the day of Nelson Mandela’s memorial – sign language interpreter.

For most of the rest you can kind of wing it; a bit of general knowledge combined with a willingness to learn and work hard and most people could make a reasonable success of most work opportunities. It is, of course, unfortunate that so few companies are prepared these days to provide those work opportunities, but that is a subject for another day.

One of those jobs that you can apparently do without much specific training is that of non-executive director. Some reports indicate that a matric certificate, a willingness to learn and an ability to make friends with the right people are the main requirements for this position.

This would suggest that there is an enormous number of candidates available for the comparatively limited number of non-executive directorships that have to be filled in the country.

But apparently there isn’t. Those in the job of appointing non-executive directors say there is a skills shortage without specifying precisely what skills the gate-keepers deem to be in short supply.

No doubt it is because of this shortage and the fact that non-executive directors are now apparently facing all manner of risks that they have to be paid so generously. According to an excellent report just released by PwC, the median fee for a non-executive director is currently R276 000 a year, which is 14 percent up on the previous year. This is for a job that involves about 35 meetings a year and for which, despite all the talk of risks, there is little evidence of anyone being called to account.

Hybrid energy

The constrained South African electricity grid has dented industrial output every year since 2008 due to Eskom’s tendency to turn to big customers for help whenever it is struggling to meet power demand.

Industrial users needed a choice and soon they may be presented with the opportunity to even ditch Eskom as the solar industry is working on hybrid solutions that can power 60 percent of an industrial operation with maximum efficiency.

The solar photovoltaic (PV) industry’s innovation in PV hybrid systems, a generation method that integrates PV with thermal generation technology, is not only a step towards behavioural change to preserve the planet, but most importantly it is also a step towards cost reductions and reducing the reliance of energy-intensive users on diesel and electricity.

First Solar, the PV manufacturer that is engaging the local mining and manufacturing industries about adopting this technology, does acknowledge that one cannot get intensive users to completely use off-grid generation, but at least 60 percent of a mine’s operations could be powered by PV.

This means a mine that operates a 10 megawatt load can get maximum return from its PV installation if 6MW of that load is powered by PV generation.

Besides capacity, one other reason for this is that once more than 60 percent of an operation uses PV, the costs start increasing again as companies would have extra capacity that they cannot use at night when the sun is not shining.

PV hybrid can also be a viable replacement for combustion gas, depending on how high the gas prices are in a country.

First Solar reveals that it is working on a number of projects with “big multinational” mining houses in South Africa, but we will have to wait a little longer to find out who those are.

Labour policies

Labour Minister Mildred Oliphant took singular exception yesterday to detractors of South Africa’s labour policies.

“There are also some who are clearly of the view that our labour legislation is too restrictive and that the South African labour market is over-regulated. We certainly don’t think so,” she said, casting her chagrin to include international organisations, business and the media as critics of the country’s labour legislation.

She said the government was committed to a policy and legislative approach that was captured by the concept of regulated flexibility. Regulated flexibility accepts the necessity of regulation, and the need for flexibility. The key issue is finding the right balance.

Oliphant was speaking at the annual Nedlac labour conference in the context of employment levels in the country.

She said the government was hoping for an improvement this year, having been given an impetus when news broke late last year that employment levels reached 14 million in the third quarter.

“The labour market is back to the employment peak of 2008 before the recession started to bite. You will recall that South Africa lost 1 million jobs during the recession of 2009 and it has taken us since that time to recover and for jobs to be recovered. The official unemployment rate declined to 24.7 percent in 2013.”

She said the National Development Plan (NDP) had a target of 2.8 million new jobs to be created by next year, or a total employment figure of 15.8 million.

Oliphant added that the NDP referred to a “responsive labour market”.

“It says the labour market should create opportunities and work for all, while ensuring human rights, labour standards and democratic representation,” she said.

She is more pragmatic than President Jacob Zuma, who previously promised 5 million jobs would be created by 2014, but we hear nothing of this anymore.

In its manifesto, the ANC promises 6 million job opportunities. One supposes this is through the expanded national public works programme, whose jobs, as we all know, are not sustainable.

Or, as is so often the case, it’s politics as usual.

Edited by Banele Ginindza. With contributions from Ann Crotty, Londiwe Buthelezi and Wiseman Khuzwayo.

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