Institute of Directors to Zondo Commission: make directors more accountable
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THE Institute of Directors in South Africa (IoDSA) has sent a list of recommendations to the Zondo Commission on how to improve directorship in the country.
In an eight-page letter to the commission, IoDSA chief executive Parmi Natesan told Deputy Chief Justice Raymond Zondo that testimony before him strikingly demonstrated how important a role directors played in creating and maintaining well-governed organisations and how dire the consequences were if they did not discharge this critical responsibility appropriately.
She said a failure of boards, both in the public and the private sectors, to understand or practise their governance role or fulfil it adequately lay at the heart of state capture.
Natesan is hoping the IoDSA recommendations will form part of the final report, which was due out in October before the commission requested a three-month delivery extension.
According to Natesan, there were two key issues preventing effective governance in South Africa. One was the process for nominating board members, which she said was not transparent and was a particular challenge in the public sector, but this problem was also evident in the private sector.
Secondly, she said that many people lacked specialised skills and knowledge needed to discharge the duties of a modern-day director.
The IoDSA said the country urgently needed to reverse the current tide of corruption, leaders needed to be accountable for their actions, and means needed to be found for removing transgressors from office.
Among the key recommendations to the commission was the need to bolster the current legislative framework, which she said was fragmented.
According to her, part of such a new integrated framework would be continuous professional development. She also called for the enforcement of a statutory body for directors, including a licence to operate, as with most other professions.
The IoDSA also recommended to the Zondo Commission that it stipulate a consistent and transparent nomination process for directors in which a nominating panel was made up of key stakeholders.
The body also called for the establishment of a constitutional means of alternative dispute resolution that would facilitate prompt consequence management for directors who transgressed or for those who applied lax oversight.
The institute also wanted the commission to recommend uniform governance training for national leaders in both the public and the private sectors.
Natesan said many members of institutions did not fully understand the nature of the governance role they were expected to play.
“A key issue is the imperative to distinguish between party political and other stakeholder interests and the best interests of the organisation in question. It would be ideal if MPs, state functionaries and office-bearers in political parties are also mandated to receive focused training,” she said.
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