JOHANNESBURG – Directors occupy an apex position in the South African economy, and have a good vantage point from which to survey their particular industry sector and the economy as a whole.
The Directors’ Sentiment Index, conducted annually since 2016 by the Institute of Directors in South Africa (IoDSA), aims to provide concrete data on what the members of governing bodies are thinking across the public and private sectors, SMMEs and non-profit companies.
The survey records how directors feel in respect of four areas: economic, business, governance and directorship. In addition, there was an opportunity to raise general concerns. They fell into several broad groups:
- Unfavourable context. Corruption and malfeasance in both the public and private sectors, unsurprisingly, are one major concern. Another is broad-based black empowerment, which many see as a barrier to business performance. Political uncertainty is also weighing heavily on directors.
- Lack of professional directorial skills. Incompetent directors hold boards back from making progress. An allied issue was the lack of skills transfer from established directors to the new generation.
- Boards themselves suffer from poor corporate governance. Some respondents felt many boards do not understand or adhere to the principles of King IV. Many directors feel they do not really have strategic control of the boards on which they serve, and there is inadequate communication between directors and stakeholders.