Global leader in corporate Governance

Online since 31.08.2016 • Filed under Industry news • From Issue 4 - September 2016 - February 2017 page(s) 24
Global leader in corporate Governance

The dangers of mindless compliance and embracing corporate governance through compliance mechanisms and tick-boxes.

‘For many years, South Africa has been ahead of the curve in terms of corporate governance yet, in practice it reminds me of a well-known Monty Python movie,’ says to Daniel Malan, Head of the Centre for Corporate Governance in Africa (CCGA) at the University of Stellenbosch Business School (USB). ‘There is a sense that the country is perhaps better at setting excellent standards while not always living up to them but there is no doubt that the country is acknowledged as a global leader,’ admits Dr Malan. This position is likely to be further entrenched in November with the launch of the fourth King Report on Corporate Governance for South Africa (King IV). It is expected that good governance will once again be positioned as something that is integral to business success, as opposed to a compliance issue. ‘In addition, the ethical underpinning of the governance concept will be maintained and the applicability of governance for organisations of all types and sizes will be emphasised,’ notes Dr Malan. He also points to the inherent contradiction posed by the existence of governance standards such as the King codes. On one hand the code warns about the dangers of mindless compliance while on the other many companies embrace the code through compliance mechanisms and tick-boxes. ‘What is required is consistent internal organisational rewards and behaviours, not external regulation,’ comments Bob Garratt, Chairman of the CCGA. This is part of the philosophy of the Africa Directors Programme of the USB and INSEAD Corporate Governance Initiative. The practice of corporate governance in South Africa reminds Dr Malan of a scene in Monty Python’s Life of Brian: Brian tells the crowd that they are all individuals and different. They respond enthusiastically but as soon as someone says, ‘I’m not’, he is hushed by the crowd!.

Centre for Corporate Governance in Africa University of Stellenbosch Business School

T 27 021 918 4242

W www.usb.ac.za

Issue 4 - September 2016 - February 2017

Issue 4 - September 2016 - February 2017

This article was featured on page 24 of SABI Magazine Issue 4 - September 2016 - February 2017 .

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