ETHICS AND CODE OF CONDUCT OF COUNCIL MEMBERS

“ETHICS AND CODE OF CONDUCT OF COUNCIL MEMBERS” COUNCIL REGIONAL WORKSHOP 16 AUGUST 2014 Presented by: M Bikwani

INTRODUCTION " The greatest want of the world is the want of men and women—who will not be bought or sold, who in their inmost souls are true and honest, who do not fear to call sin by its right name, whose conscience is as true to duty as the needle to the pole, men and women who will stand for the right though the heavens fall. " Ellen G White

INTRODUCTION • University – Juristic person • Sovereign – Academic freedom. • Owned by the people. • Owner of very serious assets. • Regulated by an Act of Parliament – HEA 101/97, as amended.

COUNCIL & COUNCIL MEMBERS Council of public higher education institution (s 27) (1) The council of a public higher education institution must govern the public higher education institution, subject to this Act and the institutional statute. (7) The members of a council(a) must be persons with knowledge and experience relevant to the objects and governance of the public higher education institution concerned; and (b) must participate in the deliberations of the council in the best interests of the public higher education institution concerned.

COUNCIL ROLES AND RESPONSIBILITIES • Setting mission and purpose. • Appointing Vice – Chancellor/Executives/Senior Managers. • Evaluating and supporting the Vice-Chancellor. • Ensuring good and effective governance and management. • Accountable for financial and institutional assets. • Making sure there is a clear executionable strategic plan.

COUNCIL ROLES AND RESPONSIBILITIES • Monitoring the transformation process. • Ensuring student access and success. • Good order and a safe campus environment. • Preserving institutional autonomy. • Taking stock of council’s own performance.

THE VEHICLE • Establish Council committees with clear terms of reference: • Membership • Senior Appointments • Physical Planning • Advancement and Marketing • Audit and Risk Management • Finance • Remuneration – external members • EXCO – all chairpersons of the committees above.

HOW - COUNCIL? • The full council should engage: • In discussion of the overall institutional mission and strategy. • Determine the priorities the committees should explore. • Council should not be a repetition of the committee discussion. • Engage in future oriented discussions. • In dialogue that deepens its understanding, collectively and individually, of the academic project. • In discussions that embed a governance culture whilst moving the institution to greatness/excellence.

HOW – COUNCIL MEMBER? • Be of service to the institution and not a section – support majority decisions – recourse is to resign. • A trusted ambassador to the general public – if not a councillor – who will? • Be weary of the media about institutional issues – Chairperson and VC. • Network with other community leaders without using council for personal interest. • Consistently exercise good judgement and listen discriminately. • Provide humility, conviction and leadership.

HOW - COUNCIL MEMBER? • Act with utmost honesty – beyond reproach. • Act with degree of care, skill and diligence. • Act in good faith and for proper purpose. • In the best interests of the institution. • Avoid insider trading – using information gained in the line of office for personal or others gain.

COUNCIL, COUNCIL MEMBERS & CODE OF CONDUCT (s 27(7 E)) 2011 • The Act now requires every Council, after consultation with its Institutional Forum, • to “adopt a code of conduct to which all members of Council, and • all members of committees of the council, and • all who exercise the functions of Council in terms of delegated authority must subscribe”. This new requirement is a direct response to the recent lapses that led to a number of institutions to be placed under administration

WHY CODE OF CONDUCT? • Different homes. • Different education. • Different cultures. • Different interests. • This is the common way here.

COUNCIL, COUNCIL MEMBERS & CODE OF CONDUCT (s 27(7 E)) 2011 Code of Conduct regulates: • expectations and obligations of council members; conflict of interest, disclosure and associated procedures, procedure for dealing with alleged breaches and associated sanctions, amongst other things. Members receive it at induction and reaffirm annually.

CONFLICT OF INTERESTS • The new requirements of the Companies Act, 2008 has also brought the debate into the spotlight. • Council would be well advised to deal appropriately with conflicts of interest, given that perhaps the most significant protection for councillors, the business judgement rule, requires councillors to manage conflicts in accordance with the Act. • Focus on identifying conflicts, either real or perceived, and also provide guidance to councillors to assist them in assessing the appropriate manner of dealing with conflicts as they arise.

WHAT ARE CONFLICTS? • Conflicts are defined in many ways; however, the basic elements of any of these definitions is the tension between two or multiple competing interests, interests be these personal or financial. • This often manifests in the entanglement of the private and professional interests of an individual. • These conflicts may be actual or perceived. The perception of a conflict is influenced by whether an independent observer might question whether a director’s professional actions were motivated or influenced by a potential personal financial gain.

WHAT ARE CONFLICTS? • Not all conflicts are an indication of an impropriety. • As King III states, the onus is on individual Councillor to assess whether he or she is free from apparent or actual conflicts. • The management of the conflict is a crucial step in dealing with these issues, and is the responsibility of the individual director. • Whilst the Companies Act and King III does address a limited range of conflicts, Councillors should bear in mind that those conflicts not covered by the Act may be covered by common law.

ARE THESE CONFLICTS? • The VC acting as a member of the remuneration, audit or nomination committees, rather than attending by invitation to discuss matters other than his or her own remuneration. • A Council accepting frequent or lavish entertainment or gifts from a supplier or contractor who has business dealings with the University. • A member of council proposing the appointment of a company that he or a close family member has a beneficial interest in.

ARE THESE CONFLICTS? • A councillor whose family member is proposed for a position within the university is present when any aspect of that family member’s remuneration is discussed. • Stakeholder representatives who are appointed to council with the expectation to represent the stakeholder’s interest, not necessarily the best interest of the university on whose council they serve. • A councillor whose company has been awarded a tender by the university whilst she was already serving on council. • A councillor’s son a student at the university failed to write a crucial test that threatens his success in the final exam, he did not write because he went on holiday with his father. The councillor wants to request the lecturer to allow him to write a supplementary.

WHEN CAN CONFLICTS BE MANAGED AND WHEN NOT? • King III states that certain conflicts of interest are fundamental and should be avoided. • Other conflicts (whether real or perceived) should be disclosed in good time and in full detail to the board and then appropriately managed. • In assessing whether the conflict is fundamental and therefore must be avoided, the councillor considers the pervasiveness of the conflict and the period of time over which the conflict will occur. This will often involve judgement. • However, an indicator to consider would be whether the councillor can continue in his or her current position whilst the conflict still exists.

WHEN CAN CONFLICTS BE MANAGED AND WHEN NOT? • The reference to management of the conflict relates to whether the councillor may continue to operate in his or her current capacity or whether the councillor should consider terminating the appointment. • However, there may be circumstances where the conflict can be managed. This may be the case where the conflict is not as pervasive, pervasive or relates to a decision that is taken only once • It is also important to distinguish between actual conflicts and other perceived conflicts. • Whether the conflict is considered to be one that may be managed or not, the relevant disclosures as required must at all times be adhered to.

ACTING INDEPENDENTLY AND BEING INDEPENDENT • King III states that ‘an independent councillor should be independent in character and judgement and there should be no relationships or circumstances which are likely to affect, or could appear to affect this independence. • Independence is the absence of undue influence and bias which can be affected by the intensity of the relationship between the councillor and the university.

ACTIONS REQUIRED WHERE A PERSONAL FINANCIAL INTEREST EXIST If a councillor has a personal financial interest in respect of a matter to be considered at a meeting of council, or knows that a related person has a personal financial interest in the matter, the councillor — a) must disclose the interest and its general nature before the matter is considered at the meeting; b) must disclose to the meeting any material information relating to the matter, and known to the councillor;

ACTIONS REQUIRED WHERE A PERSONAL FINANCIAL INTEREST EXIST c) may disclose any observations or pertinent insights relating to the matter if requested to do so by council; d) if present at the meeting, discussion must leave the meeting immediately after making any disclosure contemplated in paragraph (b) or (c); e) must not take part in the consideration of the matter, except to the extent contemplated in paragraphs (b) and (c).

WHAT TO DO WITH CONFLICT THAT ARISES DURING COUNCIL DISCUSSION • The councillor should immediately consider whether the matter is material, both from his and the university’s perspective, and request additional time to consider the matter, if so required. • Where the councillor then assesses that a conflict does exist, he or she must declare the interest and take the necessary steps in the best interest of the university.

THE HOW TO Leadership characterized by ethical values of: • responsibility, • accountability, • fairness and, • transparency

THE HOW TO - THE FIVE GOVERNANCE SINS • Greed – self-interest. • Fear – self-concern. • Sloth – imbalance. • Pride – egg on face. • Arrogance – the need to be right.

CHARACTER FIRST - setting the tone for governance • Alertness vs Carelessness - Being aware of what is taking place around me so I can have the right responses. • Availability vs Self-Centredness - Making my own schedule and priorities secondary to the wishes of those I serve. • Courageous vs Fearfulness - Confidence that what I have to say or do is true, right and just. • Decisiveness vs Procrastination - The ability to recognise key factors and finalise difficult decisions. • Discretion vs Simple-Mindedness - Recognising and avoiding words, actions and attitudes that could bring undesirable consequences. • Honour vs Disrespect - Respecting others because of their being and the higher authority they represent.

CHARACTER-FIRST – setting the tone for governance • Justice vs Corruption - Taking personal responsibility to uphold what is pure, right, and true. • Persuasiveness vs Contentiousness - Guiding vital truths around another’s mental roadblocks. • Responsibility vs Unreliability - Knowing and doing what is expected of me. • Tolerance vs Prejudice - Acceptance of others as unique expressions of specific character qualities in varying degrees of maturity. • Truthfulness vs Deception - Earning future trust by accurately reporting past facts. • Wisdom vs Natural Inclination - Seeing and responding to life situations from a perspective that transcends my current circumstances.

THE ROLE AND RESPONSIBILITY OF THE CHAIRPERSON OF COUNCIL • Must ensure that committees and individuals to which responsibility has been delegated report back appropriately on their discharge of those delegated responsibilities. • Should take particular care that all Councillors observe the principles of good behaviour in public life, which embrace selflessness, integrity, objectivity, accountability, openness, honesty and leadership. • To ensure, along with the Vice-Chancellor and others, that the institution is well connected and represented with its stakeholders and other external bodies.

THE ROLE AND RESPONSIBILITY OF CHAIRPERSON OF COUNCIL • To Stakeholders for the leadership of the Council and ultimately for its effectiveness. • Promote its well-being and efficient operation, ensuring that members work together effectively and have confidence in the governance processes laid down. • The Chair is ultimately responsible for ensuring that the Council establishes oversight and discusses those issues which it needs to discuss, and dispatches its responsibilities in an effective way.

“No wrongdoers should be free from the threat of exposure” Sir Sydney Kentridge Steve Biko Memorial Lecture at UCT 2011.

ENKOSI! THANK YOU