Rating corporate governance the delicate balance between disclosure
Rating corporate governance: the delicate balance between disclosure, compliance and performance Daniel Malan Head: Unit for Corporate Governance in Africa KPMG Special Advisor: Ethics and Governance
Unit for Corporate Governance in Africa • • Our mission – To develop both the compliance and the performance aspects of directors’ attitudes, knowledge and skills, as well as the link between corporate governance, business ethics and total organisational performance From our manifesto – Effective corporate governance is the key to building stable and healthy institutions in a nation. These institutions include listed and unlisted companies, central government departments and agencies, state-owned enterprises, regional and local government organisations, family businesses, charities and non-profit organisations
PIC Corporate Governance Rating Matrix • Joint venture: PIC & Unit for Corporate Governance in Africa • Developmental tool, aimed at assisting companies to improve their corporate governance performance and reporting • Will have an impact on PIC investment decisions • 2009 – Pilot Version – Top 40 companies – No public disclosure of results
The Team • • Experts – Bob Garratt – Philip Sutherland – Tom Wixley – Kwanele Gumbi Unit – Thina Siwendu – Daniel Malan – Glen Davison – Matseko Mohlaba – Anna Yortt – Adrian Bertrandt • • • PIC – Deon Botha Issue specific input – Stephen Davies (Yale) – Paul Lee (Hermes EOS) – Jako Volschenk (USB) Statistical validation – Martin Kidd (Centre for Statistical Consultation, Department of Statistics and Actuarial Sciences, University of Stellenbosch)
The Model Disclosure Compliance Performance
The Matrix BOARD INDIVIDUAL DIRECTORS EXECUTIVE MANAGEMENT REMUNERATION SHAREHOLDER TREATMENT RELATED PARTY TRANSACTIONS AUDITING AND ACCOUNTING DISCLOSURE AND REPORTING CORPORATE BEHAVIOUR TRANSFORMATION ENVIRONMENTAL BEHAVIOUR HEALTH AND SAFETY CORPORATE RESPONSIBILITY CORPORATE CULTURE
The Way Forward • • 2010 – Top 40 companies – Changes based on experiences during pilot – Changes based on King III – Possibly public disclosure of results 2011 and beyond – Public disclosure – Top 100 companies – Comparative information
The learning board basic framework Policy formulation External Accountability Internal Board conformance Supervising management Short term Business Brain Board performance Strategic Thinking Long term Source: Bob Garratt (Thin on Top)
The learning board basic framework & King III External Accountability Ethical leadership and Corporate citizenship Audit committee Integrated reporting Compliance Board conformance Risk IT Internal audit Internal Policy formulation Supervising management Short term Boards and Directors Board performance Stakeholder management Strategic Thinking Long term
daniel. malan@usb. ac. za 083 5611292 www. governance. usb. ac. za
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