critical notes on the desired state of boards in sa
The desired state of boards in sa are clrearly staed in the King 4 principles and regulations layed out by the companies act 2008. King 4 are principles to guide the desired state of boards while the companies act are measures and rules to of what directors may or may not do. Together they paint a picture of the desired state of what a board should be in south Africa
Neren Rau indicates that fir directors to be effective they require delivery of the right information with sufficient time to analyse and reflect. The information must be honest so to make the correct decisions.
Neren Rau also states that sustainability is paramount for the desired state of boards and to stay relevant to current and potential boards. King(9) states that boards should constanly evaluate its performance to suport continued improvements in its performance and effectiveness.
There are 3 main chalanges boards face in south africa. The first is that Directors must have courage to be independant and not be pulled into group think. they must also have the courage to stand for what they believe in. the second chalange to directors is the balance of power. The correct power relationship between the board memebrs to avoid a membr of the board shutting down all other voices but his own. King(8) also states that borads should deligate within its own structures to promote independant judgement and assist with balance of power to discharge its duties.
The third chalanges to a board is to appoint the right quality of directors. King 4(7) that the board must comprise of the appropriate balance of knowledge and skille top discharge its role effectly.
k 1: lead ethically and effectively
k2: lead in a way that supports ethical culture
k3:ensure the organization is seen as a responsible corporate citizen
k5:ensure the reports enable stakeholder to make informed assessments
k6:governing body serve as focul point of corporate governance
The companies act clearly states the leagal requirements of social and ethical commitees in terms of composition and what the chair may and may not do witht he comitees. The king 4 has more clearly defined guidlines to who may and may not be head of what commitees and audit commitees.
