Build, don’t find, competent boards

Build, don’t find, competent boards

With the Women Empowerment and Gender Equality Bill introduced in the National Assembly earlier this month, comments around the perceived lack of skills and training of the intended beneficiaries of the Bill are again doing the rounds. There is however some time before the intended implementation of the Bill in 2015 for entities to ensure that their boards are both compliant and skilled according to business requirements.

According to the current draft of the Bill, both public and private entities will be required to precede all organisational decision and activities with a gender equality analysis, as well as achieve at least 50% representation of women in decision making structures. One of the means to achieve this, as suggested in the Bill itself, is to build the capacity of women in order to enable them to participate in a way that will add value to the business.

"Instead of trying to find candidates with the existing desired mix of skills, qualifications and experience, there should rather be an emphasis on building competency, especially in areas of reported inequality,” said Parmi Natesan, Senior Governance Specialist at the Institute of Directors in Southern Africa. "In today’s complex world, companies can no longer be passive bystanders; they need to be proactive in facilitating the growth of the directors’ range of skills.”

"Directors are required to have knowledge on corporate governance, corporate and other relevant legislation, financial and other reporting, industry knowledge to possess a few. All of these can be learned over time by people of any demographic.”

The duties of a director have changed dramatically with the advent of corporate governance. In the past most directors were also part of the executive team, in other words directorship was usually associated with a management position. Now with the governance requirement to have a larger contingency of independent outside directors on the board in order to strengthen oversight, directorship has developed into a fully-fledged profession. There is also more emphasis on the difference between the management role and that of directors.

"The stereotype of the retired executive taking up directorships is gradually changing as younger people begin to see directorship as a career path in itself,” said Natesan. "There is however no professional standard required for a person to serve as a director. The closest that we come to such standards are the disqualifications provided for in the Companies Act, 2008 due to insolvency, conviction of fraud, etc.”

As solution to this concern, the IoDSA was recognised as the professional body for directors end of 2012 and have since launched the professional designation, Chartered Director (South Africa) which lay down the standard for individuals to serve as directors. The new CD (SA) designation will provide emerging professionals with a way of demonstrating that they meet a certain standard of knowledge and experience, and that they are committed to continuing professional development to maintain that standard. Holders of the CD (SA) designation will also have to adhere to a code of professional conduct and submit to the organisation’s disciplinary procedures.

"Currently the designation is voluntary but our hope is that the market will start insisting that CD(SA)s serve on boards in order to ensure quality of and effective stewardship by boards.”

For more information on the Chartered Director (SA) designation, including admission criteria and code of conduct, please visit www.iodsa.co.za