King Committee and IoDSA call on Pres Ramaphosa to honour commitment to Zondo recommendations

The King Committee and the Institute of Directors in South Africa (IoDSA) are calling on President Ramaphosa to honour his undertaking to submit his response plan to the Zondo Commission’s 358 recommendations by 15 October.

“The speed with which the Zondo Reports were released sent an important message about how important these reports are. It is a message that could be seriously undermined should the recommendations not be acted upon with the same sense of urgency,” says Ansie Ramalho, Chair, King Committee on Corporate Governance for South Africa. “The President’s recent hints that the slight delay in the Commission’s submission of its final report could impact on the timeframe of four months imposed by the courts to announce government’s response is somewhat worrying.”

Ms Ramalho says that the King Committee would like to see the President address key issues relating to leadership. Generally speaking, the Zondo Reports show that a lack of leadership—from the President, Parliament, ministers and boards, both in the public and private sectors —lies at the root of state capture.

“The King Committee would like to see the President define the role that shareholder ministers must play in ensuring that SOE boards have ethical and competent and effective members. Shareholder ministers need to be held accountable for following a fair and transparent process when they make board appointments. King IV’s Supplement for state-owned entities contains good guidance,” she says. “Arbitrary decisions, protected from public scrutiny and with no appreciation of accountability, are not fitting in a democracy. The President should make this clear in his response.” The King Committee strongly argues that making board appointments based on politics, ideology or patronage results in the enrichment of the few at the cost of the many.

Parmi Natesan, CEO of the IoDSA adds that the broader question of what criteria should be used when making board appointments should also be addressed. Board members bear a heavy responsibility and general business proficiency in a particular industry is not enough. Directors pre-eminently need to possess specific competencies as professional directors, as outlined in the IoDSA’s Director Competency Framework. Without these professional competencies, in addition to appropriate industry experience, they will not be able to fulfil their role and legal duties effectively.

“Attention should be given to ensuring that boards contain individuals with a diversity of opinion and experience able to offer different perspectives and inspire more robust debate towards the goal of better decision-making,” added Natesan.

“King IV defines governance as ethical and effective leadership, or differently put, ethical and competent leadership. Failures of leadership at every level enabled state capture, and the King Committee expects that the President’s response to the Zondo report’s recommendations are timeous and will address this core issue effectively,” says Ms Ramalho.