Deloitte Global Director Survey reveals that SA directors share governance and risk management concerns with international count
Johannesburg, 14 January 2013 - The Deloitte Global Centre for Corporate Governance has recently released the results of the Global Director Survey, Director 360: Degrees of Progress. South Africa was one of the 19 countries that participated in the survey which provides views and concerns of directors serving on boards around the world on top of mind corporate governance issues such as board composition, regulation, risk oversight, the directors role in strategy etc.
“The South African results of the survey mirrored the global sentiments in the majority of cases with regulation, governance, compliance and risk management being current top of mind issues for Boards”, says Carla Clamp, Associate Director at Deloitte.
The South African Director responses were unanimous in the fact that changes in the regulatory environment will impact the board’s areas of focus over the next few years; and this was also among the highest level of strong agreement in the global survey results. The regulatory environment both globally and locally has changed significantly over the last 5 years and this presents an increasing challenge for boards to assess and obtain assurance on the adequacy of management’s plans to ensure compliance.
The survey indicates that sustainability and social responsibility are becoming more important issues for boards around the world. In South Africa, the requirements of the Companies Act for organisations to implement a social and ethics committee is based on the premise that there is a definite need within the South African context to encourage companies to be more socially and ethically responsible and to account for the public interest perspective in their decision-making processes. The requirement for integrated reporting is also driving organisations and boards to focus more on stakeholder demands and requirements and to integrate financial and non-financial information to effectively tell the story of how the company will create and sustain value in the short, medium and long term.
Global and local boards indicate that they are maintaining an appropriate balance between oversight of risk, growth, performance and strategy (69% of global directors and 100% of South African directors). The high rate of agreement by SA directors can be explained by the fact that organisation’s governance models, supported by King III, has reinforced the integration of strategy, risk management and the measurement of performance through combined assurance form all assurance providers.
“The local and global publications offer insights on the results and top board room issues from our governance specialists around the world, raise questions that boards should be asking themselves and offer resources in the event that boards would like to “dig-deeper” and broaden their understanding of the issues and ultimately improve their boards effectiveness in dealing with and anticipating these issues” says Clamp.