Page 26 - The Corporate Report Pack

their knowledge, experience and networks We have also introduced the Chartered Director (South Africa), or CD (SA), designation, to give pro cient directors a formal structure for acquiring and testing necessary director
director’s skills e quality and diversity of a board a ects the company’s ability to navigate the complex web of stakeholder interests in which they operate, and to face up to the threats of disruption and heightened
e quality and diversity of a board a ects the company’s ability to navigate the complex web of stakeholder interests in which they operate and to face up to the threats of disruption and heightened competition.
competencies, and keeping them current ere is no reason why boards, having identi ed a candidate to ll a vacancy, could not insist that person commit to a certain development schedule in order to acquire professional
competition It is therefore critical that every e ort is made to ensure that the pool of available directorial talent is broadened and deepened, and that the capacity ability and contribution of each director is assessed regularly
Finding new non-executive directors
King III recommends that board members be chosen through a formal and transparent process, and that the board should be ‘properly constituted from the viewpoint of skill and representivity.’3 The IoDSA advises boards to conduct a needs assessment to determine what skills and experience are required to ll board vacancies.4 The needs of the various board committees should also be considered.
Shareholders should be given the opportunity to
contribute to the nomination process, but the board is also
invited to consider other sources of potential candidates,
such as recommendations from current board members,
empowerment partners or other material stakeholders,
using an executive search rm and so on. team
Individual nominees should be assessed in terms of their:
• experience as director
• competencies and quali cations, including strategic,
nancial, risk, legal and industry knowledge (in particular, potential directors need to demonstrate a broad-based knowledge and understanding of the Companies Act 71 of 2008 and King III)
• genuine interest in the organisation and its business • instinct, for example, good business instincts and acumen and the ability to get to the crux of an
issue
• an active contributor who attends meetings and
participates actively
• competence and commitment to serve as a
director.
• diversity (of age, gender, race, nationality, experience and knowledge)
• independence (perceived and actual)
• the number and nature of other directorships held • other commitments and time availability
• reference and background checks (particularly on
the ineligibility and disquali cation factors)
• consent to act (where a potential candidate is nominated, the nomination committee needs to ensure that the candidate is willing to be considered
for appointment).
Personal attributes to consider include:
• integrity, such as acting honestly and in the best
interests of the company
• curiosity and courage, such as the ability to ask
tough questions
• interpersonal skills and ability to work in a collegial
3 Institute of Directors in Southern Africa ‘King Report on Governance’ (King III) (September 2009), Chapter 2, Principle 219, Recommendation 80
4 Institute of Directors in Southern Africa Practice Note on ‘ e selection, nomination and voting for non-executive directors’ (September 2011),
available at
34 The Corporate Report
How many is too much?