M.Com. (Business Management) / The subject of this study is the legal position of the company director in South Africa and the influence of the law on the exercise of his management function in the business entity. The law as it pertains to the director is often thought to be unclear and it is a fact that many directors are not aware of all their duties. It is thus necessary to find out what the legal position is and the director must be aware of what the effect of this 'viII be on his function to manage. Is it possible that changes in the law can lead to more efficient management? In this study the conclusion is made that the legal position of the director is quite clear. However, a few changes to the legal position are recommended. The South African director has stringent duties of loyalty and good faith, but very light obligations of skill and diligence. It is recommended that a higher degree of care and skill should be required from the director. A distinction is drawn between the executive director and non-executive director. The main difference being that the executive director participates in the day-to-day management of the company's affairs or of a portion thereof, while the non-executive director does not. For this reason the executive director is the focus of the study. The focus of his management function is strategy formulation. He must keep the undertaking on track through effective strategic management. We are entering the information age where flexibility, creativity and innovation will determine success. Third-wave management will be critical in the future and the director will have to adopt this new approach to management to make sure that his undertaking will be adaptable to change.

The major aim of the study is to establish· whether a relationship exists between the composition and effectiveness of the board of directors. Selection, particularly selection procedures became relevant in the study, whether there were different selection procedures for board of directors in South Africa. Developing common selection guidelines and board composition profile is an important element of this study. A case study research method was used to collect data. The sample was drawn from KwaZulu-Natal based companies including 25 directors of companies not necessarily members of the companies in our sample. The sample parameters included a listed conglomerate, municipal funded, unlisted private, black economic empowerment and parastal companies. The conclusion is that, composition does impact on the effectiveness of the board of directors. Secondly, boards of directors have different composition profiles. Furthermore, their selection procedures differ to an extent. These differences are driven by the needs of the organization rather than sectoral location. However, sectoral imperatives do have an influence, which cannot be completely excluded. Whilst, the study found that there were certain uniform requirements to be met by all companies in terms of corporate governance, there were certain instances where the universality of guidelines and/or models and/or perspectives were suspect due to a number of factors. Accordingly. recommendations and/or guidelines are outlined to improve effectiveness of the board of directors. These entail amongst other issues: ~ Board Structure and size ~ Board Composition ~ Board Selection ~ Board Induction ~ The Chairman's Role ~ The Roles of Chief Executive Officers ~ The Role of Executive Directors ~ The Role of Non-Executive Directors ~ The Executive Director ~ Board Committees ~ Gender Equality and Diversity ~ Compensation of the Board ~ Board Appraisal / Evaluation ~ Shareholder Activism Enforcement takes precedence over voluntary compliance to corporate governance in the guidelines recommended in this study. / Thesis (MBA)-University of Natal, Durban, 2002.

Thesis (MBA)--Stellenbosch University, 2014. / ENGLISH ABSTRACT: Newspaper headlines have continued to shock investors and society by exposing corporate scandals and by highlighting the overall decline in moral fibre of the modern employer and/or employee, locally and internationally. The King III Report on Governance aims to improve organisations’ sustainability by providing principles to enable sound decision-making for any organisation, irrespective of its size and/or structure. The objective of this research report was to investigate the challenges experienced with the application of these principles, with a specific focus on the guidance provided to enable the independence of directors. Firstly, this investigation aimed to establish whether there was a belief that the application of these principles would necessarily lead to sustainability; and secondly, whether the application of these principles were practically possible for all organisations, irrespective of their size and/or structure. The investigation was conducted by combining the results from a literature review on corporate governance with a specific focus on director independence and a survey conducted with twelve individuals involved in different capacities at board level. Based on the information obtained from the literature review and the results obtained from the questionnaire, overwhelming support exists that indicates that the application of the King III principles would contribute to improve the sustainability of an organisation. However, it was discovered that it would not necessarily be feasible for all companies, of any size and/or structure, to effectively apply these principles. Various recommendations were made to address the challenges identified for the effective application of the King III principles relating to the independence of directors.

Director interlocks have concerned shareholders, the public and legislators since the early 1900’s. In 1914 the Clayton Act prohibited interlocking directorates among competing corporations in the USA. Research has been performed since the 1930’s covering stock exchanges around the world, however very little information was available concerning director interlocks in South Africa. This paper analysed interlocking directorships of the Top 40 companies listed on the Johannesburg Stock Exchange using key metrics as per Newman and Conyon’s Small World theory, comparing the results to research on Italian, French, German, UK and US companies performed in 2008 by Santella, Drago, Polo and Gagliardi. South Africa was found to be closest to Italy, between the low density models (UK and US) and the significantly higher density models (Germany and France), suggesting that rather than just the two camps, there is a continuum currently reflected as the UK, US, South Africa, Italy, France and Germany. The presence of directors with multiple directorships and having significant influence in the network suggests systemic collusion is possible. Analysis performed on the composition of JSE boards showed that many of the King III Code requirements (presence of Non-Executive Directors, split of Chairman from Chief Executive amongst others) are met while some, such as the annual rotation of one third of directors and the independence of directors is problematic. There is still much that can be learned through enhancing the research coverage to provide a factual basis for understanding the impact of legislation and governance codes on the South African network, as well as to perform holistic research covering the combined network formed by board on exchanges across the globe. / Thesis (MBA)-University of KwaZulu-Natal, Durban, 2012.

The corporate governance set-up in South Africa has undergone fundamental changes during the past decade, with the country today being responsive to most corporate governance issues. South Africa should be complimented for its King Code on Corporate Governance, the Companies Act and Johannesburg Securities Exchange Listing Requirements which have significantly strengthened the country’s corporate governance framework. These legal instruments have been influential in limiting directors’ powers and regulating the way directors are remunerated as a way of achieving good corporate governance. The research discusses the South African corporate governance framework with particular focus on the legal and regulatory framework that seeks to regulate directors’ powers and remuneration. An evaluation of the extent to which the legal and regulatory framework restrains directors’ powers and curbs excessive remuneration is undertaken. Recommendations are then provided on how the existing framework can be improved to adequately and effectively regulate directors’ powers and remuneration so as to achieve good corporate governance. / Mercantile Law / LL.M.

Thesis (LLM (Mercantile Law))--University of Stellenbosch, 2007. / The collapse of Enron, WorldCom and other companies and the worldwide adoption of codes of good corporate governance have highlighted the poor standard of corporate governance systems and brought about big changes in this field. Corporate scandals in Britain and South Africa have contributed to greater local awareness of the failings of traditional company governance. In the Anglo-Saxon system non-executive directors are important watchdogs over powerful executive directors and other managers who are in a position to abuse their powers to the disadvantage of the shareholders. As independent supervisors non-executive directors are in a position to protect the interests of shareholders and prevent the manipulation of power relationships by executive managers. Independent supervision is of the outmost importance to ensure effective corporate governance. It contributes to the objectivity of the decision-making process and also to the appointment of other efficient non-executive directors. Independence of non-executive directors is influenced by the limited candidates in the pool from which they are appointed. This leads to a limited number of non-executive directors serving on multiple boards of directors, which in turn compromises their independent supervision function. The promotion of diversity on company boards, can expand the “limited gene pool” of non-executive directors. The question arises whether black economic empowerment, as a mechanism to promote greater diversity, has in South Africa contributed to a wider gene pool from which non-executive directors are appointed? In this study it is concluded that, instead of widening the gene pool of non-executive directors, black economic empowerment is creating a second “gene pool” of black directors who serve on multiple boards and with potential implications for their independence.

The corporate governance set-up in South Africa has undergone fundamental changes during the past decade, with the country today being responsive to most corporate governance issues. South Africa should be complimented for its King Code on Corporate Governance, the Companies Act and Johannesburg Securities Exchange Listing Requirements which have significantly strengthened the country’s corporate governance framework. These legal instruments have been influential in limiting directors’ powers and regulating the way directors are remunerated as a way of achieving good corporate governance. The research discusses the South African corporate governance framework with particular focus on the legal and regulatory framework that seeks to regulate directors’ powers and remuneration. An evaluation of the extent to which the legal and regulatory framework restrains directors’ powers and curbs excessive remuneration is undertaken. Recommendations are then provided on how the existing framework can be improved to adequately and effectively regulate directors’ powers and remuneration so as to achieve good corporate governance. / Mercantile Law / LL.M.

The political and economic pressures for transformation in South Africa have been documented in an array of policies, pieces of legislation, regulatory and statutory frameworks, and also in governance codes for both public and private companies. Specifically for the mining industry, the Mining Charter comprises of transformation targets and measurement criteria that are presented in a scorecard to be achieved by the mining industry by 2014. Additionally, the King reports on governance have specific requirements that listed companies must meet in terms of employment equity and demographic representation to achieve board diversity and independent boards. The aim of this study was to report on the board transformation status in the mining industry, as well as the progress that has been made towards meeting transformation targets. The 2011 annual reports were used to capture profiles and composition of board of directors in Johannesburg Stock Exchange (JSE) listed mining companies. Interviews were used to gain insight on the transformation status, initiatives undertaken and challenges of transformation in the mining industry. The research findings from the analysis of board members demographic and career profiles shows that little has been achieved to ensure equal representation and diversity on the boards of directors. Further analysis of the status of transformation by JSE listed mining companies to realise transformation, shows that transformation in the mining industry is still a major challenge. Whilst some initiatives have been undertaken and some progress has been made, this study reveals that the barriers to transformation in the South African mining industry are racial issues and tensions based on colour, the lack of skills caused by the education system, a war for talent, a lack of mentorship and no stakeholder engagement between the mining industry and government / Business Management / M. Com. (Business Management)

Effective corporate governance of boards can become a sustainable competitive advantage for organisations. In the extant literature a number of reasons are cited for dysfunctional boards. Some of the reasons attributed to board failure relate to poor corporate governance, practice and oversight. Some of the reasons for board failure pertain to micromanaging of the organisation, an ineffective nominating committee, size of the board, non-functioning committee structure, absence of strategic plan, no orientation\induction plan and no rotational plan. Poor governance practises across all sectors has negatively tainted economic investment in South Africa consequentially affecting economic growth. Below South Africa’s competitive rating slipped from (52nd) in 2012-2013 to 53rd in 2013-2014 rating is given to show that marked improvement is needed in corporate governance. South Africa’s rating in the Corruption Perceptions Index for 2012 was 43 and slipped to position 69 amongst 176 countries for the Corruption Perception Index, 2013. The trend analysis report of the Public Service Commission reported that In 2006/7, there were 1 042 cases of corruption, amounting to R130.6-million; in 2007/8, there were 868 cases, amounting to R21.7-million; in 2008/9, there were 1 204 cases, amounting to R100.1-million; in 2009/10, there were 1 135 cases, amounting to R346.5-million; in 2010/11, there were 1 035 cases, amounting to R932.3-million; in 2011/12, there were 1 243 cases, amounting to R229.9-million. Good governance frameworks, policies, procedures, processes and practices attract foreign direct investments. Better governance practices are critical for improved economic growth and development that will result in an improvement in the South Africa’s competitiveness and corruption perception index ratings. South Africa’s continued economic growth and development is dependent on attracting foreign direct investment. From 1994 corporate governance regimes were promulgated. Although there are a collection of corporate governance codes and guidelines that have been published, few specifically cover governance practices in public entities. Moreover, with better governance practices state-owned enterprises can significantly contribute to the economic transformation and development in South Africa. The purpose of the study is to establish that improved governance is a function of board structure and board process variables. With the presence of structural and process variables board activism will improve resulting in board decision quality. Independent directors without no conflict of interest, the requisite industry expertise and intelligence (functional area knowledge), the information to make decisions are adequate, accurate and timely (information quality), directors exert the needed effort (effort norms), directors robustly explore all dimensions and options (cognitive conflict) and the board functions optimally (cohesiveness) influence board decision quality. Boards which are configured optimally are able to execute their fiduciary responsibility optimally. In 2012 a budget of R845.5 billion was provisioned for infrastructural development to boost economic development. This budget allocation must be prudently and frugally managed in accordance with good governance practises to achieve economic development. In particular South Africa has to improve its competitiveness rating and corruption perception index to attract investments and continual growth. In terms of the research design, to address the research questions, a mixed research approach was selected for the study. The phenomenological (qualitative) and positivist (quantitative) philosophical paradigms were adopted with the purpose to obtain a greater understanding of board decision quality in the Public Entities in South Africa. The data collection instruments used in the study was in-depth interviews, focus group interviews and administration of a survey. The population for the qualitative research was 19 in-depth interviews and two focus group interviews. For the quantitative study a population of 215 public entity board members were selected for the study. A total of 104 board members of Public Entities completed the survey for the study. In relation to data analysis for the qualitative study Tesch’s coding, thematic analysis was used to analyse the in-depth and focus group interviews. For the quantitative study, SPSS was used to analyse responses from the surveys. The hypothesis was tested using inferential statistics, namely, factor analysis and multiple regression was used.. The findings generated from the first phase, the qualitative study that provided support for the positive relationship between board structure, board process variables and board decision quality. The following five variables are incorporated in a model that seeks to identify the strongest predictor of board decision quality: (1) board independence, (2) effort norms, (3) functional area knowledge and skill, (4) cognitive conflict and (5) information quality. The findings show that information quality is the strongest predictor of board decision quality followed by expert knowledge and skill. As expected, expert knowledge does not only increase the cognitive capacity of the board, but it also positively affects company competitiveness. The findings also show that cognitive conflict has a negative association with decision quality. The study argues that political influence exerted by board political appointees may explain the negative relationship between cognitive conflict and board decision quality. The major contribution of this study is that it provides a 28-item instrument that can be used practically by public entity boards in the reflective process to improve board decision quality. The study concludes by offering avenues for further research. The model suggests that board decision quality is a product of board structure (board independence), board process (functional area knowledge, information quality, and cognitive conflict and effort norms). / Business Management / D.B.L.

Thesis (MBA (Business Management))--University of Stellenbosch, 2009. / ENGLISH ABSTRACT: The King II Report on Corporate Governance reported that the 19th Century saw the foundations laid for modern corporations, this was the century of the entrepreneur. The 20th Century became the century of management and that the 21st Century promises to be a century of governance, as the focus swings to the legitimacy and the effectiveness of the wielding of power over corporate entities worldwide. South Africa has come a long way since the companies reform project was formally launched in 2004 when the Department of Trade and Industry published the guidelines for corporate law reform in South Africa. Most critics believe that the new Companies Act is long overdue and will contribute to South Africa’s economic growth and align us with international standards and practices. The aim of this research report is to educate directors and potential directors on the most significant changes brought by the new Act and the responsibilities and liabilities of directors as set out in The King II Report. / AFRIKAANSE OPSOMMING: Volgens die King II Report is die fondasie vir moderne korporasies gedurende die 19de eeu gelê – die eeu van die entrepreneur. Die 20ste eeu het die eeu van bestuur geword, terwyl die 21ste eeu beloof om ‘n eeu van beheer te wees soos wat die fokus verskuif na die geldigheid en die effektiewe beheer van mag oor korporatiewe entiteite wêreldwyd. Suid-Afrika het ‘n lang pad gestap sedert die Maatskappye-hervormingsprojek formeel geloods is in 2004 met publikasie van die Departement van Handel en Nywerheid se riglyne oor korporatiewe regshervorming in Suid-Afrika. Die nuwe Maatskappye wet is lankverwag en meeste kritici glo dat dit sal bydra tot ekonomiese groei in Suid-Afrika en Suid-Afrika in lyn sal plaas met internasionale standaarde en praktyke. Die doel van hierdie navorsingsverslag is om direkteure en potensiele direkteure in te lig omtrent die mees noemenswaardige veranderinge wat deur die nuwe Maatskappye wet daargestel sal word asook die verantwoordelikhede en aanspreeklikheid van direkteure soos uiteengesit in die King II Report.