M.Comm. (Financial Management) / Our planet is getting smaller and older because the population is growing by the second and our resources and means of sustaining life are getting depleted. Companies need to rethink their strategy and business models to do no harm to the environment and society. The board of directors, as custodians of corporate governance, are responsible to direct their corporations towards sustainability performance. This has implications for the manner in which the board act and organise themselves. This study explores whether the board characteristics of sustainability performing companies differs from non-performing companies in terms of the gender; ethnicity; age; affiliation and the background of the directors at specified points in time namely 2004, 2007 and 2010 and how these board characteristics evolved over the specified period. The results should contribute to obtaining an understanding of how boards in South Africa are organising themselves in practice to enhance the sustainability performance of their companies. A comparative analysis using cross sectional data found that companies embracing sustainability performance have significantly more directors with non-traditional backgrounds on their board. A trend analysis using longitudinal data found that sustainability performing as well as nonperforming companies is becoming more diverse. Findings from this study provides practical guidance to companies wishing to integrate sustainability into their governance structures in that companies should consider recruiting directors with non-traditional backgrounds.

M.Com. (Financial Management) / Electronic trading systems are increasingly implemented by stock exchanges instead of maintaining the traditional floor trading system. This study uses the Historical case study method to examine original minute book volumes from the archives of the Johannesburg Stock Exchange (JSE). The purpose of the study is to identify and examine the antecedents and consequences of the shift to an electronic trading system in the case of the JSE from 1989 to 2000. The study also produces an accurate historical account of the process that the JSE underwent to implement an electronic trading system, for use in further studies concerning the shift from floor to electronic trading. The main antecedents identified in the study were the JSE’s need to automate menial tasks; the need for increased trading capacity; the need for proper information dissemination; the need to dematerialise physical share certificates; international trends with regard to electronic trading; the T + 3 clearing and settlement standard; the establishment of South Africa’s National Payment System; legislative changes to the Securities Exchange Control Act; the need for market liquidity; and the need for investor protection. The main consequences of the abolishment of the floor trading system in favour of the electronic trading system were examined and grouped in four categories, namely the consequences for society, the consequences for the operation of the stock market, the consequences for the liquidity of the market, and the consequences for investor protection. The results of this study could be used as a foundation for a follow-up study to measure the effects of electronic trading implementation on the liquidity and efficiency of a stock market.

M.Comm. / The study assessed the conformance of the companies listed on the Johannesburg Securities Exchange Social Responsibility Index to the best practices regarding the composition of the board and its committees. The board of directors is regarded as an effective mechanism in solving the agency problem that is caused by the separation of control and ownership. The composition of the board and its committees, particularly the strong presence of independent non-executive directors, enable the board to effectively monitor the actions of executive management which minimise the occurrence of fraud and corporate failures. Companies that subscribe to good corporate governance practices which includes the composition of the board and its committees are regarded highly by investors. The study assessed the extent to which the companies listed on the JSE SRI index conformed to the corporate governance best practices. The sample consists of the constituents of the JSE SRI Index. The study found that not all companies are conformed to the corporate governance best practices regarding the composition of the board and its committees.

M.Com. (Business Management) / The capital structure of a company depends on the degree of debt used. Companies use debt to trade of tax shields and financial distress costs. At the margin where these equate, the optimal capital structure is reached. This optimal capital structure has been determined for each size of market capitalisation on the Johannesburg Securities Exchange. The capital structure theories of the static trade-off theory, pecking order and signalling model theory are highlighted in relation to company determinants such as size, asset structure, profitability and growth opportunities. A sample of 35 companies was used for each market capitalization for the period 2003 to 2009. The researcher uses a bar graph to display the average price to book value (P/BV) in sequential intervals for each degree of leverage in order to determine the optimal capital structure. The research shows that the optimum leverage for small market capitalisations was reached with a DIE ratio of 0.75-1 and for medium and large market capitalisations between 1.01-1.25.

Magister Commercii - MCom / A distinctive phenomenon on the JSE Securities Exchange (JSE) is the market segmentation between the resource sector and the financial and industrial sectors. Criticisms also arise from employing a capitalization-weighted (cap-weighted) index such as the ALSI index when the market is less than perfectly efficient. A study conducted by Vardharah and Fabozzi (2007) also suggests that a correlation exists between sector allocation decisions and the investment styles inherent in portfolios. The uniqueness of the South African stock market is that it is dominated by three major sectors, namely, the financial sector, the industrial sector and the resources sector. The goal of this research is to examine the application of sector influences on the JSE over the examination period 1 January 2003 to 31 December 2013. It is the contention that the cap-weighted ALSI index is price-sensitive and potentially mean-variance inefficient. The study therefore attempts to evaluate the relative meanvariance efficiency of alternative sector allocation strategies versus the cap-weighted ALSI as the optimal risky portfolio on the JSE. Two optimal long-only portfolios that maximises the Sharpe ratio are constructed and compared to the market proxy on the JSE over the examination period from 1 January 2003 to 31 December 2013. A longonly portfolio that comprises the JSE tradable sector indices and includes a cash allocation (risk-free proxy) and a long-only portfolio exclusive of the cash allocation are constructed. The research extends to cross-examine the inter-relationship between sector returns and the investment styles on the JSE using the Carhart (1997) four-factor model. The research further reexamines and updates the market segmentation phenomenon over the extended examination period from 1 January 2003 to 31 December 2013. The practicality of two sector-based multifactor APT models are examined and compared to the single-factor CAPM to determine which of the asset pricing models better explain JSE equity returns. A sector-based two-factor APT model proposed by Van Rensburg (2002) using the JSE sector indices FNDI and RESI as the sector proxies is reexamined and a sector-based three-factor APT model using the JSE tradable sector indices FINI, INDI and RESI as the sector proxies is explored. The optimal long-only portfolio with the cash allocation is found to offer the best meanvariance efficient allocation and the ALSI index represents the most mean-variance inefficient portfolio. The resource sector is found to be the worst performing sector and significantly influences the performance of ALSI. In terms of the style risk influences, the financial sector has a strong value bias and the industrial sector has a moderate value bias, small cap bias and a momentum bias. The resource sector, for the most part, is influenced by growth stocks and has a contrarian tilt. It is also found that the market segmentation phenomenon continues to exist on the JSE. Although the explanatory power of the three-factor APT model and the two-factor APT model is similar, the distinct advantage of the three-factor APT model is that systematic risks could be observed more closely by separating FINI and INDI in the asset pricing model.

Dissertation submitted in fulfillment of the requirements for the Master of Technology Degree: Public Relations Management, Durban University of Technology, 2012. / Corporate Social Responsibility (CSI) is an issue with a growing business value in South Africa. The increasing emphasis on CSI is affecting the relationship between organisations and their various stakeholders, such as investors, customers, vendors, suppliers, employees, communities and government. The stakeholders of an organisation play a vital role in the process of CSI planning and execution. There is a need to communicate CSI activities to stakeholders, as well as to monitor the flow and role of communication within the CSI context. While it is generally agreed that companies need to manage their relationships and communication with their stakeholders, the way in which they choose to do so varies considerably. Challenges in communicating corporate social responsibility do exist – for example, communication channels that are used in CSI, scepticism towards company messages and potentially hostile reactions from the media, complex community engagement processes, diversity of the audience, misunderstanding with special interest groups such as employees and government regulations. The diverse information requirements of different stakeholder groups also present special communication challenges, and these requirements are examined in turn. Given this background, the purpose of this study is to investigate communication in CSI practice. This study seeks to understand communication challenges facing CSI and communication channels that are used in CSI. Lastly, this study offers recommended best practices that can be applied in CSR communication. Although CSI is gaining a role as a strategic business function, however the literature review presented in this paper shows that CSI communication is still an area to be explored. One of the arguments presented in the literature review originate from Maignan & Ferrell (2004:17) that “Businesses cannot hope to enjoy concrete benefits from CSR unless they intelligently communicate about their initiatives to relevant stakeholders”. Communication challenges in CSI exist mainly in the process of transmission and receiving of messages from sender to receiver. The selection of the proper channels to disseminate information is also a challenge. These challenges arise mainly in rural and underdeveloped areas. In most instances, these communities lack infrastructure such as electricity and telecommunication which facilitate the dissemination of information. Commonly the communicator has to first do the necessary research in order to establish the most suitable medium for disseminating information to these communities. Illiteracy is also a major hurdle to communication in underdeveloped areas. This poses a challenge in that often messages have to be disseminated face to face, which can take time and requires expertise in communicating. The research method that was used to conduct this study is random sampling. A sample of thirteen organizations was drawn from the Johannesburg Securities Exchange (JSE) database of medium to large businesses that are actively involved in CSR programmes in South Africa. The findings in this study reveal that South African organisations are engaged in serious efforts to communicate and pro-actively integrate CSI as a strategic business phenomenon. These findings are significant to communications and CSI practitioners who wish to communicate with their stakeholders in CSI implementation. These findings will also benefit corporate executives who wish to engage in CSI communication. Non-Government Organisations (NGOs), Non-Profit Organisations (NPOs) and community organisations that wish to engage in CSI activities with corporate organizations, can also benefit from this study. In summary, CSI has grown from an ideology to a business reality and is now acknowledged as an important dimension of modern business practice. It is important that organisation examine their CSI communication in the context of the ever-changing business environment.

M.Com. (Business Management) / South African companies now realise that they have a responsibility to ensure that the natural resources as well as the people living within the communities in which they operate must be preserved and nurtured to ensure that future generations enjoy their benefits as much as the current generation does today. Companies are under ever-increasing pressure from both internal and external stakeholders to consider the environmental and social impacts of their operations and to mitigate these impacts. To this end, sustainable development (SD) has gained significant importance and the reporting of sustainability performance is the means by which companies communicate their efforts to their stakeholders. This study analyses the relationship between sustainability performance and financial performance to ascertain whether the ‘business case’ for sustainability exists in South African listed companies. There has been a substantial amount of research on the topic of SD and its implications for companies; the focus for this study however is on whether sustainability initiatives are important indicators of financial performance. Research conducted by Montabon, Sroufe and Narashiman (2007:998), assessed the relationship between corporate reporting, environmental management practices and company performance, however the unit of analysis was North American, British and Australian companies. This study will replicate the study of Montabon et al, with a focus on South African Johannesburg Stock Exchange (JSE) listed companies. In addition, comparisons will be drawn between developed world companies and companies within an emerging market. Pertinent literature on the topic has been reviewed and the results will be compared to the work of Artriach, Lee, Nelson, and Walker, J. (2010); Reed (2001) as well as Porter and van der Linde (1995). The results of the study reveal that an overall positive relationship exists between sustainability performance and financial performance thus, the research supports the notion that efforts to preserve and nurture environmental and human resources lead to improved financial performance.

Thesis (MBA (Business Management))--University of Stellenbosch, 2007. / ENGLISH ABSTRACT: Corporate governance in South Africa was institutionalised by the publication of the King Report on Corporate Governance in 1994. The King Reports were set up to ensure transparency and accountability within companies. The second King Report on corporate governance for South Africa was released in 2002 and compliance with certain aspects of the report made compulsory as a listing requirement for companies trading on the Johannesburg Stock Exchange in 2003. These requirements adopt an approach of comply or explain, and companies have to report on whether they comply with the recommendations of the second King report, or have to explain the reason for such non-compliance. In 2004 the Johannesburg Stock Exchange launched the SRI Index with the aim to facilitate investment in such companies that have adopted the triple bottom line approach to reporting. The Global Reporting Initiative (GRI) develops and disseminates globally applicable sustainability reporting guidelines which provide a framework for reporting on an organisation’s economic, environmental, and social performance. The first draft guidelines of the GRI were released in 1999 and updated in 2002. The third generation (3G) of the reporting guidelines were released in October 2006. The focus of this research project was to conduct a survey on all companies that are listed on the Johannesburg Stock Exchange All Share Index as well as the companies listed on the JSE SRI Index, with the aim of giving some insight into the development of corporate governance and sustainability reporting applied by South African companies. The findings of the 2006 study were compared to the findings of a similar study on compliance on integrated sustainability reporting done in 2004, and trends were identified, analysed and discussed. Specific focus was placed on the reporting on issues of climate change, biodiversity and compliance with applicable sector charters. The 2006 survey established that overall reporting on sustainability and governance issues has improved, that companies are publishing additional detail on the implementation of BEE and transformation policies and that corporate governance and ethical compliance have been entrenched in the companies’ corporate culture. Environmental management is the matter that was least reported on. / AFRIKAANSE OPSOMMING: Korporatiewe bestuur in Suid Afrika was geinstitusionaliseer deur die publikasie van die King Verslag oor Korporatiewe Bestuur in 1994. Die King Verslag was ontwikkel om deursigtigheid en aanspreeklikheid in maatskappye te verseker. Die tweede Verslag oor Korporatiewe Bestuur in Suid Afrika was vrygestel in 2002 met sekere aspekte van die verslag wat verpligtend is as ’n maatskappy wil noteer op die Johannesburgse Effektebeurs. Die verslag vereis van maatskappye om ’n standpunt in te neem van voldoening of verduideliking. Die maatskappy moet ’n verslag inlewer om redes te verskaf hoekom hulle voldoen aan die regulasies, of verduidelik hoekom hulle nie aan die regulasies van die tweede King Verslag voldoen het nie. In 2004 het die Johannesburgse Effektebeurs die SRI Indeks bekend gestel met die doel van fasilitasie vir beleggings in maatskappye wat die ’triple bottom line’ standpunt aanwend. Die ’Global Reporting Initiative’ ontwikkel en versprei globale riglyne vir ’triple bottom line’ verslagdoening – dit verskaf 'n raamwerk vir verslagdoening van ’n organisasie se ekonomiese, omgewings en sosiale optrede. Die eerste stel riglyne is vrygestel in 1999 en aangepas in 2002. Die derde generasie van die riglyne is vrygestel in Oktober 2006. Die fokus van die navorsing was alle maatskappye wat op die JSE All Share Indeks geregistreer is asook die maatskappye wat deel vorm van die JSE SRI Indeks, met die doel om insig te gee in die ontwikkeling van korporatiewe maatreëls en verslagdoening wat toegepas word deur Suid Afrikaanse maatskappye. Die resultate van die 2006 studie is vergelyk met resultate van ’n soortgelyke studie in 2004. Spesifieke fokus was geplaas op verslagdoening oor sake met betrekking tot klimaatsverandering, biodiversiteit en voldoening met toepaslike sektor verslae. Die 2006 ondersoek het bevind dat algehele verslagdoening verbeter het; dat maatskappye verdere inligting beskikbaar stel oor die implementasie van swart ekonomiese bemagtiging, transformasie beleid en korporatiewe bestuur; en dat etiese voldoening ge-integreer was in die maatskapy se korporatiewe kultuur.

Thesis (MBA)--Stellenbosch University, 2004. / ENGLISH ABSTRACT: This study examines the extent to which the industrial companies listed in the Johannesburg Securities Exchange complied with the disclosure provisions of the Accounting Standards AC101 when publishing their financial statements for the years 2000 to 2002. This study further evaluates the accuracy of the reporting of the salaries and wages as presented in their Value Added Statements. Published financial statements for the years 2000 to 2002 of more than 160 companies were analysed and evaluated. The study also identifies companies that did not disclose staff costs and directors' emoluments in their financial statements as well as those companies that reported the labour portion of their wealth distribution accurately in their Value Added Statements. / AFRIKAANSE OPSOMMING: Die studie dek die mate waarin genoteerde industriële maatskappye op die Johannesburgse Effektebeurs voldoen het aan die openbaarmakingsvereistes van die Rekeningkundige Standaarde RE101 ten opsigte van hul finansiële state soos van 2000 tot 2002 gepubliseer. Die studie let verder ook op die akkuraatheid van die verslaggewing van salarisse en lone in die Toegevoegdewaardestate. Gepubliseerde finansiële state vir die jare 2000 tot 2002 van meer as 160 maatskappye is ontleed en geëvalueer. Die studie identifiseer ook daardie maatskappye wat nie salariskoste en direkteursvergoeding in hul finansiële state geopenbaar het nie, sowel as diegene wat hul salarisse korrek in die Toegevoegdewaardestate openbaar het.

Magister Commercii - MCom / Motivated by the number of firms that migrate from the Alternative Exchange (AltX) to the JSE main board, this research undertakes to examine the role and the functions of the AltX and its contribution to the development of the small and medium-sized enterprises (SMMEs) in South Africa over the period from January 2004 to December 2015. This study seeks to explore the performance of the firms that have migrated from the AltX to the JSE main board, as well as the attributes that contribute to a successful migration. The study emerges by computing risk, return, risk-adjusted performance and liquidity statistics of the firms that migrated from the AltX to the JSE main board over the period of the research since their respective listings on the AltX. In the preliminary tests conducted in this study, the excess returns of the sample firms were regressed against the market risk premium using ALSI as the market proxy. It is discovered that the beta coefficients estimated by the regressions are statistically insignificant. This indicates that the firms listed on the AltX have insignificant correlation with the firms listed on the JSE main board. Therefore, the ALSI could not be used as a performance benchmark for the sample firms in this research. Subsequently, the research evaluates the market response before and after the announcement date and the actual migration date of the firms that have migrated from the AltX to the JSE main board. The reasons why this research investigates the impact of announcement and actual migration separately is due to the observation that the period between announcement date and migration date is usually more than a month and investors might have different reactions towards these two mentioned events. Moreover, this is the first research that has investigated the impact corporate reaction on both migration announcement date and the actual migration date of the firms from the AltX to the JSE main board. The results reveal that there are significant average abnormal returns and average abnormal turnovers reaction around migration announcement date/actual migration date. The findings suggest that both the migration announcement and actual migration of the firms from the AltX to the JSE main board have produced significant abnormal returns. Moreover, the research evaluates the performance of the firms that have migrated from the AltX to the JSE main board against their comparable peers. The performance evaluation is conducted in two folds. Firstly, the evaluation is conducted in order to assess the financial position of the AltX sample firms before their migration to the JSE main board. Secondly, the post migration performance evaluation is conducted in order to classify each of the sample firms either as a success or as a failure after their migration to the JSE main board. The results reveals that, out of 20 sample firms only 13 firms have been categorised as successful post their migration from the AltX to the JSE main board, while the remaining 7 firms are categorised as unsuccessful post migration. Finally, this research investigates the attributes that differentiate the AltX firms that are likely to be successful and those that are unlikely to be successful after their migration to the JSE main board. To achieve this, Multivariate Discriminant Analysis (MDA) model developed by Altman (1968) is employed. The results reveals that, the model is able to classify 90% of the original cases and 85% of the cross-validated cases perfectly. Moreover, the model has identified net profit margin, current ratio and return on capital invested as the most important financial ratios in distinguishing the successful firms from unsuccessful firms post migration from the AltX to the JSE main board. / 2021-04-30