Thesis (MBA)--Stellenbosch University, 2005. / ENGLISH ABSTRACT: Picture the scene: It's Monday morning and the main article in Business Day is
headlined ·Company X Board is under investigation for not diclosing the truth about
its financial wellbeing".
In recent times life has been very messy and difficult for many boards, but many of
them are in a better position to direct their organisation and to add real shareholder
value.
A sequence of events triggered board changes in organisations. Many boards have
realised over the last few years that the rules for direction-giving have changed. The
need for accountability is high, the status quo needs to be challenged and sound
strategic thinking is critical in their decision-making. Boards need to establish a
performance culture with the correct people, equipped with the necessary
competencies and capabilities.
Leading shareholders demanded board appraisals to evaluate the continuous
underperformance of board structures and processes. Some of the questions asked
are, if the board is effective as a group to meet the organisation's purpose and if they
can monitor the external and internal environment effectively. It is also asked whether
the skills and competencies of individual members are sufficient to enable them to
fulfill their risk assessment and decision-making director roles sufficiently.
Board members must understand their roles to evaluate their personal development
and board needs. Boards must ensure a process for appropriate development plans
for their individual directorial duties. They need to define which essential strategic
decisions are made during the various administrative and information sharing
meetings.
The annual cycles of boards are important, as is the need to check that all
accountabilities are on track. This feedback does not merely concern financial
matters. It is important to evaluate strategic decisions to ensure that they are
carefully measured against the targets set at the beginning of the year.
Many boards have adopted a triple bottom line approach, measuring their financial
performance, physical environment and social responsibility reports against agreed
targets. These targets need to be incorporated in a board scorecard which will
graphically depict the board's value-adding activities. These scorecards will give any
board an indication of its effectiveness.
Boards have accepted evaluation processes and have gone through a steep learning
curve in developing and implementing them. There are numerous approaches to
evaluate board performance. Each board must decide whether it is better to do a
peer level evaluation, outside evaluation or follow the bottom-up approach. Formal
board evaluations have given boards more credibility and have helped to identify
gaps in the development of board members. Boards must be developed to become
more competent at direction-giving, ultimately in order to contribute to the
effectiveness of the organisation.
Boards must continue to drive the organisation ahead, while keeping it under control.
Board members must realise that their ultimate tests are business effectiveness, in
that they must add shareholder value to the balance sheet, and business efficiency,
referring to the improvement realised on the profit and loss accounts. / AFRIKAANSE OPSOMMING: Stel jouself voor : Dit is Maandagoggend en die hoofartikel in Business Day is as
volg: "Daar is 'n ondersoek gelas na Maatskappy X se kredietwaardigheid rakende
hulle finansiele welstand."
Direksies oor die laaste paar jare was in 'n warboel. Ons vind tans dat organisasies
beter gelei word en dat welvaart geskep word vir alle aandeelhouers.
Heelwat faktore het aanleiding gegee dat direksies verander het. Die reels om
leiding te gee het verander: direksies moet meer aanspreeklikheid neem, die status
quo word meer bevraagteken en goeddeurdagte strategiese denke is almal
bydraende faktore. Direksies moet streef om 'n prestasie-kuItuur te vestig met lede
wat oor die nodige vaardighede en vermoens beskik.
Aandeelhouers dring aan dat direksies se prestasie beoordeel moet word. Tipiese
vrae wat gevra word is: is die direksie effektief as 'n groep om die organisasie se
primere doel na te streef en kan hulle die interne en eksterne faktore effektief
monitor? Individuele direksielede moet oor die nodige bevoegdhede beskik om
voldoende risk-analise en direksie-besluitnemings uit te voer.
Direksielede moet hulle onderskeie ontwikkelingsrolle verstaan. Dit moet duidelik
gedefinieer word watter kritiese strategiese besluite word by watter vergaderings
geneem.
Jaarlikse siklusse vir direksies is belangrik, dit stel hulle in staat om te evalueer of al
die strategiese besluite wat geneem is, uitgevoer is teenoor die ooreengekome
doelwitte. Direksies evalueer meestal hulle finansiele prestasie, fisiese omgewing en
sosiale verantwoordelikheid teenoor ooreengekome doelwitte. Hierdie doelwitte word
meestal ingesluit in die organisasie se telkaart. Die doel van die telkaart is om vir
direksies 'n aanduiding te gee of hulle effektief is of nie.
Baie direksies het een of ander vorm van evaluasie geimplimenteer. Daar is verskeie
benaderings om direksie-prestasie te evalueer. Elke direksie moet self besluit
watter benadering is die mees geskikte - eksterne evaluering of "peer to peer"
evaluering. Formele evaluering gee meer kredietwaardigheid aan die proses en help
ook met die identifisering van ontwikkelingsmoontlikhede. Direksies moet fokus op
ontwikkeling sodat hulle meer bevoeg kan raak om beter leiding te gee in die
organisasie.
Direksies moet onthou dat die bepalende toets is besigheideffektiwiteit, waar
aandeelhouer-waardetoevoeging gemeet word en of daar verbeterde
besigheidsdoeltreffendheid op die wins en verliesrekening is.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/50305 |
| Date | 03 1900 |
| Creators | Van Heerden, Lodewyk |
| Contributors | Esterhuyse, Willie, Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 65 p. : ill. |
| Rights | Stellenbosch University |
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