Rating corporate governance: the delicate balance between disclosure, compliance and
performance
Daniel MalanHead: Unit for Corporate Governance in AfricaKPMG Special Advisor: Ethics and Governance
Unit for Corporate Governance in Africa
• Our mission– To develop both the compliance and the performance aspects of
directors’ attitudes, knowledge and skills, as well as the link between corporate governance, business ethics and total organisational performance
• From our manifesto– Effective corporate governance is the key to building stable and
healthy institutions in a nation. These institutions include listed and unlisted companies, central government departments and agencies, state-owned enterprises, regional and local government organisations, family businesses, charities and non-profit organisations
PIC Corporate Governance Rating Matrix
• Joint venture: PIC & Unit for Corporate Governance in Africa
• Developmental tool, aimed at assisting companies to improve their corporate governance performance and reporting
• Will have an impact on PIC investment decisions• 2009 – Pilot Version
– Top 40 companies– No public disclosure of results
The Team
• Experts– Bob Garratt– Philip Sutherland– Tom Wixley– Kwanele Gumbi
• Unit– Thina Siwendu– Daniel Malan– Glen Davison– Matseko Mohlaba– Anna Yortt– Adrian Bertrandt
• PIC– Deon Botha
• Issue specific input– Stephen Davies (Yale)– Paul Lee (Hermes EOS)– Jako Volschenk (USB)
• Statistical validation– Martin Kidd (Centre for
Statistical Consultation, Department of Statistics and Actuarial Sciences, University of Stellenbosch)
The Model
The Matrix
The Way Forward
• 2010– Top 40 companies– Changes based on experiences during pilot– Changes based on King III– Possibly public disclosure of results
• 2011 and beyond– Public disclosure– Top 100 companies– Comparative information
The learning board basic framework
Business Brain
Ext
ern
alIn
tern
al
Long term
Accountability
Board conformance
Supervising management Strategic Thinking
Board performance
Policy formulation
Source: Bob Garratt (Thin on Top)
Short term
The learning board basic framework & King III
Boards and Directors
Ext
ern
alIn
tern
al
Long term
Accountability
Board conformance
Supervising management Strategic Thinking
Board performance
Policy formulation
Short term
Audit committeeIntegrated reportingCompliance
Stakeholder management
Ethical leadership andCorporate citizenship
RiskITInternal audit
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