CHANGING THE RULES OF THE GAME:

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Januar y | Februar y | March 2018

CHANGING THE RULES OF THE GAME:NEW WAYS OF DOING BUSINESS

Can boards minimise theirbusiness risk exposure?

HOW TO FUTURE-PROOF YOUR BUSINESS

MANAGING COUNTRY RISK – left unguarded and ungoverned by boards

SHAREHOLDERS, GOVERNING BODIES AND MANAGEMENT roles and responsibilities

Governance challenges of NPOs

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Introducing the King IV appThe King IV Report app gives you easy access to the entire King IV Report on Governance in South Africa, 2016 including the sector supplements. Search functionality makes access to governance best practice easier. Also included in the app are the relevant acts, codes and guidelines referred to in King IV as well as historical King reports, namely King I, II and III. No more carrying around text books to know what the roles and responsibilities of governing bodies are. Every person tasked with governance duties should have this app.

Benefits of downloading the App:• Offline access to King IV Report

• Easy navigation through King IV Report

• Interactive key word search

• View and download related legislation, guides and codes as well as historical King reports

• View and download Practice Notes

Android – Only available on the Galaxy Apps store with the pictured icon and not on the Google Play store

IOS – Available on the App Store

Here is a link to the app online (FYI):https://itunes.apple.com/za/app/king-iv-report/id1145317905?mt=8

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CONTENTS4

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02 From the IoDSA by Angela Cherrington

04 A whole new ball game by Rodney Weidemann

12 How boards can minimise their business risk exposure by Lynette Dicey

14 Managing country risk by Claude Baissac & Linda de Beer

16 Future-proofing the organisation by Tasos Calantzis

18 Non-profit sector governing body challenges by Tanya Nassif

20 Steinhoff fraud scandal an accounting irregularity? by Dudu Msomi

22 Inclusive (digital) growth – Local solutions to global problems by Priya Thakoor

24 IoDSA Case Study competition winners

30 FAQs: Protection of Personal Information by Parmi Natesan, Tanya Nassif & Vikeshni Vandayar

32 Lessons from the boardroom by Richard Foster

34 IoDSA Events

36 Lifestyle: 20 surprising facts about coffee by Amanda Hawkins

37 Lifestyle: 8 awesome ‘coffices’ in Joburg

38 Book reviews

39 Wine: Wines you can trust by Jeremy Sampson

40 Road Test: Velar sets the pace by Wynter Murdoch

42 Travel: 4 hours in Seoul by Kate Kennedy

44 Insight: 7 Essential habits of successful business owners by John Jantsch

Publisher: Richard Lendrum Editor: Angela Cherrington Managing Editor: Debbie Bassa [email protected] Layout: Nadette Voogd Production Manager: Mabel Ramafoko

Directorship is published by Future Publishing (Pty) Ltd. Opinions expressed in Directorship are not necessarily those of the publishers. Permission to re-publish any article or image or part thereof must be obtained in writing from the publisher. © Future Publishing

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Introducing the King IV appThe King IV Report app gives you easy access to the entire King IV Report on Governance in South Africa, 2016 including the sector supplements. Search functionality makes access to governance best practice easier. Also included in the app are the relevant acts, codes and guidelines referred to in King IV as well as historical King reports, namely King I, II and III. No more carrying around text books to know what the roles and responsibilities of governing bodies are. Every person tasked with governance duties should have this app.

Benefits of downloading the App:• Offline access to King IV Report

• Easy navigation through King IV Report

• Interactive key word search

• View and download related legislation, guides and codes as well as historical King reports

• View and download Practice Notes

Android – Only available on the Galaxy Apps store with the pictured icon and not on the Google Play store

IOS – Available on the App Store

Here is a link to the app online (FYI):https://itunes.apple.com/za/app/king-iv-report/id1145317905?mt=8

Non-Executive Directors

Prieur du Plessis (Chairman),

Ntuthuko Bhengu, Sana-Ullah Bray,

John Burke, Yolan Friedmann, Sathie

Gounden, Patrick Kabuya, Pumla

Radebe, Muhammad Seedat (Lead

independent director),

Louisa Stephens.

Executive Directors

Angela Cherrington (Oosthuizen)

(Chief Executive Officer), Parmi

Natesan (Executive: Centre for

Corporate Governance).

Offices

National Office

[email protected]

(011) 035 3000

www.iodsa.co.za

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Welcoming in the New Year

@angelao28

Connect with the IoDSA on social media

@The_IoDSA#DirectorshipMag

www.facebook.com/ TheIoDSA/

Institute of Directors in Southern Africa

From the IoDSA

I t is with a degree of both anticipation and trepidation that the business world welcomes

2018. The year that was 2017 concluded on a positive note with the election of Cyril Ramaphosa as the new president of the ANC and with that, the hope that South Africa is at last heading for greater political stability, economic growth, and an end to crippling corruption and state capture.

Our theme for the first quarter’s issue of Directorship is ‘A new way of doing business’ and as such, we have included a host of interesting articles on the topic, all of which in some way relate to different ways of thinking – rather apt as we commence a new year of work.

Our first feature article, ‘A whole new ball game’ delves into the ways in which the shifting sands of politics, economics, technology and the environment all impact on how business is done. In the past two years, these key areas have changed so significantly that they have effectively

rewritten the rules of the game.

To this end, the changing facets of the modern world are having a massive effect on business. A confluence of key areas of impact have fundamentally altered the way business needs to be done, and the manner in which individuals need to change to be relevant and effective in the challenging times we live in. Today, new approaches are being determined and rules are being rewritten rapidly in terms of everything from stakeholder engagement to the global economy, and from the political arena, to the rapidly evolving technology changes the world is experiencing, and on to the increasing focus on the environment.

In this climate, there is perhaps a new role for the board of directors – a more active one in which they are able to minimise and manage the exposure to business for the organisations on which they serve.

In fact, overseeing risk is one of the most fundamental duties of the board. And while the risks

faced may differ from company to company, common potential risk factors can include anything from cyber security, resignations, product faults, and recalls to bribery, corruption and environmental threats.

Moreover, in a business environment where there is a greater call for innovation than ever before, it is starting to fall to directors to manage the risks associated with business innovation – and what’s more have the relevant

experience and knowledge that encompass new ways of thinking and doing things. In fact, it could be argued that in this environment, the failure to innovate and take risks could be the biggest risk a company faces. Read more on the topic in our article on the role of the board to manage and minimise risk.

Our article on ‘Managing country risk – left unguarded and ungoverned by boards’ investigates the

election of Cyril Ramaphosa as President of the ANC. Ideally, this will signify that the end of a decade of mismanagement and abuse of state resources is near. The turnaround for South Africa, once a promising country turned into a disreputable laggard, appears tentatively close. This is the current consensus in the private sector. The sudden rise of the rand to its highest level against the dollar since mid-2015 testifies to this.

But is such optimism warranted?

Finally, in our piece on ‘Future-proofing the organisation’, Tasos Calantzis, CEO, of SuperUltra talks about how the long-term sustainability of most businesses depends on a continued ability of the organisation to adapt to change. The increased rate of change in consumer demands, technology, working environment, regulation and competitive landscape makes this adaptability as important as good management and good citizenship.

Angela CherringtonChief Executive Officer

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A whole new ball game Rodney Weidemann

The shifting sands of politics, economics, technology and the environment all impact upon how business is done. In the past two years, these key areas have changed so significantly that they have effectively rewritten the rules of the game.

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T he changing facets of the modern world are having a massive effect on business. A confluence of key areas of impact have

fundamentally altered the way business needs to be done, and the manner in which individuals need to change to be relevant and effective in the challenging times we live in.

Today, new approaches are being determined and rules are being rewritten rapidly in terms of everything from stakeholder engagement to the global economy and from the political arena, to the rapidly evolving technology changes the world is experiencing, and on to the increasing focus on the environment.

Playing politicsFrom a political perspective, there has been a major shift in the status quo both globally and locally in recent times. We have seen the election of Donald Trump as US president, UK citizens voting for Brexit and the recent shift in local political power at the ANC elective conference. With such significant changes occurring in the political arena, the ability for businesses and individuals to adjust to the new rules with flexibility, and by taking proactive steps, is essential.

According to Busisiwe Khaba, a political analyst at Monash South Africa, the ANC took some rather radical decisions in terms of policy outlook at the recent conference. A good example was the proposal that was adopted relating to ‘land expropriation without compensation’.

“It will be interesting to see how this will impact on the social cohesion and race divide in South Africa, given that most of the land is still owned by the white minority. Should this policy be adopted, it may alter race relations in South Africa. It will also be incumbent upon government to ensure that the roll-out is systematic and planned, in order

to ensure minimal disruption to social cohesion and nation building,” she says.

“The other announcement that recently caused some consternation was President Jacob Zuma’s free higher education initiative. This may also cause problems, by plunging the country more deeply into financial crisis if it isn’t adjusted one way or another. Looking at these recent announcements, it becomes obvious that organisations need to clearly understand the policy implications for their business and vertical market, and what impact these changes may have.”

Although it is very important to be able to adjust to the changing times, adds Khaba, businesses that are operating in SA and the continent at large need to be sensitive and take into account the socio-economic, political and trade impact of the countries in Africa. For instance, the intense use of technology in the market may benefit some western countries. However, it will most likely have a negative impact on job creation in South Africa, so finding a good balance between advancing technologically, while still meeting the needs of the poor is critical, given the socio-economic prospects of SA.

“I am of the view that business also needs to assist government in meeting its targets by doing all it can to facilitate the absorption of unemployed graduates. This will assist to alleviate poverty in South Africa.”

“Looking further afield, the US is still a prominent role player due to its economic ‘muscle’ and global political control. The concern is that President Trump is most likely going to introduce radical policies, which may negatively impact on trade. In addition, the increasing resistance towards refugees in the US and many other Western countries will mean more intensified border control. This will, in turn, hamper the growth of businesses that trade globally.”

The other thing businesses need to take

into account, she continues, is that China is on the rise, and some economists even predict that it has (or will soon) take over from the US. One thing that is clear is that China is now on the centre stage and cannot be ignored by business.

Looking at the local environment, it is clear we have many issues around corruption, state capture and collusion, all of which impact on business.

“When it comes to issues like these, it is incumbent upon business to conduct its affairs in an ethical manner, and it is imperative that organisations practise good governance. Proximity and close relationships with relevant political figures may be good for business, but these should be highly regulated and must always stay within ethical boundaries, lest you end up with a Gupta or Steinhoff scenario occurring,” states Khaba.

Khaba points out that there is some good news, following the election of Cyril Ramaphosa as the new ANC leader, as he seems to be a refined individual, one who has extensive experience in business.

“This could be positive in that it boosts investor confidence, although my concern remains that he may be an individual who has lost touch with the grassroots communities, meaning he may be less inclined to advance the interests of the poor. He will certainly need to assert himself and get in touch once again so to advance the interests of all South Africa’s citizens and not just business.”

“Obviously his win was not with an outright majority, which indicates that there are some intraparty politics and negotiations he will still have to undertake. The biggest concern for business here is that such party-political challenges may detract from the critical need to transform South Africa’s ailing economy. It is for this reason that it is imperative that business focuses on working closely with government over the next few months, to maintain the focus needed to achieve this.”

"I am of the view that business also needs to assist government in meeting its targets by doing all it can to facilitate the absorption of unemployed graduates. This will assist to alleviate poverty in South Africa."

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Money, money, moneySpeaking of the economy, the global economy still feels the reverberations of the financial crisis of 2008, which – in turn – impacts upon businesses and the rules they play by.

Schalk Barnard, Africa Markets and Business Development Director at EY, points out that the most significant shift in a post global financial crisis world is the fundamentally greater regulation of the financial services sector. ‘Too big to fail’ became a common theme immediately after the crisis, as governments were eager to prevent a similar systemic risk from developing. This has pressured the financial services sector’s ability to provide liquidity and credit, as banks restructured themselves appropriately for a new world order.

“Only recently have banks re-opened the credit taps, and this is now fostering stronger growth on the whole. There are still concerns about whether regulation is now sufficient to allow the financial system to endure a further shock,” he states.

“Locally, South Africa has never really recovered from the global financial crisis, partly due to a subsequent commodity price slow-down, partly due to indecisive policy formation, and partly due to inertia in implementing policy. As an example, the mining sector is considerably smaller than it was prior to the global financial crisis, and this has had a major impact on increasing the unemployment rate.”

On the other hand, adds Barnard, China’s role has been very beneficial to the world economy. As much as it has played the role of being the world’s factory, it has also been a major importer – especially of commodities, as its insatiable demand for new cities to house its rapidly urbanising population has demanded. Commodity exporters have therefore benefited extraordinarily from this need, including South Africa, Brazil, Australia and all of the oil exporting countries.

Looking ahead, he says that from a business perspective, companies need to recognise that Africa has an opportunity to become the world’s manufacturing hub.

“The continent will benefit from the

‘demographic dividend’ in the next few decades – where the working age population exceeds the dependent portion of the population – as Africa has the largest proportion of young people in the world. This means it also stands to benefit from the fact that the rest of the world’s population is maturing. But in order to do so, it will need to invest heavily in education and skills training in areas where jobs will be created. That means a strong focus on the digital economy and its technology components.”

Up until now, Africa’s real economic challenge has been its inability to improve productivity levels, with too many still people dependent on subsistence agriculture. So in order to benefit from tomorrow’s technologies, the continent will require an upfront change in the agriculture/agri-processing sector. More people need to shift from primary agriculture towards secondary and tertiary activity.

Asked about the best means of addressing inequality, Barnard says that this is through poverty reduction, which is in turn best addressed via creating employment opportunities.

“Most of the Asia-Pacific region has seen falling income inequality levels, as greater numbers of people join the labour force. As a result, governments that have had most success in reducing inequality have focused on business-friendly policies, reducing red-tape, providing tax incentives – especially for employees – and creating an environment that attracts capital.

“From a business perspective, enterprises need to be aware that the economy of the future is going to be dominated by the Fourth Industrial Revolution. This digital revolution will be driven by a shift towards digitalisation, robotics and connectivity,” he adds.

That means that skill requirements are going to be entirely different to the past. Many current jobs will fall away, and a recently quoted statistic has it that more than 50% of new jobs that will flow from this new era have, in fact, yet to be created.

“Nonetheless, we have already seen some of the types of opportunities that will be created by the new information age, such as those digital technology start-ups that are changing the way consumers access finance, healthcare, do their shopping and make payments. Data and

Growth through globalisation

Globalisation has had an incredible impact on growth. It has allowed the developed world to move away from being the world’s manufacturer, instead becoming a provider of high-end technical services and consulting. Manufacturing has largely moved to China and other parts of Asia-Pacific. That, in turn, has provided major cost advantages to western consumers, as the price of labour is considerably lower in the emerging economies, allowing cheaper goods that stimulate growth. On the whole, this has been quite successful, as it lowers the cost of products overall. But there are complications, most noticeably in agriculture, where countries tend to get protectionist and go overboard in attempting to protect their home-grown agriculture markets.

Business

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technology skills will become increasingly critical, and being connected to the digital world will become essential.”

“Finally, it is worth noting that in this digital revolution, any and all rules may change. Even simple things that have been around for many centuries, like currency, may become extinct in the near future, as digitally encrypted currencies like Bitcoin begin to play an increasing role in the payments space.”

Digital disruption changes the gameThe digital revolution is something that is already impacting on the world significantly, not only in terms of dominating the economy of the future, but also in respect of how it will change how business is done, how senior executives will approach the market, and how new and unexpected competitors will arise to challenge established enterprises.

Mark Walker, Associate Vice-President for sub-Saharan Africa at International Data Corporation (IDC), suggests that those who do not change their business as the technology itself evolves will put their companies in significant danger of being excluded from the mainstream of business.

“For example, a key component of business differentiation today is customer experience. Thus, those enterprises that are not using technology to facilitate greater efficiencies internally or externally, or to reduce cost and simplify, will soon find themselves behind those that do choose to embrace technology,” he suggests.

“Technology also enables you to scale very quickly. If you’re not using technology to help yourself reach the customer better, you are also missing out on the ability to scale and introduce efficiencies in your organisation and you’re not opening yourself up to new market opportunities.”

Walker points to a major local online retailer and its Black Friday sale as an example. He says that it had its best sales ever on that day, with a 280% increase in site visits, generating R87 million in gross merchandising value on the day. That tells the retailer that customer experience and knowledge that you can transact with them online, plus the convenience factor, are all very important factors now, and people are adopting this channel aggressively.”

Clearly, in the consumer retail

Remaining successful in a digital future

There are several technology evolutions that organisations will need to adopt and run with if they are to remain at the forefront of their chosen industry, whatever vertical market they operate in.

The first technology they must consider is mobile. Today, everything is accessible via mobile, and organisations must therefore ensure that everything they do has a mobile-centric view. Everything that can be done via mobile, should be.

From a corporate perspective, other key technologies are cloud and analytics. Once they have those basic technologies in place, they must look at what accelerators can be used on top of that, which might include the likes of artificial intelligence and the Internet of Things. Wrapped around all of this is a very strong security layer. Many companies are now reconsidering how much data they keep and how they retire their data, because the more data they keep, the higher their risk, unless they secure that data very well.

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environment, the rate of adoption of online business is spiralling upward, continues Walker. Of course, if companies don’t live up to their promises, they can also do themselves huge damage. As online becomes prevalent, companies that are not servicing their clients properly will be punished for it, he says.

“Remember that bad news travels fast, and if you’re not servicing your customer, you can do tremendous damage to your company. Yet if you use technology to its full potential, you can maximise your customer experience, increase your customer reach, and at the same time improve your internal processes and manage costs more effectively.”

Walker says that technology, perhaps more than any other thing, is causing the old business rules to be altered, pointing to companies like Uber and Airbnb, which have quite literally torn up the old rulebook in respect of how business should be conducted.

“These companies are not saying we’ll build a better mousetrap and customers will come. They’re turning that model on its head and focusing on what the customer wants. They are also not just looking at physical or virtual products, but rather focusing on what friction exists in getting the goods or service to the customer. Then they focus on lessening or removing that friction in some way.”

“Uber, for example, takes the friction and uncertainty out of the transaction of getting transport, creates reliability, and makes it easy for people to use. They focus on what the customer wants and how they can reduce the friction to get the goods or the service to the customer in the simplest manner and at the best price.”

He says that the new rules of the game are having a significant impact on those organisations that have entrenched infrastructure and legacy systems. While these systems still serve a purpose, Walker suggests that at the same time, businesses must be mindful of what the future holds, and position themselves to take advantage of that.

“The question is, how do they do that? There are two aspects here. One is to look at how they can improve their existing bricks and mortar operations through the wise use of technology, in order to enable them to manage costs better, get real-time reporting, manage stock and inventory better, and become more efficient.”

“At the same time, they must look forward and ensure they are positioned for the future, by digitising their business and making themselves more efficient and customer-centric. They need to look at how they structure their digital strategy for the company and how they can innovate new digitally-based products and monetise information. Many organisations are sitting on vast amounts of information about their customers - including things like buying trends, preferences and spending habits – and they need to apply that information internally to provide a better service to their customers.”

One thing that is worth remembering, he adds, is that with the complexity of technology, it is critical to have a very good understanding thereof, and how this impacts on the business. A C-level executive, possibly along the lines of a Chief Digital Officer (CDO), is a very good idea. Such a person must have very strong executive abilities, commercial influence and strong C-level relationships within the organisation, as well as with across others in industry.

“For a CDO, either a strong operations or marketing background is ideal, and they must have a very strong grasp of the mechanics of their organisation – from production, right through to customer delivery, and be able to identify where technology can make a difference. Then, in using the areas that can be improved by technology, they must be able to devise a coherent strategy that they then drive within the organisation, so that all these fronts are covered,” states Walker.

When nature callsConcern and care for the environment is something that has really come to the

fore over the last decade, and the need to find environmentally friendly approaches to everything from power generation, to manufacturing, to logistics, has had a major impact on the way business is done.

Jayne Mammatt, partner in charge of sustainability and climate change at PwC, indicates that when it comes to being environmentally conscious, businesses can be a lot more innovative in respect of how they approach this.

“By developing new solutions, services or products, or by revising the way existing ones are manufactured or delivered, or even by looking to create new markets for what you do, you can reduce the negative impact you have on the environment. Moreover, by doing something like attempting to reduce the amount of waste a process produces, you can positively impact your costs, as such an approach means you are inevitably driving greater efficiencies within your business,” she says.

“Implementing renewable energy sources is another way of going ‘green’. For some time, there has been a view that such an investment is costly to a business, but as these technologies – like solar, for example – continue to develop, so the return on investment (ROI) happens increasingly quickly. Perhaps most importantly, investment in sustainable solutions is no longer merely a ‘nice to have’ - it is rapidly becoming a fundamental approach to business success.”

She suggests that there is a growing realisation that the circular economy is the way forward. Such an approach focuses on the idea of taking the environment and your impact on it into consideration, and working to reduce this impact while creating increasing business value. A good example here would be those organisations whose operations create organic waste, and who then use this waste to generate electricity.

“In South Africa, of course, we have to consider the impact that moving from coal-fired power to renewables may have on employment, but the reality is that while such a move may result in certain

Business

"By developing new solutions, services or products, or by revising the way existing ones are manufactured or delivered, or even by looking to create new markets for what you do, you can reduce the negative impact you have on the environment."

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skills becoming redundant, it also opens up new opportunities for re-skilling. What we need is for organisations and society to respond to these changing requirements by viewing such change as an opportunity to deliver training and skills to workers from outdated operations, like coal. In this way, they will be able to assist them to become productive workers in the new, environmentally friendly and low-carbon economy.”

The development of low-carbon economies, adds Mammatt, is critical in today’s world, where reducing carbon is not just important, but is likely critical to humanity’s long-term survival.

“It is about fundamentally changing the way we do and consume things, in order for us and the planet to survive. While many businesses realise that the new rules of the game demand a focus on environmental sustainability, those that don’t will soon find their costs increasing and their competitiveness dwindling. Moreover, as consumers become more environmentally aware, they will stop buying products from, or working with, those organisations that fail to change their approach to this subject.”

To undertake such change, she explains,

companies need to first understand what impact their business has on the environment - in other words what it uses, creates and destroys in the process of doing business – and this needs to be across its whole value chain.

“Once this is known, one can begin to create a circular economy from the start, designing new products from the outset to be more easily recycled or reused. Collateral to this is ensuring the organisation is aware of things like the carbon it produces and the water it uses or pollutes. Such understanding should lead directly to improvements in the value chain and changes in business processes that will ultimately be beneficial to both the environment and the company making the changes.”

The final aspect of the change is to look to the future of the business, and consider how it will evolve moving forward. For example, the enterprise may currently produce a specific product, but the plan may be to evolve to delivering services instead. If you are aware of where you want to be in five, ten or even twenty years, says Mammatt, you can work your sustainability blueprint into this future plan from the outset.

“When it comes to environmental responsibility, we are definitely starting to witness genuine change, as people can now visibly see the damage that is occurring and are thus more eager to prevent things getting further out of hand. There are also a lot of businesses doing good things, but there is no doubt that we always need more. While it is understood that humans will always have an impact on the environment, the focus must be on minimising this, as well as restoring and replenishing what we do destroy.”

“From a business perspective, I think what will have an enormously positive impact moving forward will be for us to see more shareholder and investor activism around environmental issues. It is vital that investors look to the long term and ask the right questions about the company’s environmental strategy, as this will play a big role in helping to determine the organisation’s behaviour moving forward and ultimately its long term viability.

Engaging in a deeper fashionIn today’s business world, stakeholder engagement is critically important, says Reana Rossouw, Director at Next Generation Consultants, a business that focuses on the social innovation, investment and development sectors on the continent.

“Simply put, business is part of the ecosystem that they operate in, meaning they can no longer make decisions that affect clients, suppliers and employees, without first consulting them. The day has come and gone where merely pushing information to their stakeholders would suffice. And to prove the point, stakeholders are letting businesses know that they are not happy with simply being informed, that they instead want to be consulted on issues that affect them, that have an impact on their lives and livelihoods, and they want to be part of a process where their input is considered and taken into account,” she says.

“This is not just merely my opinion. It is supported by numerous guidelines, standards, frameworks and governance and reporting requirements. Consider King IV, the Companies Act, industry specifications such as the International Council for Metals and Mining (ICMM) or the Forest Stewardship Council (FSC) to name a few. You cannot become a member of any of these organisations if you have

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not conducted stakeholder engagements.”In addition, points out Rossouw,

one cannot produce a sustainability or integrated report without having consulted one’s stakeholders. In fact, she says, stakeholders decide what your most material issues are – as opposed to the companies themselves – and you have to report on how you have considered their reasonable expectations and have responded to their requests and expectations.

“In South Africa, it is in fact a governance requirement to do this, hence the advent of the social and ethics committee that must take responsibility for stakeholder engagement. The ‘rules’ of stakeholder engagement do, of course, differ according to industry and geographic position. This is especially true in Africa, where we have unique challenges for engagement, including language, literacy and cultural diversity. Also, unlike in other parts of the world, we cannot always use technology-based engagement platforms and tools, like electronic surveys,” she adds.

“In heavily regulated industries – like mining – engagement is often as important as profit. Remember, you cannot even get a licence to operate until you have engaged and can provide evidence thereof, as it is an industry requirement.”

The same goes for high-impact industries like oil and gas, she points out, stating that engagement is directly linked to your impact on society and the environment. Again, this industry has a specific standard for engagement.

“Consider companies operating across different countries – these multinationals have to adhere to the OECD guidelines for companies operating in emerging markets, and it is very clear how indigenous stakeholder voices needs to be incorporated in company strategies.”

Of course, in today’s world, faced with challenges like digital disruption, 'fake news' and social media backlash, there are many new issues businesses have

to overcome on their way to ensuring effective stakeholder engagement.

For example, explains Rossouw, many companies today are completely under-resourced when it comes to dealing with social media backlash. A lot of companies do not understand the immediacy of social media, and the rapid impact that it can have on a business if it is not dealt with equally rapidly and at scale.

“Businesses are completely unaware and unprepared to deal with criticism, crises, and levels of engagement, as well as the detail and response that is usually required. Companies completely underestimate the level of engagement that is happening about them and around them.

“To deal with this new world, enterprises need to ensure they have organisation-wide crisis communication teams, which must include senior executives who are dedicated to engagement. Too many organisations currently have such engagement siloed according to department, and delegated to mid-level executives. This leaves the team unprepared, uncoordinated, under-

capacitated, under-qualified and under-skilled.”

So what are the key areas that organisations should focus on to ensure stakeholder engagement is successful?

Rossouw points to three areas: the first is the consideration of the human rights aspect. Such ‘rights holders’ - as opposed to ‘stakeholders’ - bring a whole new level of consciousness and need to be very quickly and very seriously integrated in successful engagement strategies.

“Another new aspect that needs to be considered is the concept of ‘inclusiveness’, which encompasses inclusive development, inclusive products and inclusive services. This means you have to ensure the inclusiveness of those stakeholders for whom you develop, market, and sell products. Finally, there is only one way a company can know if its engagement is successful, and that is if its stakeholders tell it so. Therefore stakeholder perception surveys are critical to understanding whether any given stakeholder engagement can be determined to be a success,” she concludes.

Business

Key strategies to ensure successful stakeholder engagement

• Recognise and commit to engagement using clearly defined company policies, aligned to global standards, and articulated in a way that makes sense to internal structures

• Understand who your stakeholders are• Know how your operations impact and affect stakeholders, and in what way• Identify the stakeholders and understand their characteristics• Not all stakeholders are equal, so you need to clearly analyse and prioritise

stakeholders• Dissect stakeholders and link this knowledge to internal operations• Have clearly developed processes and systems for engagement• Conduct engagement regularly, and keep documentation of engagement input,

commitments, and promises to ensure follow up and follow through• Provide opportunities and channels for grievances and complaints and mitigation

processes to respond to these• Communicate and report on stakeholder engagement• Make stakeholder engagement part of the deliverables and KPIs of executives• Be very aware of the difference between information dissemination, communication,

dialogue and engagement. The latter is a proactive process that allows for proper dialogue and offers the opportunity for stakeholders to respond – a town hall meeting or open day is not true engagement

"To deal with this new world, enterprises need to ensure they have organisation-wide crisis communication teams, which must include senior executives who are dedicated to engagement."

11Transformation

Digital transformation at IoDSAIn line with the IoDSA’s strategic objectives of building a credible and visible brand, the IoDSA is dedicating the year 2018 to digital transformation.

T he IoDSA values innovation throughout the business as we understand flexibility is crucial in today’s times of advanced

and disruptive technologies. We have recognised that digital congruence will allow us to better serve our member base. This transformation coincides with our expanding role in the regions as a recognised authority in promoting corporate governance.

The IoDSA has always been an innovative brand – moving with the times. We have realised that digital congruence is the crux to better serving our member base and the world of corporate governance as a whole. This transformation coincides with our expanding role in the region as a recognised authority in promoting

corporate governance.We are excited to announce that

innovation will take place in these exciting areas:• Website: An upgraded and pleasant

website for your ease of use. Use it on your PC/laptop or mobile. Enjoy navigating our new online platform. The new website will boast a clean design, intuitive and consistent navigation system.

• A mobile app: For members. View and update your profile with ease. Get notifications on the latest events and programmes. You can also keep your CPD in check.

• Online Directorship magazine: This is also in line with our green initiative to reduce our ecological footprint. Enjoy

reading about the latest hot business and governance topics on your chosen digital device with ease and at any time at any place. Imagine carrying your Directorship magazine in your pocket (digital device) and being able to read it anywhere you go.

• Directors’ Channel: Expect a facelift with new and exciting content that is relevant to you.

• King IV App: Now available in all app stores: Google Play, App Store, and Galaxy Apps. The King IV Report app gives you easy access to the entire King IV Report. No more carrying around text books to know what the roles and responsibilities of governing bodies are. Every person tasked with governance duties should have this app.

2018 will be an exciting year, one where we plan to use our digital strategy to create…Better directors; Better boards and Better business.

12Risk management

How boards can minimisetheir business risk exposure Lynette Dicey

One of the most important duties of a board of directors is overseeing company risk. And while the risks faced may differ from company to company, common potential risk factors can include anything from cyber security, resignations, product faults and recalls to bribery, corruption and environmental threats.

T he Wall Street Journal recently published an interview quoting Nicole Sandford, manager at Deloitte

and Touche LLP, on the role of board members and their approach to risk. Sandford says boards are increasingly being scrutinised by stakeholders – from shareholders, regulators and analysts, to the media. As such, board members and executive management need to work closely to identify risks and agree on how to approach them.

While many boards play more of an oversight role, there are times when directors are required to play a more active part in the business in areas such as strategic direction and CEO succession

planning. Of course, there is also a vital space for board members in times of crisis or market instability, when they will be called on to help the company weather the storm.

The board is also ultimately responsible for the reputation of the company. “The board has an obligation to ensure that the reputation of the organisation is intact at all times,” insists Janine Hills, CEO of Vuma Reputation Management. “And when we say reputation, that doesn’t mean only focusing on the financials or bottom line, but all nine dimensions of reputation management including employer attractiveness, business performance, ethical business practice, transparency,

social responsibility, management quality, marketing and sales effectiveness, innovativeness and quality of products and services.”

She adds that with the marketplace being exposed to so much more information, transparency is becoming that much more important. Bearing this in mind, she says it’s imperative that board members are educated and upskilled so that they have a holistic view of reputation management and why it’s becoming more important. “Gone are the days when you could sweep things under the carpet. Both the marketplace and shareholders are calling for greater transparency and disclosure,” says Hills.

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"The rebuilding of a reputation can only happen if genuine and authentic changes are made. It needs to start with the replacement of leadership and a thorough review of the board to determine why the values and governance structures were compromised in the first place. "

There’s a direct correlation between an organisation’s reputation and its bottom line, points out Regine le Roux, MD of Reputation Matters, adding that people don’t want to be associated with companies with poor reputations. “People want to do business with companies they trust and that have good reputations,” she says.

What does that mean for companies such as Steinhoff, Eskom, KPMG and McKinsey, that have all seen their reputation in tatters in recent months? Reputations can only be salvaged, says Le Roux, if considerable remedial actions are taken, and even so it will take years to recuperate and reinstate trust from stakeholders. “The rebuilding of a reputation can only happen if genuine and authentic changes are made. It needs to start with the replacement of leadership and a thorough review of the board to determine why the values and governance structures were compromised in the first place.”

Stakeholders, she adds, need to be reassured that this won’t happen again, and how they will be protected going forward. Actions and active engagement needs to be a key priority.

It takes time, money and energy to salvage a brand’s reputation, agrees Hills. An ethical mindset has to be integrated into all levels of the organisation, and then monitored and measured.

Board members who suspect that the business is at risk as a result of questionable or unethical business practices need to raise these issues in the Audit and Risk committee, advises Hills, as well as in management and board meetings. “It’s important that these issues are raised, minuted, and that there is a paper trail.”

It’s equally important to ensure that there are corporate governance policies in place and that training is provided around corporate governance. Board members who suspect corporate governance rules are being flouted need to raise the red flag

with the board chairman, advises Hills. “If Steinhoff, Eskom, KPMG or McKinsey

had invested in reputation research, issues would have been flagged and could have been investigated and dealt with much sooner,” says Le Roux.

In the current environment, the success of an organisation is largely determined by its ability to deal with the risks it faces. Culture has an important role to play in the risk process – employees typically act in accordance with the behaviours they’re rewarded for. Board members set the tone for risk, the organisation’s adherence to good corporate governance, and in establishing a culture of honesty and transparency. At the same time, however, they need to create a culture where employees are encouraged to take intelligent risks and are acknowledged or rewarded for doing so.

According to an article in the Harvard Business Review, co-written by Linda A. Hill and George Davis, many boards are calling for a more innovative approach to business. That said, with innovation comes risk, necessitating boards and senior management to work more closely than ever before.

It’s a relatively new approach for board members – they need to embrace risk, yet at the same time, manage and mitigate as much as they can. This can be seen as an ‘inverted risk paradigm’ where boards face the fact that avoiding risk can be the riskiest behaviour of all, the article states.

Ultimately, board members need to have sufficient industry experience and relevant expertise around innovation, underpinned by sound knowledge of corporate governance and a holistic view of reputation management in order for them to be sufficiently equipped to make sound risk assessments on business proposals.

Perhaps one of the most pertinent comments on boards and their role in the risk management of organisations was made by Warren Buffet, CEO of Berkshire Hathaway. In an article posted on BizNews.com by Alec Hogg, Hogg talks of

how Buffet believes that board members should have their ‘own skin in the game’ if they are to effectively identify and manage risk.

Buffet challenges directors to be independent thinkers and to challenge CEOs when they are not acting in the best interests of the business, or acting in a way that is foolhardy. This kind of independence is not always easy to find, and is certainly more common in directors who have a vested interest in the organisation.

Berkshire Hathaway board members all own company shares, which means that should a crisis occur, board members stand to lose as much as any other stakeholder in the business. Buffet calls this approach ‘owner capitalism’.

In an environment where the board itself is very often the custodian of the wealth of its stakeholders, is an owner capitalism approach perhaps the best insurance against risk?

Regine le Roux

Janine Hill

14Risk

The election of Cyril Ramaphosa as President of the ANC signifies that the end of a decade of mismanagement and abuse of state resources is near. The turnaround for South Africa, once a promising country turned disreputable laggard, appears tentatively close. This is the current consensus in the private sector. The sudden rise of the rand to its highest level against since mid-2015 testifies to this. But is such optimism warranted?

Managing country risk – left unguarded and ungoverned by boardsClaude Baissac & Linda de Beer

T he rand rally is not based on facts but on an expectation of a turnaround. To a critical eye, this expectation has

attached itself to a marker of possible change, not to change itself. Change has yet to occur, and the actual scope and timing of that change is unclear, and may remain so for a while. Factual analysis shows an arithmetically divided ANC leadership structure, the likely outcome of factional engineering rather than internal democracy. It shows two powerful factions engaged in a crafty battle of influence with uncertain outcomes. It shows President Jacob Zuma as an embattled but still powerful head of captured institutions filled with people who have much to lose from his departure.

To sum up: factual analysis shows a rise in uncertainty as the dominant outcome

of the ANC conference. And in corporate governance, uncertainty equates rising risk.

For boards and executive management, this is clearly no time to relax. Given this, the optimism is puzzling because it represents in itself a potentially significant source of risk that adds itself to the risk born by the uncertainty. External risk unchecked by adequate internal risk management processes rooted in a committed leadership raises the spectre of governance failure.

King IV Principle 11 states that, ‘The governing body should govern risk in a way that supports the organisation in setting and achieving its strategic objectives.’ King identifies key practices toward this that directly relate to country risk:

• The board should exercise ongoing oversight of risks and opportunities that

emanate from the triple context in which the company operates and the capitals (natural, environment, manufactured, financial, social and relationship, intellectual and human) that the company uses and affects.

• To this effect, the board should consider an assessment of the company’s dependence on resources and relationships as represented by the various forms of capital.

• The board should set the company’s risk appetite, thus its propensity to take appropriate levels of risk.

• On this basis, the board should consider and approve the limit of potential loss that the organisation has capacity to tolerate.

Examples abound of South African companies that endeavoured into other

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"Inadequate country risk governance decreases the prospect of delivering on strategy. It also heightens the likelihood of serious governance failure."

countries – on the African continent, in Australia, in Asia – and failed to achieve stated strategy, in part because they did not have a full understanding of the political environment, the legislative framework, or unique difficulties and risks of doing business there.

Too often the assessment of country risk remains limited to the impact on financial capital: how the risk can affect the income statement. Other critical capitals, such as employees, reputation or assets such as social and natural capital tend to be left out or be perfunctorily considered through superficial, tick-box due diligence. This leads to an over-emphasis on opportunity, and therefore risks translating into a pro-investment bias. With that comes a higher likelihood of country risk-related problems, potentially serious and costly. This is particularly the case with investment in jurisdictions with high country risk – more likely than not where South African companies will invest.

Inadequate country risk governance decreases the prospect of delivering on strategy. It also heightens the likelihood of serious governance failure. South Africa offers a case in point. The procedures, but also the understanding and skills, have been lacking. Most boards took far too long to adequately understand and prepare for the predictable decline in the political and economic performance that started circa 2007, accelerated after 2011, and turned into full blown crisis in 2015. Instead, they initially sought to buy political risk insurance through (in the worst cases) cronyism or (in the best cases) insulate their South African operations from their international ones. Following Nenegate, many got directly involved in politics, a decision high in risks.

Overall the lack in country risk governance has undoubtedly contributed to the aggregate poor performance of the South African private sector and its lower attractiveness to investors. It has also led to a de facto abdication of this responsibility to executive management,

itself without the requisite means but with the obligation to manage country risk. It has undoubtedly contributed to significant mistakes arisen from a lack of country risk management principles, board guidance and dedicated resources. It has likely contributed to the implication of many companies in political corruption (through for instance opportunity funding of political parties, BEE deals with politically connected persons, and tenderpreneurship) and the state capture scandal. Finally, it has certainly played a role of a broader set of governance failures caused by the declining quality of key institutions of economic governance – line government functions, regulators, collective institutions, etc.

Yet, country risk is a clearly defined phenomenon measurable at aggregate (national, sectoral) and individual (local, company) levels. Tremendous progress has occurred in developing the foundations of country risk management. It is now ready to become a distinct practice, undergirded by sophisticated tools bringing together political science, economics, strategy and corporate risk management.

Here South Africa has a distinct advantage, given the sophistication of its corporate governance framework and its rising country risk. This juxtaposition creates both a requirement for improved country risk management and an opportunity to developing a unique set of skills and methodologies which could provide competitive advantage at home and abroad, as country risk is on the rise globally.

The time is now.

Claude Baissac is a specialist in strategy, risk management and economic policy. He is the CEO of Eunomix, a consultancy pioneer in developing the methods and practice of country risk management. He works as a development

economist with the African Development Bank, the World Bank and the United Nations.

Linda de Beer is a Chartered Accountant (SA), Chartered Director (SA) and a member of the King Committee. She serves as an independent director on a number of boards and provides corporate governance advice to

numerous companies, both in South Africa and Namibia.

The current wave of optimism about South Africa’s political future and its implications for business is a concerning indicator that the lessons of the past have not been adequately incorporated:• First, it demonstrates that the

understanding of the nature of country risk remains superficially attached to the notion of political actors and personalities instead of that of political, economic and social systems with structural attributes that condition business in the long term. There is a bias toward reducing country risk to the quality of the country’s political leadership. This bias is inherently dangerous.

• Secondly, it shows that country risk management remains to be properly adopted as a fully-fledged constituent of corporate governance, rooted in proper principles and rules, undergirded by professional capabilities and sufficient resources and effective decision-making. Since the focus tends to be on the country’s political leadership, country risk beyond financial risk management is understood as mainly a matter of relationship. This is inherently dangerous.

16Sustainability

Future-proofing the organisationTasos Calantzis, CEO, SuperUltra

The long-term sustainability of most businesses depends on a continued ability of the organisation to adapt to change. The increased rate of change in consumer demands, technology, working environment, regulation and competitive landscape makes this adaptability as important as good management and good citizenship.

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“Many of today’s business leaders are aware of the need for adaptability but have insufficient tools, learning and experience for building adaptable systems."

R oger Martin, currently the world’s most influential business thinker, writes in his 2009 book, The

Design of Business, that most businesses prioritise reliability – the ability to create consistent results. This is obviously valuable, but when applied across the entire organisation, can make maintaining the status quo an end in itself. This is the opposite of adaptability. Martin suggests that businesses create a welcoming environment for validity – the ability to meet the right objective. This is the true long-term means of creating value. In fact, he argues that this is management’s primary responsibility.

Many of today’s business leaders are aware of the need for adaptability but have insufficient tools, learning and experience for building adaptable systems. Fortunately, these are simple, effective and easily available.

Enable the right structureThe growth of technology start-ups has spurred a worldwide movement towards flatter organisations. Elon Musk’s now-famous August 2017 e-mail to staff (subject line: Communication Within Tesla) says, “Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company. You can talk to your manager's manager without his permission, you can talk directly to a VP in another dept, you can talk to me, you can talk to anyone without anyone else's permission. Moreover, you should consider yourself obligated to do so until the right thing happens.” Musk is not the only one who thinks this way, but it is perhaps best articulated by author Dan Pink in his book Drive, which uses considerable research to show that motivation is intrinsic and consists of three factors: purpose, mastery, and (to Musk’s point) autonomy. Even 105-year-old IBM has taken the radical step of hiring hundreds of designers and training each

of its 300 000 employees in design. It has embraced design, open collaboration and ‘radical transparency’ in order to ‘solve real problems for real people’. The lesson is clear: adaptability requires hiring diverse thinkers, giving them autonomy and getting out of their way.

Encourage the right thinkingWarren Buffet’s business partner, Charlie Munger offers sage advice: you make better decisions in business and in life if you find and understand the core principles from many disciplines. Munger speaks of a ‘lattice of mental models’ and lists many of them. Not all are complicated: a mental model is simply a rule of thumb that has been shown to work. Some of the mental models that create adaptability in business are the practice of Agile, the principles underlying Lean, the branches of Systems Thinking and Theory of Constraints. Finding and understanding these allows the flexibility of mind that people need to be adaptable.

Install the right processesIn IT development, there is a long history of software being out of date by the time it is released. In 2001, seventeen software developers met to create The Agile Manifesto to capture the principles of faster, more reliable development and better products – in short, adaptability. In other areas of business, concepts like Lean Startup seek similar goals, but the leading process for delivering agility today is Design Thinking. This applies the principles of Design to any area of the business, blending creativity, business acumen and practical testing together. Design Thinking has a rigorous process that guides people towards business-transformative ideas at any scale from small process improvements to big strategic shifts. Its strength is in the value of prototyping – so that any business improvement, new product or customer experience can be cheaply and quickly tested and improved in iterative cycles until its ready for

ramping up. Well-proven processes like Design Thinking are the infrastructure of adaptability.

Use the right measuresThe right measure of agility is, of necessity a financial measure. More specifically, a financial measure must be created for the rate of change. Depending on the goal, that could be the percentage of revenue from new products, processes, territories or customers. These are useful, but they are lagging indicators. Leading indicators could include the quantity of new intellectual property, successful prototypes or incremental changes created. The ideal measure is simple and well-constructed to guide adaptable behaviour.

Future-proof organisations will rely increasingly on adaptability, and even for leaders with limited exposure to creating adaptable organisations, there is a straightforward way to do so. They should put in adaptable structures and thinking, drive the correct processes, and measure the leading indicators. Done well, these provide the most proven way to create truly sustainable businesses.

Tasos Calantzis is a designer and a public speaker on the topics of design and design thinking. He has spoken and facilitated at events such as TEDx, the World Economic Forum, World Design Capital,

Global Entrepreneurship Week, EO University and the Australian Good Design Awards. He is the founder of SuperUltra, a consultancy which creates breakthrough products, services and innovations for global companies like Procter & Gamble, BP and Philips and has lectured at and collaborated with universities such as the Massachusetts Institute of Technology, Duke Corporate Education and the Henley School of Business.

Governance 18

A pplying corporate governance in an organisation has predominately been viewed as applicable and germane to JSE-

listed companies.One of the key objectives of the King

IV Report on Corporate Governance™ 1 (King IV) was to broaden its acceptance by making it accessible and fit for implementation across a variety of sectors and organisational types. It undoubtedly delivers in facilitating how corporate governance is applicable to all types of organisations through its generic terminology, overarching principles and sector supplements, including an non-profit sector supplement that provides guidance on how best to apply King IV within the non-profit sector.

However, the effective date for

King IV was 1 April 2017, and many non-profit organisations are still trying to come to grips with the outcomes-based philosophy of King IV as well as rationalising how they can implement King IV within their organisations. Based on my personal research and facilitation of in-house training sessions for non-profit organisations, applying corporate governance is a process; and understanding the philosophy before implementing the recommendations is key – you can’t run before you walk and you can’t walk before you crawl. The foundational concepts and thinking around corporate governance need to be understood, and the expectations need to be clear within the organisation’s management and governing body.

In my experience of working with non-profit organisations I have come across

some common challenges that the non-profit sector has in relation to applying corporate governance:

1. Not remunerating non-executive directors on the governing body Many non-profit organisations are unable to remunerate their non-executive directors to serve on their governing body. Funds are almost entirely used for doing the great work that the organisation is endeavoring to do, and the related value they are bringing to the community and its people. Therefore the non-executive director who sits on the governing body will do so voluntarily (i.e: for no fee)

1 The King IV Report on Corporate Governance for South Africa 2016, Copyright and trade marks owned by the Institute of Directors in Southern Africa.

Non-profit sector governing body challengesTanya Nassif, Governance and Legal Specialist, IoDSA

Many NPOs are still trying to come to grips with the outcomes-based philosophy of King IV and how it can be implemented within their organisations.

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"It’s critical for the governing body to understand what its primary governance role and responsibilities are…"

because they intrinsically believe in what the organisation is doing.

Non-executive directors should view serving on a non-profit organisation governing body as their personal CSI and giving back to the community. They should look beyond the remuneration aspect and volunteer for a non-profit organisation that aligns with their core values and beliefs.

2. Acquiring experienced and competent non-executive directors to serve on the governing body Another obstacle for non-profit organisations is acquiring non-executive directors who fully understand the expectations and role of a non-executive director and who also have experience and skills that will add value to the organisation. Understanding directors’ duties as well as the standard of conduct expected of a director is fundamental to fulfilling the role of a non-executive director.

Furthermore, various non-executive directors are appointed to the governing body due to their knowledge, skills and expertise, and the value they will contribute to the organisation.

The governing body sets the strategic direction of organisation, and having the right mix of knowledge, skills and experience on the governing body is critical to the effectiveness of the governing body.

The non-profit sector battles in procuring the right caliber of non-executive directors and it’s imperative for the organisation to do a skills gap assessment of what skills they require on their governing body and have clear criteria for the non-executive directors they need on their governing body. Likewise the Institute of Directors in Southern Africa does offer free NED Vacancy notices to their members.

3. Ensuring time and capacity of non-executive directors to sit on the board of directors Availability in time and capacity with other

obligations is a predominant challenge for the non-profit sector. Ensuring all governing body members are available for meetings and the required preparation work beforehand is a difficulty.

The non-profit organisation should ensure before the non-executive director is appointed that they have suitable time and capacity to allocate to this appointment, and should enquire what other governing body appointments the non-executive director has, to have peace of mind that capacity and time will not become a problem in due course.

4. Non-executive directors involved in management of the organisationIt’s not uncommon for the non-executive directors in the non-profit sector to become involved in management elements of the organisation. So, for example, if a non-executive director is an accountant and the organisation’s finance department needs assistance, the non-executive director will step in and help. The difficulty is when the non-executive directors needs to step back from been involved in the management work and move back into their role as a non-executive director on the governing body when the assistance is no longer required.

This can be highly problematic and can put strain on the governing body in that management matters are being dealt with at governing body level. Although the above is not ideal and should not be viewed in the long term – it can be done. However, the organisation should ensure there are proper controls in place, and the assistance of the non-executive director is for a limited time with a plan to move the non-executive director out of dealing with management work.

5. Understanding the role and responsibilities of the governing bodyBecause many non-profit sector organisations start out small and, hopefully, grow and then move to applying corporate governance – the

clarity of governing body members’ roles and responsibilities is often blurred in the beginning. It’s critical for the governing body to understand what its primary governance role and responsibilities are and King IV provides that the governing body:

• “Steers and sets strategic direction with regards to both: the organisation’s strategy and the way in which specific governance areas are to be approached, addressed and conducted

• Approves policy and planning to give effect to the strategy and the set direction

• Oversees and monitors implementation and execution by management, and

• Ensures accountability for organisational performance by means of, among others, reporting and disclosures.”

Understanding and maintaining these clear and objective expectations is extremely helpful in ensuring the organisation avoids overlapping the role of management versus that of the governing body.

What is clear from my interactions with the non-profit sector is the intention and willingness of non-executive directors to sit on a non-profit organisation’s governing body – however this undertaking should not be made lightly, and a clear understanding of the commitment and expectation is critical.

Tanya Nassif, Governance and Legal Specialist, IoDSA

20Opinion

Calling the Steinhoff fraud scandal an accounting irregularity effectively depersonalises the misconduct. Corporate governance is fundamentally about human behaviour, attitude, mindset and responsible leadership of institutions.

Steinhoff fraud scandal an accounting irregularity? Dudu Msomi, IoDSA member

21

"...boards of directors are a structure that was created to overcome the agency theory that assumes that those tasked with the control of an institution are motivated by self-interest at theexpense of shareholders and stakeholders."

C orporate Governance places emphasis on the rules and constraints on decision-making, specifically the need to constrain

‘managers’ to act in the best interest of the institution, especially public ones. Law and regulation will never be able to improve governance practices. You cannot legislate ethics. Unethical individuals will always find ways to subvert laws, regulations and good governance practices such as the King Code. King IV defines corporate governance as the exercise of ethical and effective leadership by the governing body towards the achievement of the following governance outcomes: ethical culture; good performance; effective control and legitimacy.

Corporate governance is typically thought to be the exclusive domain of boards of directors. But not necessarily so, as Leon Kirkinis, former CEO of African Bank cautioned me in 2006 when I did my MBA research on ‘Factors affecting female representation on boards of directors’. He thought I was overzealous and over-estimating the role of boards in leading organisations. Kirkinis said: “The individual you must focus on is the CEO. The character and values of the CEO are critical in setting the tone, and they play a greater part in running an organisation, not the board.” Gill Marcus, the former Governor of the Reserve Bank, as part of the same research, shared that as a Chair of a board, she prefers to have three Executive Directors minimum, including the CEO, being on the board. She observes their individual contributions and sees whether they are always in agreement, which would be a symptom of collusion, or being under duress that can indicate a deeper problem. With all these corporate scandals ranging from Enron, Regal Bank and now Steinhoff, Kirkinis’ warning was inside wisdom that must be heeded, especially in view of how things turned out at African Bank. All these companies had boards.

There had Audit Committee members skewed towards Chartered Accountants. And yet the shenanigans of the CEOs were not detected by these boards.

The question being increasingly asked is, “What is the value of boards?” We must remember that boards of directors are a structure that was created to overcome the agency theory that assumes that those tasked with the control of an institution are motivated by self-interest at the expense of shareholders and stakeholders. The belief was that when given decision rights, managers may act in ways that maximise their own welfare at the expense of the organisational good. In many instances of bad governance, this assumption has proved to be true. So in practical terms, how does a board that meets four times a year, with working board committees in between, really know what is happening in the organisations they are accountable for and monitor. That is what should be keeping every board member awake at night. Sitting on boards is no longer a status symbol or for prestige. Risk oversight is an imperative for boards, and with gained increased focus in the aftermath of the global financial crisis. I would venture to say that the oversight role of boards itself is a critical risk that needs more efficient and effective ways to exercise, especially as they are at the mercy of the information being prepared and provided by the executives with gatekeeping by the CEO.

King IV sees combined assurance as a model to optimise the assurance services and functions to facilitate effective control environment, with the outcome being information with integrity to support decision-making and for external reporting. Combined assurance is safeguarding a co-ordinated (combined) approach to assurance on whether key risks are managed appropriately within an organisation. The first line of defence is management. The second is

internal auditors. The third is the external auditors. However, if risk is defined as a probability or threat of damage, injury, liability, loss or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through pre-emptive action, in my eighteen years of sitting on boards, I have never seen CEO integrity risk on any risk register or audit plan. Yet the lack of a CEO’s integrity has the ability to destroy billions of dollars of a company’s share price in less than a week. If there are board members even in organisations that have not had governance scandals as yet, who are not feeling vulnerable or that their useful days are numbered, then they need a reality check.

Dudu Msomi is CEO of Busara Leadership Partners, a research-oriented strategic advisory service and consulting company whose expertise is to facilitate the development and

effectiveness of leaders to achieve their desired goals. Msomi is a strategist, leadership expert and coach, business advisor, thought-provoking speaker and writer. She is an IoDSA Fellow and has an MBA from GIBS. Dudu Msomi is on the board of directors of the Financial Services Board (FSB), a Trustee on the Humulani Trust (Invicta Holdings) & Member of the GIBS MBA Alumni Bursary Committee. Dudu loves being a member of the IoDSA for the continuous learning opportunities.

22

T he Deputy Minister of Trade and Industry in South Africa estimated in 2015 that 2.8 million Small, Medium and Microenterprises

(SMMEs) contribute 52-57% towards the GDP and contribute 60% to employment. Yet only 70% of microenterprises have a bank account, while only 5% have access to term loans, and 1% to working capital loans from banks, as found in a recent study by CARE UK. Critical questions need to be answered: how are these underbanked small and microenterprises going to access credit to help propel the lifeblood of the South African economy? How are we going to achieve inclusive growth? What should companies and boards do to integrate our mass markets more effectively?

Being part of the global digital revolution, I can advise that inclusive business models are certainly possible,

and all players in the value chain can benefit. And digital is a key enabler.

Localisation and market fit. Understanding your customers.

There has been an extraordinary amount of investment into Fintech globally - north of $17.4B in 2016. However, the failure to recognise the nuances that exist within each developing country underpins many of the failures of FinTechs in emerging markets. MPesa is a case in point, proving even within a continent and region, products, business models and technologies that are successful in one country are not always proven to be successful in another. In some markets, these could be literacy, cultural barriers and access, gender paradigms and crime that bring into the fore distinctive threads that need to be weaved into designing products, services and business models that address these localised socio-cultural realities.

Unhinge your traditional business models. Before someone else does. Social impact. Inclusive growth. Impact Investing. Radical economic transformation. A common theme not only in South Africa. But developed and developing countries are all awakening to the reality that the sustainability of large companies, countries, and the welfare of citizens lies in how businesses can morph their models to have larger social impact and to stay commercially sustainable. Impact that leads to a greater good for all. Firms can integrate networks, partnership and communities in all areas of the organisation, from communication, marketing, distribution, sales, support and even product design. Why keep it only to the CSI department? Digital can enable the reconfiguration of these traditional processes and channels to catapult an organisation’s ability to

Two billion people are currently unbanked or underserved across the globe. Accenture predict that if more than one-third of the world population in low- and middle-income emerging markets are brought into the formal banking sector, it will present a $380billion opportunity for the industry.

Opinion

Inclusive (digital) growth - Local solutions to global problems Priya Thakoor, IoDSA member

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"Digital can enable the reconfiguration of these traditional processes and channels to catapult an organization’s ability to integrate these communities."

integrate these communities. In a 2016 report by GSMA, they mention there are 4.3 million agents that are the backbone of cash management, enforcing ‘know-your-customer regulations’ and providing cash in and out for mobile money in emerging markets. Enabling financial inclusion and creating jobs in the process, telecommunications providers have leveraged their distribution and scale to grow the pie and concurrently have social impact. How is your organisation weaving inclusion and integration into your business strategy? What is your social value proposition?

Leverage existing networks. Trusted networks. In South Africa, a rotating credit and savings organisation (ROSCA), the Stokvel, emerged as a mechanism to mobilize savings, providing a means for survival outside the formal financial structure by remarkable and entrepreneurial women who ‘urbanised’ during the apartheid era. Why are these forms of organised community savings schemes still persistent, despite the sophisticated financial services in modern South Africa? Today, there are over 800,000 Stokvel groups in South Africa, and the National Stokvel Association of South Africa (NASASA) estimates that 11.5m people belong to a Stokvel with some R49bn in the Stokvel economy (National Stokvel Association of South Africa, 2017).

The self-regulating nature of Stokvels ensures members are party to decision-making, and is a manifestation of a very organised and matured form of a savings structure; this indicates merit in leveraging these trusted networks as a gateway to untapped mass markets. But companies need to be responsible to ensure there are mutual benefits and that communities are not exploited. Globally, these trusted networks are a strong emerging market phenomenon, with 200 variations within developing countries. In Africa alone, there are conservatively a

recorded 100 million people that belong to these informal saving groups. The buying power of Stokvels in South Africa has not been officially recorded due to the nature of the cash-based transactions, but it is estimated to be at least R25 billion annually. Digital can play a role within the mining and agricultural sectors in aspects of coordinating buying, distribution, communication, activity management, and a plethora of financial services and retail products. How can your company leverage the coordinated buying power of 11.5 million adults?

Collaborate with Disruptors. The Start-up ecosystems are booming. Proliferation of new innovative financial technologies (FinTechs), including crypto-financial technologies, opens the gateway for low-value financial services to be made available to the masses. For as little as $0.01c a transaction, and without having to build a physical bank, an opportunity exists to redress the 2 billion unbanked adults around the world.

South Africa was named as one of sub-Saharan Africa’s frontrunners for entrepreneurship by the Global Entrepreneurship and Development Institute in 2017. They estimate that if the conditions for entrepreneurship are improved by 10%, it could add $176 billion to the economy in South Africa. Large listed companies have customer bases, mature supply chains, processes and brand equity that most start-ups envy. While these same large corporates require access to new and untapped markets, cheaper distribution methods and innovative ways to do business, there are mutual benefits in partnering with start-ups in the ecosystem to solve these challenges and support entrepreneurship growth at the same time. These small nimble firms usually have an innovative model underpinned by a Digital product solving local problems with local solutions. Is your organisation partnering with and supporting this

ecosystem? Where are these partnerships in your business strategy? Link in with an incubator and get support in identifying start-ups to help you co-create your products and understand your next market.

By applying these principles, your company will be part of the inclusive growth that South Africa needs desperately, and gear towards a responsive business that has local solutions to global problems. Leadership has to drive this change, and it starts with diversity on the Board. Diversity in your senior leadership team. Work on leveraging existing assets and unhinge them from the traditional trajectories. Partner with existing networks. There are smaller agile companies already working on solving your problem. You have a head start to transform your organisation to be part of an inclusive growth trajectory for South Africa and the continent. A more inclusive, digitally enabled strategy will secure your company’s place in the future.

Priya Thakoor is a thought leader in Digital Transformation and business at the Base of the Pyramid. She has over 20 years’ experience in Retail, Banking, Start-ups, Technology and Venture Capital. Her

skills span digital strategy, inclusive models, social impact businesses, commercialisation, ecommerce, building and running digital channels for the largest clothing retailer and Big 4 bank in South Africa. She is an activist and passionate about financial inclusion in frontier markets, FinTech, Human Centered Design, Start-ups and the Digital Revolution. Being a member of the IoDSA has given her valuable insights on important company and board issues, and how to ensure Corporate Governance is addressed in a rapidly disrupting environment.

24Member achievements

IoDSA Case Study competition winners

W inner of the IoDSA case study competition, Matthew Marrian found his passion for corporate governance

while studying his MBA. He was drawn to the African Bank Investment Ltd (ABIL) story, becoming increasingly interested in understanding the role of asset managers in assessing corporate governance when they invest in particular companies, and igniting what would become his winning case study.

Marrian began his career as a member of Allan Gray’s graduate programme, subsequently taking on various roles within the firm, in client service and later assisting financial advisors on special projects. Today, he is Head of Client Service at Fundhouse, a global investment adviser that builds and manages local and global investment portfolios for its clients.

“Asset managers are starting to look increasingly at corporate governance, and this trend will grow following what has happened in the past year with companies such as KPMG and Steinhoff,” maintains Marrian.

He adds that thanks to the King Reports on Corporate Governance, South Africa is recognised all over the world for its guiding principles on the matter, leading the way for many other countries. What is a challenge standing in the way of sound corporate governance, he admits, is the fact that compliance with King is not a legal requirement for companies unless they are listed. “The challenge lies in the fact that King is principles-based and not law-based,” he points out.

That said, with asset managers becoming more informed on the topic, together with shareholder activism, he believes there will be increased pressure from both clients and investors to probe more deeply into the corporate governance practices of South African businesses. “Asset managers need to become experts on corporate governance, and part of that process is becoming more questioning,” he says.

Leaders have a role to play, but Marrian believes there is a difference between being an ethical leader and a charismatic leader – and points out that not all brilliant leaders have the right code of ethics.

1st place: Matthew Marrian

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Second place in the IoDSA’s recent case study competition went to Dr Elikplimi Komla Agbloyor, Professor

Joshua Yindenaba Abor and Lydia Adzobu, the authors of the SIC Company Ltd case study.

Agbloyor is a senior lecturer at the University of Ghana Business School, and the first PhD graduate in Finance from the University of Ghana. Abor is a Professor of Finance and the Dean of the University of Ghana Business School, while Adzobu is a course facilitator of the College of Distance Education at the University of Cape Coast, holding a Master of Philosophy Degree in Finance from the University of Ghana.

Sound corporate governance, says Agbloyor, is vital for the very survival of

a company. Not only does it ensure that shareholder investment is put to good use, it also enables firms to raise more funds. “Companies that adhere to strict corporate governance practices ensure that minority interests are protected and that the firm considers all stakeholders when decisions are made. These firms are usually able to take calculated risks, thus reducing volatility in their stock prices and developing the ability to create a sustainable business that will last into the future,” he adds.

Despite the importance of corporate governance, Adzobu points out that one of the greatest challenges to implementation is the lack of proactive oversight by industry leadership and regulators. This poses a major threat

to the successful application of best practice. “As evident in the SIC case study, while corporate governance structures exist, and leaders and directors may be well aware of the governance principles, there is a very weak will for proper enforcement,” she illustrates.

Agbloyor agrees, stating that Ghanaian institutions understand the principles of corporate governance, but often – as the SIC case study demonstrates – firms do not comply with them. “In some cases, even when there is compliance, there are a number of other factors at play that can be challenging, including lack of funds to bring on competent directors, as well as directors themselves not having sufficient time to dedicate to the company’s requirements,” he reveals.

2nd place: Dr Elikplimi Komla Agbloyor, Prof Joshua Yindenaba Abor and Lydia Adzobu

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C arol Musyoka and Evalyne Mugo were recently awarded third place in the IoDSA case study competition,

for their study entitled, ‘From a desk to the board room: How Equity Bank morphed into a regional stallion jockeyed by good governance’.

Both Musyoka and Mugo come from a legal background, with Musyoka holding a Bachelor of Law degree from the University of Nairobi and a Master of Law degree from Cornell University in the USA. Mugo, too, graduated from the University of Nairobi, later obtaining a diploma in Legal Practice from the Kenya School of Law and being admitted to the Kenyan Bar as an advocate in 2017.

In addition to sitting on a number of local and international boards, Musyoka currently runs a consultancy which provides training solutions to multinational and local companies in Kenya on leadership and corporate governance. Mugo joined the consultancy last year, assisting in board evaluation processes and training sessions, as well as research on corporate governance issues and developing case studies.

When it comes to the importance of sound corporate governance, Musyoka points out that a ‘fish rots from the head’, and that good companies with consistent profits and constant engagement with their stakeholders are most often run by good boards.

She reveals that companies in Kenya are

far from perfecting corporate governance, as regulation is greatly outpaced by practice. The regulator, the Capital Markets Authority, has issued a new code of practice for the issuers of securities, which is aimed at obtaining better governance standards. This, together with the revised Companies Act 2015, places a significant burden on directors to take a more active role in the way their companies are managed, she says.

Mugo maintains that good corporate governance is vital for the growth and

sustainability of companies and that it benefits all stakeholders. She informs that many Kenyan laws and regulations around corporate governance are based on King reports as best practice standards.

That said, she believes there is room for improvement in terms of implementing these standards in the boardroom, particularly in light of recent corporate governance scandals involving Kenyan companies.

IoDSA congratulates the newest Fellow

member

Magan Virenda

Congratulations to IoDSA member, Alkesh Singh, founder and MD of Astel Systems, on recently receiving the Microsoft SA’s Managing Director’s Award.

3rd place: Carol Musyoka and Evalyne Mugo

Member achievements

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28Sponsorship initiative

Promoting governance in the Non-profit sector

In April 2017 the IoDSA launched a sponsorship initiative envisioned to provide the opportunity for1. A select number of individuals to attend

Parts 1 to 4 of the IoDSA Being a Director series;

2. Two organisations to have a fully sponsored basic board appraisal conducted by the IoDSA; and

3. Two organisations to have a fully sponsored in-house governance induction programme.

IoDSA members were asked to nominate individuals or organisations for this initiative via a defined application process. Applications were then reviewed by the IoDSA Executive team that then selected the individuals and organisations who were awarded the sponsorships.

Awarded Sponsorships went to:

Parts 1 to 4 of the IoDSA Being a Director series• Mdu Menze of Waumbe Youth

Development Centre;• Lovemore Nyere of Dream Factory

Foundation NPO; and • Sandisiwe Ncemane of Nuclear Industry

Association of South Africa.

Basic Board Appraisal • Endangered Wildlife Trust; and • Savant Technology Incubator.

In-house Governance Induction Programme• Child Welfare Durban and District; and • Kotulong Community Centre.

2018 applications open in February 2018

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IoDSA Upcoming Training Member eventsBeing a Director Series: Part 5Date: 14 March 2018Johannesburg

Being a Director Series: Part 1 - 4 Dates: 06, 20 Feb, 06, 20 Mar 2018Cape Town

Governance of EthicsDate: 13 February 2018Cape Town

Secrets to being an effective Company SecretaryDates: 14 - 15 February 2018Johannesburg

Being a Director Series: Part 1 – 4Dates: 15 Feb, 07 Mar, 24 Apr, 24 May 2018Durban

Social & Ethics CommitteesDate: 27 February 2018 Johannesburg

Mastering Board LeadershipDate: 01 March 2018 Johannesburg

Responsible RemunerationDate: 14 March 2018Johannesburg

Member OrientationDate: 16 FebruaryJohannesburg

Member Open DayDate: 21 FebruaryDurban

Member Open DayDate: 22 FebruaryCape Town

Member Cocktail Date: 28 MarchJohannesburg

“IoDSA contributed immensely in capacitating our board of directors as well as top management, including the social worker with the corporate governance for nonprofit sector, training. The training was informative and beneficial and the information gained will be used in running KCC better to further improve the lives of the people in Midvaal and the surrounding area of the Vaal Triangle. The King IV report on corporate governance is the pillar that KCC would work and lean on whenever the lives of the communities are concerned as KCC believes in improving the lives through sustainable development and inclusive stakeholder approach.”

Kotulong Community Centre

“The Institute of Directors in Southern Africa has an impeccable reputation for undertaking objective, thorough Board appraisals. The EWT was eager to reap the benefits of having an external appraisal for our Board, despite this not being a requirement for a Trust, as we aspire to the highest levels of corporate government. As such, we were thrilled when the IoDSA kindly offered to sponsor this work for us. It resulted in an excellent scorecard for our Board across the various categories that were assessed, and was a smooth, professionally run process. The EWT has taken cognisance of the areas where we can score even higher in the future, and how we can aspire to better the performance, despite it being excellent overall. We are grateful to the IoDSA for this support, and for their input which ensures that the EWT is always striving for improvement in our drive to achieve overall excellence.”

Endangered Wildlife Trust

“The Board of Governors of Child Welfare Durban and District applaud the training session “Governance in the Not for Profit Sector”, held at our Durban office on the 5th October 2017! The lines of Governance outcomes leading to Principles and Practices have never been clearer. This training afforded immediate practical understanding of essential corporate governance.”

Child Welfare Durban and District

Feedback from the Awarded Sponsorships:

“Savant Technology Incubator NPC is a new organisation, and the Board comprises a cross-section of individuals, some who are relatively inexperienced and others who are more experienced in working on commercial boards. The project was an essential step in enhancing the effectiveness of the board.Although it is still early days to evaluate the full impact of the project, the following are early positives emanating from our participation: • Independent facilitation by IoDSA –

the role of the IoDSA as a facilitator of

the Savant Board appraisal ensured objectivity and independence of the process, which took into account the views of all the individual Directors on the performance of the Savant Board as a whole.

• Increased board participation in matters concerning strengthening the board – the qualitative feedback provided by the board members gave an essential insight into areas which need improvement by the board which has previously not been identified.

• Practical implementable outcomes

– further to the finalisation of the report, the board tasked one of the executive directors to identify some of the key outcomes that can readily be addressed by the board to enhance its effectiveness.

• The recommendations contained in the report provided additional links to tools and resources available from IoDSA that can potentially address some of the areas of poor performance.”

Savant Technology Incubator NPC

30IoDSA FAQs

Protection of Personal Information (POPI) – What you need to knowParmi Natesan, Executive: Centre for Corporate Governance, Tanya Nassif, Governance & Legal Specialist and Vikeshni Vandayar, Governance & Legal Specialist

What is the current status of Protection of Personal Information Act?The Protection of Personal Information Act No.4 of 2013 (“POPI Act”) was assented into legislation on 19 November 2013. However, only those sections relating to the formation of the Information Regulator and creation of ancillary regulations are currently in effect. An effective commencement date for the rest of the POPI Act is still to be proclaimed. The Information Regulator was formally

established with its members taking office from 1 December 2016. The Information Regulator during 2017 issued the Draft POPI Regulations for public comment and is currently in the process of preparing the final Draft Regulations for presentation to Parliament. The Information Regulator anticipates the publication of the POPI Regulations via Government Gazette during April 2018 (however, this may change). To stay up to date on latest developments and for more information

on the Information Regulator and its activities, visit http://www.justice.gov.za/inforeg/.

What is expected of an organisation in terms of the POPI Act?In summary, the POPI Act places an obligation on organisations that collect and use personal information to ensure that they do so lawfully. Lawfully means in compliance with the minimum requirements set out in the POPI Act

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Executive: Centre for Corporate Governance [email protected]

Tanya NassifGovernance & Legal [email protected]

Vikeshni Vandayar Governance & [email protected]

geared to protect the privacy/interests of the data subject. In a nutshell, this requires organisations to ensure that they obtain consent to collect and use a data subject’s personal information, that they only use personal information for the purposes for which it was collected, that they do not share that personal information with anyone else, that they keep any personal information that they store - whether for provision of services or for statistical, historical or research purposes - secure from unauthorised access and use, and that they communicate with the data subject in regards to the above as well as in the event of any potential breaches to their personal information. There are, however, exceptions provided to these general rules, and each organisation will need to access what level of compliance is expected from it, depending on the type of personal information it collects and the purposes of such use.

What is the governing body’s role?From a very high-level view the governing body and/or the members need to:a) Understand what the organisation’s

information assets are and what these mean to the organisation. In other words, the value - what would be the extent of risk/damage to the organisation should those information assets be unlawfully authorised whether through a privacy or cyber breach? How does this impact the strategy and business plan of the organisation?

b) Understand/ensure/provide oversight to management on the creation of the necessary policies and procedures around the collection, use, storage, security, etc., of personal information such as, for example, to ensure that the necessary crisis/disaster recovery plans include cyber security/data breaches, and the risk register includes information technology and necessary personal information controls, etc.

c) Understand/ensure that the governing body is made aware by management of all breaches/incidents that occur, as well as the course of action taken to address/rectify this

d) Understand what their role in the event of breach is – i.e. Who is the key spokesperson, What is the procedure to follow, etc.

Where should an organisation begin in its assessment and implementation of the POPI Act?There can be various approaches an organisation may take in its assessment and implementation of POPI to ensure its compliance. The organisation should ultimately find an approach that best suits its operations in line with the level of compliance expected from that organisation (depending on the extent of personal information it handles). The best place to start, however, is to first identify all the personal information which the organisation comes in contact with (i.e. in respect to each and every department, as well as between each department internally). Then to identify and understand why this information is collected (i.e. the purpose) Where is it stored? Who has access to it? What the current security measures are of the organisation around access to that personal information (this includes overall organisational information technology security and cyber security measures)? What company information is provided to suppliers, etc.?

Without first understanding what personal information the organisation uses and, most importantly, the purpose of that personal information in relation to the functioning of or provision of services from the organisation - the organisation will not be able to (1) assess the relevance of the personal information collected, (2) the value of such personal information to the organisation, (3) the information work flows across the departments and entire organisation and (4) the necessary strategies, controls, policies and procedures that may need to be created in order to safeguard that personal information and protect the organisation against liability of any breaches.

What this is the difference between information security and cyber security?Information security refers to protecting the confidentiality, integrity, and availability of all types of information (including personal information) regardless of its form. The information security programme in an organisation effectively provides the controls to protect personal information, through limiting access and protecting against unauthorised use/acquisition Cyber security on the other hand refers

to protecting against the unauthorised electronic access to the information or data contained on the organisation’s computers, networks, servers, and programmes, etc. Unlike information security, cyber security pertains exclusively to the protection of information/data that is in a digital form, i.e. accessible via a digital form. In today’s age, almost all personal information is digitally created/saved, and thus cyber security is the more commonly used term.The type and extent of the personal information is the most relevant concern for both types of security. In both circumstances, in order to create a security framework with the proper controls in place to prevent unauthorised access, it is important to understand what data/information, if accessed without authorisation, is most damaging to the organisation. The various legal, privacy and security teams within an organisation thus need to communicate with and work together on ensuring that the security measures/programmes put in place are most relevant and effective for that organisation’s specific needs.

32Lessons from the boardroom

During the past year one of the key themes raised by delegates was the apparent lack of role clarity in many instances between shareholders, the governing body and management and the potential negative impact on good corporate governance.

Clarifying the roles and responsibilities of shareholders, the governing body and managementRichard Foster, IoDSA Facilitator

T his is of particular importance with respect to two key aspects which I wish to deal with. In the

first instance, the role of shareholders in relation to an organisation and the risk of possible adverse impact due to interference. Secondly, the role of the governing body in relation to management and the risk inter alia of micro management and/or interference.

Governing body and shareholder relationshipNotwithstanding that both the law and/

or governance guidelines are reasonably clear on same, there would still appear to be some confusion and in more extreme instances, the possible pushing across boundaries by various parties in order, to further a specific self-interest. For example, the furtherance of interests of a particular shareholder could be achieved by exerting influence on/or within the governing body, and can be exacerbated if they happen to sit on such governing body as a nominee of such shareholder. This situation can obviously be detrimental to

the other shareholders and stakeholders of the organisation.

The relevant legislation is generally clear in that that members of the governing body have a fiduciary duty towards the organisation and need to perform their respective functions in good faith, for proper purpose and in the best interest of such entity, with due care skill and diligence. Members of a governing body may need to remind themselves on certain occasions that they are not appointed in a proxy capacity but as members of

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"The governing body should always endeavour to ensure that management are suitably empowered to get on and run the business whilst effective control is maintained over them doing so."

the governing body, who are required to exercise their own independent judgement on a matter in the best interests of the organisation.

The playing field can become extremely challenging in this area from a practical perspective resulting in the following question and concerns being expressed. “But what if I support a governing body decision not taken in the best interests of the particular shareholder who nominated me? I could be fired!” It should always be remembered shareholders owe no fiduciary duty towards the company as do the members of a governing body. They do have certain rights either through legislation or contractually provided for, one of which would be the right to nominate and /or appoint or remove a member of the governing body. I strongly suggest however, that the veiled threat of removal should not be allowed to fetter ones judgment as difficult as that may be, as inter alia, it is unlikely to stand as a valid defence in respect of a decision taken by a member of a governing body which was not made in the best interests of the organisation and was in fact unduly influenced by the shareholder.

It is imperative that the ground rules are clearly documented as to what the shareholder rights are, over and above those conferred by legislation, in legally binding documents such as the Memorandum of Incorporation, Shareholders Agreement or Shareholders Compact, which will vary depending on the nature and type of the organisation. In essence, these govern the various relationships including the powers reserved for shareholders in terms of decision making. Consideration and approval by the shareholders in respect of those particular matters would be required.

In certain circumstances the court may however look through the structure to ascertain who actually made the decisions

in the organisation and a shareholder could be regarded as a shadow director and be deemed to be a director for the purposes of accountability . In the ordinary course of events one should note that shareholders have limited liability whilst directors have unlimited liability.

Governing body and management relationshipHaving crossed the first bridge, let’s determine the primary corporate governance roles and responsibilities of a governing body which can be found laid out in King IV. These are namely to: i. steer and set strategic direction; ii. approve policy and planning, iii. oversee and monitor and iv. ensure accountability.

What then is the relationship and or distinction between the governing body and management and how is this working relationship achieved? Professor Bob Tricker of the Hong Kong Business School articulated the roles as follows “The role of management is to run the enterprise and that of the board is to see that it is being run well and in the right direction.”

Having clarified the distinction in the roles I suggest that Principle 10 in King IV together with the attendant practices suitably provide for the required structure, process and dynamics i.e. “The governing body should ensure that the appointment of, and delegation to management contribute to role clarity and the effective exercise of authority and responsibilities”

The necessary delegation to management is essentially achieved through the appointment of a Chief Executive Officer and subsequent delegation of powers to such individual within such parameters as the governing body may determine. The powers specifically reserved for the governing body should be clearly laid out as is the case with shareholders, to ensure management are clear on what is within their remit or mandate and what matters will need consideration and approval by the

governing body. The governing body should always

endeavour to ensure that management are suitably empowered to get on and run the business whilst effective control is maintained over them doing so. This is often a delicate balance and there are a number of factors that may influence the governing body and should be considered such as, i. trust and. level of confidence in management, ii. complexity and size of the business and its attendant risk profile and stakeholder impact, and iii. the stage of an organisation in its life cycle.

An aspect often raised is that that role clarity may not be as easily defined in smaller organisations given that the governing board member is often a shareholder and manager. The King IV Sector Supplement for SME’s gives guidance on addressing this challenge and inter alia, recommends that in order to ensure role clarity, formal processes should be put in place to differentiate between a single individuals roles as governing board member, manager and shareholder. Transition during an organisations growth cycles will be easier if the roles have been clearly defined from the start.

In summing up it is suggested one should endeavour to ensure that the roles of shareholder, governing board and management and related governance principles are suitably considered, documented and applied on a basis proportionate to the requirements of the particular organisation. In addition, it is important that the communication of same is clear and the necessary channels form part of the structure and processes and allow for constructive engagement between the role players. Such engagement, I suggest will to a large extent, determine the quality of the relationships and enable a more effective execution of the various roles and responsibilities.

34IoDSA Events

Year-end Member Cocktail - 23rd November 2017

36Lifestyle

20 Surprising factsabout coffeeAmanda Hawkins

1. Shepherds discovered coffee in Ethiopia circa 800 A.D.Legend has it that 9th century goat herders noticed the effect caffeine had on their goats, which appeared to "dance" after eating coffee berries. A local monk then made a drink with coffee berries and found that it kept him awake at night, thus the original cup of coffee was born.

2. Coffee is the second most traded commodity on earth.According to the Global Exchange, there are approximately 25 million farmers in over 50 countries involved in producing coffee. The number one commodity? Oil.

3. In Italian espresso means "when something is forced out."This refers to the way espresso is made – forcing boiling water through pressed coffee grounds. And, although espresso has more caffeine per volume than coffee, because it's consumed in smaller quantities, it actually has about a third of the amount of caffeine as a regular cup of coffee.

4. Coffee was the first food to be freeze-dried.The process of freeze drying – when fresh foods are placed in a dryer where

temperatures drop to negative 40 degrees F – first started during World War II to preserve foods.

5. There are two types of coffee beans: Arabica and Robusta.Seventy percent of coffee beans are Arabica. Although less popular, Robusta is slightly more bitter and has twice as much caffeine.

6. The majority of coffee is produced in Brazil.Brazil produces 40% of the world's coffee, which is twice as much as 2nd and 3rd place holders, Colombia and Vietnam.

7. Coffee was originally a food.Coffee berries were mixed with fat to create an energy-rich snack ball. It was also consumed as a wine when made from the pulp of coffee berries.

8. Coffee is actually a fruit.Coffee beans as we know them are actually the pits of a cherry-like berry that are grown on bushes. Even though coffee is actually a seed, it's called a bean because of its resemblance to actual beans.

9. There have been five attempts to ban coffee throughout history.Coffee was first banned in Mecca in 1511

because leaders believed it stimulated radical thinking. And, 16th century Italian clergymen tried to ban coffee because they believed it to be "satanic." However, Pope Clement VII loved coffee so much that he lifted the ban and had coffee baptized in 1600. But Ottoman leader Murad IV took it even further when he ascended the throne in 1623 by creating the first punishments for drinking coffee, which included beatings and being thrown into the sea.In 1746, the Swedish government made it illegal to even have coffee paraphernalia, including cups and dishes. And finally, in 1777, Frederick the Great of Prussia issued a manifesto declaring beer's superiority over coffee because he believed it interfered with the country's beer consumption.

10. You can overdose on coffee.However, you would need to drink over 100 cups to consume the lethal dose of caffeine.

11. New Yorkers drink almost seven times as much coffee as the rest of the U.S.

12. Finland is the most caffeinated country.The average adult consumes the equivalent of four or five cups of coffee a day.

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Need a place to work and eat? Speedy Wi-Fi, delicious snacks and fantastic coffee – everything you need for your daily grind. Where do you go when you’re completely over the view from your desk? A coffice, of course! Here’s our round-up of eateries in Jozi that have speedy Wi-Fi, delish snacks and fantastic coffee – everything you need for the daily grind.

8 awesome ‘coffices’ in Joburg

Urban Grind RoastersIf you’re hungry, best bypass this specialist coffee outlet – you can’t snack here, but what you can do is enjoy a truly superb cup of joe while your emails download in a whizz, thanks to fabulously fast Wi-Fi.

The WhippetHere’s the deal: you only get 45 minutes of Wi-Fi, and after that you have to pay. But you can overlook this once you’ve tasted the cake (try the Jode tart, layers and layers of pancakes sandwiched with Rooibos-infused custard or the Whippet cake, a concoction of milk tart, biscuits and lemon condensed milk). Grab one of the bar stools looking out on to 7th Street so you can watch Linden’s passing parade.

Coffee Exchange, ParkmoreThe industrial chic interior might be super-cool, but everything else – from the chill music to the sunshine that streams in through doors opening onto a neighbourhood pavement bustle – sets the scene for an easy and relaxed working session. Oh, and the coffee is easily amongst Jozi’s best.

Vovo Telo, ParkhurstVenture past the harvest table where the day’s baked goods taunt your best Banting intentions, and you’ll find the quieter backroom where freelancers, writers and PR people set up their laptops or woo prospective clients. The coffee is good, the restaurant buzz is balm to self-employed people seeking a bit of company, and the food is reliably tasty. If you’re doing a morning stint, try the Pain Perdu; decadent French toast drizzled with berry coulis, mascarpone and honey.

Motherland Coffee CompanyWith branches in Rosebank, Dunkeld West and Parktown North, Motherland’s menu isn’t especially large, but the range of bowls, pancake stacks, salads and paninis is fresh and tasty. The coffee is more than just a full-flavoured brew; Motherland is proud to support Fair Trade and uses beans sourced from the continent, so every cup is a boost for African farmers.

Brewtown in LonehillLonehill’s contribution to coffice culture offers up some irresistible caffeine options – espresso and peanut butter shake anyone? – Solid sandwiches and great cakes.

Croft & CoVisit Croft & Co in the mornings, and you’ll see so many laptops you’ll wonder if anyone still works in an office. This coffee shop’s appeal is easily understood once you’ve sampled the scrambled eggs – believed by many to be the creamiest served up in Jo’burg.

My Bread and Butter, ParkviewThis Parkview café, crammed full of chatting breakfasters, might not seem an obvious choice for a coffice, but walk through to the quiet back room (usually used for functions) and you’ll find everything you need to pass a productive day, including a cosy fire in winter. The morning menu gets a special thumbs-up; the salmon Eggs Benedict is particularly good, but there’s an expansive range of build-your-own options, too.

13. Coffee drinkers have a lower risk of Alzheimer's disease.Researchers found that older patients with high levels of caffeine in their blood were more likely to avoid Alzheimer's. Studies have also shown that caffeine has positive effects on type 2 diabetes and Parkinson's disease. It has also been shown to protect against skin cancer in women.

14. Coffee stays warmer when you add cream.Coffee with added cream cools about 20% slower than plain black coffee.

15. But when you add milk, it weakens the effects of caffeine.Our bodies absorb coffee much slower when it has added fat milk content, which decreases the stimulants.

16. The largest cup of coffee ever was brewed in July 2014 in South Korea.It was over 14,000 litres. The largest iced coffee was brewed in Las Vegas in 2010, and was 5678 litres — ice not included.

17. Just smelling coffee can wake you up.A group of scientists reported that simply inhaling the aroma of coffee can alter the activity of some genes in the brain, reducing the effects of sleep deprivation. And when you do drink that cup of coffee, caffeine reaches your blood fast, like 10 minutes fast.

18. Dark roast coffees have less caffeine than lighter roasts.Even though the flavour is often stronger, roasting actually burns off some of the caffeine.

19. Decaf does not mean caffeine-free.A regular cup of decaf coffee actually has two-to-12 milligrams of caffeine. In comparison, a regular cup of coffee has anywhere from 95 to 200 milligrams.

20. The original definition of coffee means "wine."Coffee's original name, qahwah, came from the Yemen term for wine. In Turkey it was called kahveh, until the Dutch referred to it as koffie, where we get the English coffee.

Source: www.goodhousekeeping.com

Source: www.food24.com

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Essential business reading brought to you by the IoDSA from getAbstract.

The IoDSA partners with getAbstractgetAbstract is a service that summarises the most influential business books published throughout the world and is included as part of the IoDSA membership.

To access your account, follow these steps:Log on at: www.getabstract.com/re/iodUsername: Please use your email address provided to the IoDSAPassword: Please use your IoDSA membership number

Books

Mapping InnovationA Playbook for Navigating a Disruptive AgeGreg Satell, McGraw-Hill, 2017

Innovation can be a long, tough slog. Consider the Macintosh. In 1968, US government engineer Douglas Engelbart demonstrated – in what is now called the ‘Mother of All Demos’ – how people could interact with computers. He used a keyboard and an innovation he called a ‘mouse’ to create, edit and move text on a screen and other seemingly magical things. Later, Xerox researchers enhanced his concept with the development of the Alto personal computer. But it wasn’t until 1984, 16 years after Engelbart’s demonstration, that Apple’s Steve Jobs transformed those developments into the Macintosh. That was fast action for its day, but innovation must move even more quickly now. Innovation expert Greg Satell explains how innovation works, what it requires, how to manage it and how to do it well. getAbstract recommends his comprehensive innovation manual to start-ups, investors, large firms and small businesses.

The Art of Connection7 Relationship-building skills every leader needs nowMichael J. Gelb, New World Library, 2017

Leadership expert Michael J. Gelb explains that many great businesses base their success on face-to-face communication. The leaders of these companies depend on seven personal relationship skills, such as practising humility and becoming a better listener, to increase the scope and the depth of their organisations. Gelb presents a compelling case that learning these skills can help you connect more profoundly with other people and with yourself. His supporting testimony from noted authorities becomes a little overwhelming, but his motives are clearly supportive. getAbstract recommends Gelb’s advice to everyone seeking to build better relationships, especially those in customer-facing jobs or in human relations.

Ask MoreThe power of questions to open doors, uncover solutions, and spark changeFrank Sesno | AMACOM, 2017

Former CNN anchor and White House correspondent Frank Sesno spent his career asking questions. Based on his ‘taxonomy of questions’, he explores the value of inquiry. Each chapter covers a different type of question, including ‘diagnostic, bridging, confrontational, mission, interview, legacy’, and more. Sesno also discusses interviewing experiences, and he includes a helpful guide to possible questions you might ask within each category. getAbstract recommends his helpful manual to executives, managers, media professionals, teachers, health care practitioners, and anyone who uses questions every day.

The Stress TestHow pressure can make you stronger and sharperIan Robertson | Bloomsbury USA, 2017

German philosopher Friedrich Nietzsche (1844–1900) said, “What doesn’t kill me makes me stronger.” Nietzsche saw people as capable of managing their own destiny. He didn’t see them as passive entities who couldn’t challenge fate. Psychologist and neuroscientist Ian Robertson reports that recent research backs Nietzsche’s position. If you wish to overcome adversity you must believe that you can. Richardson draws on his professional experience plus advances in neuroscience and psychology to offer a compendium of case histories that add up to a hopeful, inspiring message. getAbstract recommends his report to those responsible for employee welfare or those who’d like insight into their own ability to meet challenges.

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T he last issue of Directorship featured a range of articles looking at reputational issues through various

lenses. And yes, I was a contributor, as I don’t just write about wine. So why is reputation management critical?

Are you really aware that the reputation of most institutions and companies are impacted by the reputations of those at director or senior executive level?

In the run-up to Christmas, we had the future of a 106-year-old political party being debated largely around the reputations of a range of individuals; while at Steinhoff a whole array of corporate personalities find their reputations in tatters. As Warren Buffet said: “We can afford to lose money – even a lot of money. But we can’t afford to lose reputation – even a shred of reputation.” And then I have to ask how many South African boards have people on them who understand reputation and brand issues in today’s world? Crisis management is real, and silence is not the answer. The newly crowned richest person in the world is Jeff Bezos of Amazon, a company with the best corporate reputation in the US. He understands: ‘Your brand is what people say about you when you are not in the room.’

Now some of you will be asking what all this has to do with wine? The answer is,

quite a lot! Largely confined to the Western Cape – they can be so parochial – there has been an explosion of blends that without inside knowledge, you have little or no idea where they come from. This plethora of new labels also seems to believe it gives them license to charge some fairly fancy prices.

While I like to experiment, we all want to be sure we are getting value for money – hence the need to solicit good advice – or stay with the tried and trusted winemakers. Which brings me neatly to the Cape Winemakers Guild. I was privileged again to be at a tasting of their 2017 auction wines. Usually just under fifty or so members all produce limited edition specials, and each winemaker is there in person, and all made possible by a 22-year-old partnership with Nedbank. Looking around at the winemakers, I reckoned we had around 1250 years of experience in the room. Some are about to retire; Danie Steytler (Kaapzicht), Etienne Le Riche and Neil Ellis. All with towering reputations, great ambassadors for South Africa over many decades, and interestingly all passing the baton to sons. Others such as the Chairman of CWG, Miles Mossop, whose father was a giant of the industry, has just left Tokara to build his own label. One of the most

successful brands of late is Mullineux, and Californian Andrea Mullineux was there, who with husband Chris has been one of the reasons the Swartland region has become hot property. Sitting in the back row, were two ‘quiet men’ with huge reputations; Jan ‘Boland’ Coetsee (Vreisenhof) and Kevin Arnold (Waterford) tasting each wine as if for the first time, while beside them the irrepressible David Nieuwoudt of Cederberg was fully engaged in proceedings. To the other 80% of CWG members, I apologise for not mentioning you, but all members can be found on www.capewinemakersguild.com. There are, of course, many other rockstar winemakers outside the CWG, and there is an increasing number of international owners, so go and forage around. And remember, wine is not just for drinking. I think it was WC Fields or perhaps Keith Floyd who said: “I cook with wine; sometimes I even add it to the food.”

Wishing you all a good 2018 in every respect. Let’s make it a good vintage for South Africa, and I’m talking more than just wine.

Jeremy [email protected]

Fellow of the IoDSA

Wine

Wines you can trust

40

I n much the same way as Land Rover’s Range Rover Evoque captured consumer attention following its introduction to South Africa in 2011, so

too is the recently released Velar likely to prove a hit in the sales charts.

The all-wheel drive model – which slots between its smaller sibling and the larger and pricier Range Rover Sport – offers plenty of fashion appeal without deviating too far from the all-terrain path beaten by generations of its luxuriously appointed, safari-grade forerunners.

Like them, the Velar is eminently off-road capable – though Land Rover’s prediction is that very few buyers are likely to take the vehicle into the bush; a little gravel road driving and pavement parking forming the boundaries of most projected, adventure-related activities.

In the eyes of many, the vehicle represents one of the most effectively styled SUVs yet to be produced. While some of its artistically sculptured lines appear to have been borrowed from sister brand Jaguar’s F-Pace – with which it shares its platform – there remains plenty of functionality in its precision-crafted, minimalistic form.

Drag coefficient measures 0,32 – the lowest achieved by any Land Rover – helped by door handles that retract into the bodywork when the vehicle is on the move. Equally, headlight clusters are among the slimmest yet seen on an SUV – yet they house the latest and brightest in LED technology.

“Modernity, elegance and glamour, underpinned by strength, solidity and a fantastic presence,” is the way chief designer Gerry McGovern describes the Velar’s look, adding that tailored technology and innovation have been combined to create a vehicle that the company hopes will resonate on an emotional level with consumers.

In this sense the Velar could be said to have been styled to capitalise on the allure created by the Evoque, a model which helped to lift Range Rover’s popularity on a global level by creating a desirable new segment within the SUV sector. Like that derivative, the new model is said to represent a unique market niche.

On test drives during the vehicle’s launch in South Africa, the Velar drew attention wherever it went – its ability to stand out equaling its proficiency

in offering its occupants high levels of performance and comfort.

From the stylish interior with its easy-to-operate infotainment system to the diverse powertrain and body kit offerings in the line-up, the vehicle tended to deliver top-notch ratings for refinement, form and function.

From the inside, the car’s appointments are likely to be characterised as elegant though simplistic, with trim lines flowing gracefully across the fascia and along the doors. “An unwavering belief in reductionism has been fully employed, with switches being kept to an absolute minimum to help create a calm sanctuary,” is how a company statement describes the cockpit.

Centre piece of the cabin is the infotainment system – dubbed the Touch Pro Duo – which features two 10-inch high-definition touch screens that have been integrated seamlessly into the dashboard behind hidden-until-lit surfaces.

The upper screen houses navigation, audio and communication functions while the lower unit is used to operate settings for the air-conditioning and the

Road Test

Velar sets the pace

The much-anticipated fourth member of the Range Rover family has arrived – a mid-sized, five-seat, luxury SUV that aims at delivering superior levels of refinement, modernity and technology. Wynter Murdoch reports.

41

brand’s trademarked Terrain Response chassis and powertrain controls.

The system is user friendly and easy to navigate, the intuitive displays working with the cabin’s architecture to add elements of modernity. Steering-wheel-mounted touch controls include a module for managing audio programming and volume via an iPod-like circular interface.

Though leather upholstery is invariably mandatory in a Range Rover, the Velar offers as an alternative sustainable, premium textile seat material. The cloth – manufactured in Dapple Grey – has been developed in conjunction with Danish company Kvadrat, said to be Europe’s leading manufacturer of high-quality designer textiles, and is complemented by suede inserts in Ebony or Light Oyster.

The light, stiff, aluminium-intensive body, together with double-wishbone front- and integral link rear suspension, provides a good basis for agile handling and ride comfort. While less resolute in feel than those on Jaguar’s F-Pace, the underpinnings prove adept at soaking up bumps while keeping the upper structure on even keel, helped by four-corner air suspension on top-level, V6 models. Electrically assisted power steering is light but precise.

From the off-road perspective, ground clearance is said to measure 251mm – deemed to be class-leading – though the figure drops 38mm to 213mm for models that aren’t equipped with air suspension. Similarly, wading depth drops from 650mm to 600mm for vehicles with coil springs only. Traction technologies across the range include Terrain Response 2 and All Terrain Progress Control.

Power is supplied by a choice of petrol and diesel engines from Land Rover’s Ingenium range, each matched to smooth-shifting, eight-speed ZF automatic transmissions which incorporate Intelligent Driveline Dynamics.

The diesel units – four-cylinder, turbocharged 132kW/500Nm and

177kW/500Nm variants as well as a similarly force-fed V6 that produces 221kW and 700Nm – are said to be clean and refined. The petrol engine line-up – four-cylinder plants that deliver 184kW/365Nm or 221kW/400Nm – is complimented by a supercharged V6 that delivers 280kW and 450Nm.

During the launch I was impressed by the punch offered by the 177kW diesel engine and the smoothness of the supercharged V6, the latter’s ability to offer kick-in-the-back acceleration – accompanied by a sonorous sounding exhaust note – adding appeal.

Common to each of the models was the degree of refinement palpable in the ride quality, with little wind noise, vibration or harshness intruding into the cabin. As eminently comfortable fast tourers, each of the models scored highly for their suppleness in riding undulations and their ability to please and reward in the

performance stakes.Specification levels run from the

standard Velar, through the usual S, SE and HSE nomenclatures, with sportier body kit and wheels available if you opt for R-Dynamic derivatives. Additionally, customers are able to specify Black and Premium exterior packs for an individual look or, alternatively, build their own Velars using Land Rover’s Configurator.

All models are sold with Land Rover’s Five-Year Care Plan: a five-year/100 000km service plan, a five-year/100 000km maintenance plan and a five-year/100 000km warranty.

A couple of things: The model designation for each variant is determined by the output of the engine in horsepower, prefixed by whether the unit is driven by petrol or diesel. Prices of the models range from about the R950 000 mark for the standard version to more than R1,5-million for a First Edition variant.

"Modernity, elegance and glamour, underpinned by strength, solidity and a fantastic presence.”

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Museum Kimchikan This is a museum dedicated to kimchi; one of the staples of Korean cuisine and the country’s first-ever food museum. Exhibits focus on the food's history, its many historical and regional varieties, and its importance to Korean culture and cuisine.

The museum collects data and statistics on kimchi, and regularly offers activities for visitors, such as demonstrations of the kimchi-making process, kimchi tastings, and cooking classes. There are detailed explanations of the process of making kimchi, with a diorama for each step,

Samsung D'LightInside Samsung’s head office is an exhibition space showcasing the latest product line-up by Samsung Electronics. There are three storeys filled with Samsung – televisions, mobile phones and gadgets from the company’s past, present and future. It’s a space of interaction, meaning that you can check your own laptop’s content on gigantic screens, play online games from your mobile phone, and test out new developments.www.samsungdlight.com

NantaNanta is a silent production, heavy with comedy. It is native to South Korea and performances take place in as many as five theatres in Seoul. Be prepared for props to come flying your way – balls, carrot shavings and cabbage chunks and the like – and possibly be hauled on to the stage to participate.www.nanta.co.kr

Travel

Seoul, the capital of South Korea, is a huge metropolis where modern skyscrapers, high-tech subways and pop culture meet Buddhist temples, palaces and street markets. If you find yourself with a few hours to spare in this vibrant city, here are a few ideas of where to go.

4 hours in SeoulKate Kennedy

Nanta

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items through an online cyber museum. These permanent exhibitions have free entry, but some wings of the museum host temporary exhibitions of art or photography. It’s worth checking out the museum’s website to see what’s going on before you visit. eng.museum.seoul.kr

N Seoul TowerGet up high for great panoramic views of Seoul. Situated on top of the Namsan Mountain (represented by the N in the tower’s name) the structure stands nearly 480 metres above sea level, making it one of the highest towers in the Orient. At the base of the tower is the Seoul Tower Plaza, which was recently opened to the public and includes a number of restaurants and a gift shop. The tower is a source of great interest for the locals thanks to its Digital Observatory and 32 LCD screens recounting the 600-year history of the city. www.nseoultower.co.kr/eng

C Through Coffee enthusiasts will enjoy a visit to this café. Owner and barista Lee Kang-bin is well-known in Korea as a coffee artist. He is noted for his ‘Creamart’ which is essentially Dutch coffee with thick sweet cream decorated with an elaborate painting on top like Van Gough's The Starry Night which he makes for a single customer a day. If you’re not lucky enough to be that customer you might want to try the Scotchino – a Scotch candy-tasting drink, overflowing with sensuality. It comes in a mini tea cup with the thick foam overflowing the rim, sprinkled with cacao and coffee powder and tastes both sweet and slightly bitter at times.

of the Joseon Dynasty continued to expand the palace, but much of it was destroyed during a slave rebellion in 1592. Reconstruction started nearly 300 years later, in 1867, when over 300 new buildings expanded the complex to 5,792 rooms, covering 410,000 square metres of land. Today, only about 40% of the original buildings exist. Three tours a day are given in English, and the royal changing of the guard is held in front of the main gate every hour from 10h00 to 15h00 – definitely something not to miss. www.royalpalace.go.kr

Seoul Museum of HistoryGet a real feel for the Seoul of old, its traditional culture and even its landscape. Exhibits cover everything from the prehistoric era to modern Seoul. Many relics from the Joseon Dynasty were donated during the Relic Donation Campaign, so you’ll get a good sense of what the city was like at its founding. Another exhibit showcases the daily life of the Seoulites, while another presents

and a section in which people can view the typical environment in which kimchi would be made, including the historic pottery forms used for the fermentation and storage processes. You can also get a closer look at the Lactobacillus bacteria in kimchi through a microscope. English Audio guides are available and a guided tour is also available at designated times.

Gyeongbokgung Royal PalaceThe ‘Palace Greatly Blessed by Heaven’ has the longest and most storied history of any Korean palace, beginning in 1395, three years after the beginning of the Joseon Dynasty rule. Later kings

Museum Kimchikan

Seoul Museum of History

Insight

Below are seven habits I’ve seen show up in most of the successful business owners I know.

7 Essential habits of successful business owners John Jantsch

7. Love to learn, learn to teachSome of the most successful business owners are really great at selling, but they don’t sell so much as passionately teach. Here’s the funny thing though, many don’t actually like to teach. Just ask someone who works for a small business owner. They are rarely very good at teaching employees how and why to do things, but they are generally insatiable learners who realise they need to figure out how to teach and tell stories in order to succeed.

5. Fill the gapsSuccessful business owners seem to always be asking what’s missing. This can develop into a distraction, but when you stay really, really close to your customer you can start to recognise gaps in what you have, how you communicate and what they want. There are few better ways to succeed in business than to find a need and fill it – all the better when that need exists in people who already trust you to serve them. The key is to understand your customer’s world and journey to get the information, products and services they seek.

3. Obsess over valueA lot people preach the idea of obsessing over the customer, but I’ve found that real success comes from obsessing over value – valuable products, processes, communication, follow-up, service, content, connection and context. When you obsess about delivering value, measuring value and increasing value in everything you do, you start to realise that everything matters and there are no small things – and there’s no better way to serve your customers than that. This is a subtle thing – the best way to serve your customers is to obsess over value.

1. Get up earlySo, let’s start with a tough one right off. Successful business owners get a tremendous amount of focused work done from about 5am to 7am. Now, this may or may not be client work. It’s just as likely to be journaling, meditating or planning the week, but it’s how they get a jump on the coming storm of the day. I started this habit myself in an attempt to get a few things knocked out before my children got up and it stuck even after they moved on. For me it seems like the only quite time that exists in the day.

6. Get out of the officeThese days you can run your entire business without actually interacting with other human beings, but human beings need to interact in order to live. If you’re to grow, feel, learn, and understand you’ve got to get out of the office. Go to a conference, grab coffee with a customer and mingle with people who are weird (your definition.) It’s how you find strategic partners, new perspectives and opportunities to learn and grow.

4. Take care of the plantRunning a business is physically demanding and mentally stressful. Yes, it’s also a pretty awesome ride, but only if you maintain the stamina to put in long, high energy days. The most successful business owners I’ve worked with take time to recharge, reenergise and refuel through things like exercise, healthy eating and rest. Once you’ve been doing this for a while you start to realise that the time you invest in these kinds of things pays some pretty hefty dividends in terms of productivity. This is pretty easy one to develop bad habits around too, so finding ways to create accountability is essential.

2. Focus on important firstThis one is so hard because Twitter and Facebook and email just don’t want you to do this. Successful business owners ignore distractions and focus on the highest payoff work first. This may include doing the grunt work they don’t really want to do. This a mental win as much as a physical to do list win. There’s something really freeing about realising you’ve conquered the toughest thing you have to do that day by 9am! On the days I actually do this I get so much more done in total because I don’t fuss around trying to figure out how to put off what I know I should do.

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Business Travel Club

ABU DHABI No pit-stop

ISSUE 112: February 2017 www.businesstravellerafrica.co.za

ABU DHABI No pit-stop

PRETORIA Worth a visit

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