Governing Body and Executive Remuneration: Is there Sustainability in this Important Factor in Business? Part 9 China’s China’s trial- trial- and- error

Platform In our last article, as a continuation of the discussion, we concluded our thought process in our insistence upon recruitment of the firsttime director prospective appointees. We recog

UB salary demands a smokescreen

nised the multiplicity of their virtues, examples In this article, we will cover further aspects of clients and of course some consultants. In terms of which are new entrepreneurial skills, currently this aspirational directorship development. We of King IV Report, Principle 9, “The governing trending qualifications, their youthfulness, etc. have discussed the assessment of the first- time body should ensure that the evaluation of its

We noted the fact that as a country we lost on prospective director appointees and their related own performance and that of its committees, not pacing up professionalisation of directorship gap- filling training, recruitment in consideration its chair and its individual members, support

to disparage Vice- Chancellor

with other corporate development and entrepreof their skills and experiences which compose continued improvement in its performance and neurship as were sourced from the mining develtheir competencies. effectiveness.” opment in Botswana at the time which mining was We further covered their joint induction includThen when is evaluation conducted? a source of development. ing the experienced directors, general training in It can be conducted after about the end of

However, we appreciated that it is not all lost many dimensions inclusive of some soft skills, financial year or one year following its inaugural since we still experience further entrepreneurial such as: interpersonal skills, emotional intelinduction. Pat Mahony states that “A useful guide development in other economic factors of diverligence and other relationships interaction and would be to schedule the evaluation somewhere

in contributing towards economic growth embarrassing. What saddened me

sification in business. We further noted some soft engagement skills. around the completion of three quarters of the

of skills the reflective country. of personal In his message, attributes that he can put rewas that these individuals are professors

The other important aspect of boards develfinancial year.”

search easily facilitate and innovation the first- time director as a cornerstone prospective to opment is board evaluations which is not satisMy research and has discovered senior lecturers. about ten dimen

appointee evaluation and training. factorily understood by many people including sions of board evaluations differing with their

the University being in a position to play Their research profiles do not even

impacts on the organisations undergoing the

this role. The Vice- Chancellor also spoke what could be expected of junior lectur

evaluation process.

Having discussed ers. some One aspects wonders of board how develon earth

opment, we would individuals now like to were confine promoted ourselves to professor

to the remuneration policy which is the main

positions. Frankly and with all respect

topic of this recent series of articles. Then what is a remuneration promoting policy? these individuals to professor

“It is the policy and that senior provides lecturer guidelines positions for the was an

implementation of the rewards strategy and the

to the academic profession. I call upon

design of the rewards management process. It,

Vice Chancellor to rescind these promo

further, gives guidance on how the remunerations are offered and tions why it if is it so; was it aligns possible. the Board, After my perusal

management, and shareholders’ interests for the

the performance of those who detract

purposes of strategic goal congruence.

University from moving forward, my

“It guides and informs managers and employees, as a primary governance that the instrument, Vice Chancellor to was

ensure remuneration decisions are channelled

detested for calling for UB’s transforma

through the appropriate approval framework”

tion was completely confirmed. Instead

( IoDSA Guidance for Remuneration Committees, 2020). working hard, these individuals choose

It should also insult be borne the in Vice mind that Chancellor. the remuneration policy accompanied by its implementa

The University of Botswana must

tion report serves at a role delivery stage which is

saved from these detractors. There

preceded by an array of technical frameworks that plan and design many all the requirements things promoted of executive by the Union

remunerations.

In terms of principle 14 of King IV Report,

“The governing body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term.”

Practice 26 states that “The governing body should assume responsibility for the governance of remuneration by setting the direction for how remuneration should be approached and addressed on an organisation- wide basis.”

It is worth noting that executive remunerations are controversial aspects of the business as it is well known that one of the most expensive accounts is that of human capital compensation.

Therefore, executive remuneration has a threat of actual, perceived and/ or potential reputational risk to the business.

Based on that, the boards should be aware of and ensure that the composition of the remuneration policy sets the appropriate criteria for its regular evaluation for the purposes of its essential contribution to the organisational performance evaluation and transparency.

It should further be borne in mind that the remuneration policy takes the helicopter view of the entire human capital compensation in all organisations. Now why is the policy and its related topical issues confined to executive remuneration?

To be frank with the reader, the policy and its related factors are concerned with the cadre that matters a great deal to the corporate setting.

Therefore, due to the inconsequential effects of the lowly paid staff members’ compensation to the remuneration structure, their disclosures in the corporate performance are negligible.

Those disclosures will never even lure the eyes of the paparazzi. Incidentally, contrary to expectations, the press and the other benchmarking regulators measure the corporate remuneration disparities by dividing the Chief Executive Officer’s ( CEO) income by that of the income of the lowest paid staff member.

In the next article, we will continue with some salient pointers of the policy. We extend our warm gratitude to our readership feedback.