What the new SABC board could look like
When Parliament begins discussing the nominees for the SABC’s interim board, it will have an opportunity to make a significant change. Since it is an interim board, candidates with the ability to manage a crisis and with expertise in restructuring are likely to be considered.
While the board’s immediate priority will be to resolve the failures in management, members of the interim board may stay on as permanent board members. The nomination process requires long-term thinking and planning, which could allow for a high-performing and agile SABC board.
Another task Parliament faces will be appointing people who are accountable to stakeholders — including taxpayers and to the function a state broadcaster plays within an emerging economy with vast economic disparities.
Appointing the right board for any company stems from whether proper corporate governance was followed in the process. Did the executive seek objective or external advice to find the right members? Did they understand what criteria make up a successful board? Are they aware of how the changing business world is expecting more agility?
When using an independent third party, the process of board appointments is not only streamlined, but can assist with navigating the latest regulation and ensuring international best practice. Cronyism falls away in favour of merit through a robust appointment process.
A strong board needs diversity. At the time of the 2008 financial crisis, men mostly dominated corporate governance leadership at institutional investors. Now, seven of the 10 largest institutional investors in stocks have women as heads of corporate governance, according to data compiled by The New York Times.
The financial crisis illustrated how business strategies driven by groupthink can cause entire economies to implode. While a transformation agenda can help encourage diversity, there is also risk in linking transformation solely to gender or race. Diversity comes from age, from working across geographies and from life experience. For example, chief digital officers are being appointed to boards, and their average age is 28. Companies with operations across regions ensure South African board members sit on Kenyan boards and vice versa. Firms not in the financial sector are hiring investment bankers from Panama who studied law in Georgetown and lived in New York.
PRACTICAL SKILLS
A diverse and transformed board should not be compromised by a lack of practical business skills and an understanding of how a particular company operates. Based on the briefs we receive from clients, black female chartered accountants are among the most sought-after board members.
To meet the requirement for tacit expertise, former executives of companies are rejoining their boards. Recent examples include Standard Bank appointing former CEO Jacko Maree to its board. Sizwe Nxasana, former CEO of First Rand, is to join his former employer as nonexecutive deputy chairman.
There are success stories where CEOs move directly into a board position after retiring, but best practice requires a break of two or three years, not only from the company but the sector. This encourages fresh thinking and diversity.
A more sustainable approach to developing an already increasing talent pool of quality board members in SA is critical.
Companies should consider board assessments and developing board-specific succession plans. Assessments help ascertain personality traits as board members carry personal liability, making it vital to get seats filled with the type of people prepared to take on this risk.
The onus falls on all companies to develop this talent, ensuring that boards have the right balance between diversity, transformation and practical skills. The future of the SABC and other companies across SA will surely benefit as a result.