Call for Africa to increase its pool of directors

THE African Corporate Governance Network said yesterday it would be lobbying governments to improve continent-wide governance standards, but also help grow the pool of company directors, which is way too small.

Corporate governance failures continue to blight companies and governments across the continent, but the network, which now represents 14 African countries since being founded last year, said the shortage of experienced and skilled directors was one of the chief hurdles to the strengthening corporate governance capabilities.

While the gap between CEOs and average workers in SA remains far wider than in other developing countries, at 73 times, some experienced board members sit on as many as 80 boards, which is above global levels.

Inoxico Research has found that the directors of SA’s 20 largest firms held on average 14 external directorships, raising risks of conflicts of interest.

The African Corporate Governance Network said it would conduct research and store information on corporate governance to create a resource for its members to use, particularly when it came to supporting the ongoing training of a pool of directors.

“The continuing expansion of the network is good news for Africa’s growth prospects,” said Angela Oosthuizen from the Institute of Directors in Southern Africa.

Carl Bates, group CE of Sirdar SA, which focuses on improving governance standards at small and medium businesses, said the idea of a continentwide standard was not a pipedream. “Because there are corporate governance failures, we need to step up to the next level.” He said it would give governance institutes in Africa something to aim at, as well as setting standards for governments to work towards.

The network’s chairwoman, Jane Valls, said as the economies in Africa were diverse in terms of economic and political maturity and there was also no continent-wide standard of corporate governance, more lobbying would be needed.

“We have a critical role to play in lobbying legislators, as well as educating both the private and public sectors about the benefits of corporate governance.

“SA is fairly mature in corporate governance terms, having released the first King Code in 1994 and with the fourth revision now under way. We are committed to making our experience available to our colleagues in the network, and hope that King IV will act as a benchmark for African codes of corporate governance,” said Ms Oosthuizen.