Are directors going overboard?
SIMPLE TASTES: Bill Gates, the world’s richest man, plays table tennis during a Berkshire Hathaway meeting weekend in May DESPITE criticism that nonexecutive directors who serve on more than five company boards are overcommitted, there are still several people who hold many board positions.
Makwe Masilela, a stockbroker at BP Bernstein, said a board member should provide valuable input, for which they are remunerated.
A seat on a board comes with a lot of responsibility.
“The new Companies Act allows for directors and nonexecutive directors to be held personally liable. Most nonexecutive directors are full-time executives somewhere,” Masilela said.
“For these reasons it is not rocket science [to realise] that holding more than one nonexecutive position will be very demanding and can easily compromise your expected valueadd.”
Last year, Jannie Durand led the pack of those with multiple board memberships. He held 9 paying directorships, pocketing total pay of R12.1-million in the process.
This was up on his total earnings of R11.2-million in 2013 and R7.3-million in 2012.
His directorships are at Mediclinic International, Distell Group and RMB Holdings, among others.
Christopher Seabrooke followed with eight paying board positions, BOARD-GAME WINNER: Jannie Durand managed 10 directorships resulting in earnings last year of R12.8-million, compared with R11.9million in 2013 and R12.8-million in 2012. Seabrooke sits on the boards of Sabvest, Transaction Capital and Torre Industries.
Len Konar’s seven paying directorships earned him R5.6-million, down from earnings of R6.6-million in 2013 and almost R6.2-million in 2012.
In 2014 Konar sat on the boards of Exxaro Resources, Lonmin and Steinhoff International, among others.
Ralph Patmore, who sat on five boards for fees including Calgro M3 Holdings, Accentuate and Mustek, earned R1.8-million in 2014.
Also near the top of the rankings were Peter Mageza, who held six directorships, Phumzile Langeni, who had five, and Johnny Copelyn
Holding more than one nonexecutive position can compromise your value-add
with four.
Zarina Bassa was also active on four boards for Woolworths, Sun International, Oceana and Kumba Iron Ore, earning R1.8-million in total.
An analyst, who declined to be named, said shareholders were correct in questioning multi-board membership.
The analyst said nonexecutive directors, under the provisions of the Companies Act, had a very important function — to ensure good corporate governance.
“As such, he or she must dedicate the time to be able to perform the job properly.”