Any review of the structure and methodology to be applied to the vexing intersection between shareholders and directors and governance at SMEs should also focus on sound corporate governance, or the lack thereof, to be adhered to and exercised by such directors. who are also shareholders. This article will only deal with some of the read more..
Front-line remuneration – focusing on what is sold is not enough. How the employee does the job is at least as important as what the employee does. How we incentivise and reward customer-facing staff is pivotal to company culture and customer outcomes. In many cases, variable remuneration arrangements incentivised behaviour that was adverse to customer interests. The read more..
Executives continue to get very well paid when companies do well, but also get very well paid when results are poor. Executive remuneration is lacking in symmetry with the performance of the enterprise. This gap between payment & performance and the short-term nature of these rewards incentivises an obsession with the short term, I think. read more..
Are stock options the root cause of all the major shortcomings of capitalism? Can we blame the incentives for the evils of capitalism? This article by Tim Cohen appeared in the Business Day in 2011 (2011-11-10 to be precise) already. Backlinking to the original article, unfortunately, is not available anymore. The Big Three He says, read more..
Corporate governance in South Africa differentiates between non-executive directors (“NED”) and independent directors (“ID”) of companies. An ID is defined as a person who has no interest, position, association or relationship with the company or its executives. NEDs by definition are neither full-time executives nor IDs. We will refer to both of these as NEDs read more..
Internal pressure is a pervasive threat to the internal audit's objectivity. Nothwithstanding this, the internal audit function of larger enterprises is critical for assessing the maintenance of good governance. It provides the audit committee and the board with a clear, unfettered view of internal compliance with company policies. Few people are aware that amongst internal read more..
It is important to note that unalterable provisions pitch the MoI vs the Companies Act. The latter will always prevail over provisions of the company’s MOI. What are the alterable provisions? Cliffe Dekker Hofmeyr ("CDH") noted that "proxy appointments are a critical tool to ensuring that meetings proceed and decisions are made, where shareholders/members cannot read more..
Managing personal conflicts of interest in the workplace is not receiving enough attention. Do you have a program to manage potential areas of conflict of interest? Does your company have a policy to counter conflicts of interest? Who is responsible for its oversight? Areas where potential conflicts of interest could occur Here are a number read more..
"The business rescue process of South African Airways, which, after almost eight months and billions of rand, is still not complete, has put the spotlight on whether business rescue is indeed a viable option provided by the Companies Act." says Carin Smith of Fin24. The success rate of business rescue in South Africa is approximately read more..
Ever wondered why a board opts to buy back the company’s shares? A share buy-back is almost always the subject of a shareholders’ resolution at each AGM of an issuer. Common sense dictates that boards resolve to pursue a share buy-back arrangement under the following circumstances: A discount exists between the current market price and read more..