Jan | Feb | Mar 2019

www.iodsa.co.za

Digital disruptionWhat is the business

impact

The role of associations in regulation professional

conduct

IoDSA reputation survey feedback

BUSINESS ACCOUNTABILITY:WHOSE ROLE IS IT ANYWAY?

Filling king-sized shoesSuresh Kana new King Committee Chair

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CONTENTS6

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02 From the IoDSA by Angela Cherrington

03 Directors concerned about more than the bottom line

04 Suresh Kana – Leading corporate governance in SA

06 Accountability – whose role is it anyway?

by Samantha du Chenne

08 The role of associations in the regulation and promotion of professional conduct standards by Adv. Jacqui Grove

10 IoDSA's 4th year of reputational excellence

12 Reputation requires a seat in the boardroom

by Janine Hills

14 How are Reputation Risks different from other risks and how should they therefore be managed? by Dr Dominik Heil

15 FAQs: Governance Research Platform by Julie Dixon

16 Lessons from the boardroom: Governance form vs function by Parmi Natesan & Professor Deon Rossouw

18 Digital disruption û What is the business impact and how can boards prepare? by Lynette Dicey

20 Is there any good news in the 2018 Medium-term Budget Policy Statement? by Kemp Munnik

22 Awareness of personal values: the first construct of innovation leadership by Robert Louw

24 The gap between remuneration and performance by Guy Addison

26 Conversing curiously about gender diversity by Joy-Marie Lawrence

28 Leadership and the critical success factors for black leader integration into large businesses

by Dr Biren Valodia

30 Shadow director jeopardy stalks SA advisory boards

by Auguste Coetzer & Michael Judin

32 Member achievements33 Member profile - Janet Hugo35 Book reviews36 Wine: When demand exceeds

supply by Jeremy Sampson

38 Road Test: Prado shows its prowess!

by Wynter Murdoch

42 Travel: 4 Hours in Berlin44 Insight: The Longevity Dividend by Lynda Smith

Publisher: Richard Lendrum Editor: Angela Cherrington Managing Editor: Debbie Bassa debbie@thefuture.co.za Layout: Nadette Voogd Production Manager: Mabel Ramafoko

Directorship is published by Future Publishing (Pty) Ltd. Opinions expressed in Directorship are not necessarily those of the publishers. Permission to re-publish any article or image or part thereof must be obtained in writing from the publisher. © Future Publishing

Non-Executive Directors

Prieur du Plessis (Chair),

Ntuthuko Bhengu, Sana-Ullah Bray,

Zeona Jacobs, Patrick Kabuya,

Felicia Msiza, Pumla Radebe,

Muhammad Seedat (Lead

independent director),

Louisa Stephens

Executive Directors

Angela Cherrington (Oosthuizen)

(Chief Executive Officer),

Parmi Natesan (CEO Elect).

Offices

National Office

info@iodsa.co.za

(011) 035 3000

www.iodsa.co.za

Western Cape Branch

iodwestcape@iodsa.co.za

KwaZulu-Natal Branch

iodkzn@iodsa.co.za

Inspiring new hope

@angelao28

Connect with the IoDSA on social media

@The_IoDSA#DirectorshipMag

www.facebook.com/ TheIoDSA/

Institute of Directors in Southern Africa

From the IoDSA

T he new year is upon us, and while we wait in anticipation to see what 2019 will hold for

business and the economy in SA, this edition of Directorship delves into a number of critical issues.

The theme for this edition is reputation management; and for the fourth consecutive year the IoDSA has engaged with Reputation Matters to conduct their annual reputation survey, taking stock of stakeholders’ views and feedback. In this issue, we look at their latest findings. The Repudometer®, Reputation Matters’ reputation measurement tool, was used to obtain the results. Five core dimensions were measured, namely Corporate Management; Corporate Capital; Corporate Positioning; Corporate Performance and Corporate Dialogue.

Stakeholder groups who formed part of this year’s study were employees, as well as members, non-members and past members of the IoDSA. The IoDSA’s reputation score for 2018 is 84%, scoring well

on all Repudometer elements, with just one section dipping below 80%. Overall, the 84% score is rated as excellent.

In this issue, we also look at some of the findings from the inaugural Global Director Survey, which reveals that directors worldwide are concerned about more than just the bottom line. According to findings released by The Global Network of Director Institutes (GNDI) on 20 September 2018, poverty and income inequality are the top concerns for directors around the world, closely followed by taxation and government spending, and the cost of healthcare.

Newly appointed chair of the King Committee, Professor Suresh Kana, succeeds Professor Mervyn King in the role. Kana is no stranger to the IoDSA, working with the organisation since the early days of his career as a technical partner at Coopers & Lybrand; and on the King Committee, where he has been a member for the past 18 years and was involved in the drafting of King II, III and IV. Directorship chatted to him about what being appointed as chair of the King Committee means to him on both a professional and a personal level, as well as his plans for the committee going forward. In addition, we gain a glimpse into the life of the man behind the committee.

Kana believes the prevalence of corporate scandals

rife in SA at the moment are the result of weak, unethical and unacceptable governance practices. Good governance, he says, is about setting the right tone at the top and depends on a number of different elements working together cohesively: accountability and transparency, ethical leadership, effective management of risk and opportunity and decision making.

The article entitled ‘Accountability – whose role is it anyway?’ examines the issue of accountability amongst professionals. Fostering accountability in the business landscape is crucial, particularly in light of the spate of corporate scandals to have hit South Africa in recent times. Although professional bodies play an important role in upholding the relevant codes, professional standards, rules and regulations, it is also the responsibility of these professionals to return to the basic values of their profession and hold themselves and their colleagues accountable.

Yours in membership service.

Angela CherringtonChief Executive Officer

3Insights

Directors concerned about more than the bottom lineFindings from the inaugural Global Director Survey 2018 show poverty and income inequality as the top concern for directors around the world, closely followed by taxation and government spending, and the cost of healthcare. The Global Network of Director Institutes (GNDI) released the findings earlier this year.

A ccording to Angela Cherrington, GNDI Chair and IoDSA CEO, “The survey highlights that directors around the world share similar

concerns and challenges as they look to the future for the organisations they govern.”

“Within the global picture, regional findings showed poverty and inequality were most concerning for governance communities in Africa-Middle East and Asia-Pacific. Taxation was the biggest concern for directors in the Americas, while directors in Europe were most concerned about the cost of healthcare.”

The Global Director Survey was conducted over six weeks from mid-May to end of June 2018 by the Institute of Directors of New Zealand on behalf of the GNDI.

2,159 directors from 17 countries participated in the survey. 53% of participants served on three to four boards, indicating solid experience and broad insights. 36% were on boards of private companies, 23% were on boards of listed companies, and 22% were directors of not-for-profit organisations.

“This survey helps us to understand the big challenges, opportunities and trends emerging globally for directors working with organisations around the world. Directors have a critical role in society as agents of good governance and as decision makers driving future investment and growth.”

The Global Director Survey Report 2018 provides wide-ranging insights into the

topics that are top of mind for directors worldwide, including social and economic issues and risks, business confidence, governance practices, technology and data governance.

Big Data top technological disruptorBig Data also ranked high on the global agenda as a potential disruptor – 63% of directors from around the world regarded Big Data as the top technological disruption to their organisations.

“Although Big Data is on the governance radar, many boards are not taking advantage of it to improve effectiveness, boost performance, mitigate risks and improve data privacy,” said Cherrington. “There are immense potential benefits from data and data analytics, alongside equally significant privacy risks.”

The Global Director Survey found that though 61% of directors had good or excellent understanding of their organisation’s data privacy practices, 37% felt they had limited or no understanding.

53% of directors surveyed believed their boards understood cybersecurity and cyber-risks to their organisations.

“Boards have a key leadership and oversight role in data governance. For a board to ask management the right questions and hold management to account, they need to understand and address data privacy and cybersecurity issues as they arise.”

Focus shift to triple bottom lineEthnical behavior, health and safety and

employee engagement were of particular relevance to the directors surveyed.

Environmental issues rated lower in the survey, however, Cherrington expects that over time environmental issues will be more on the board radar.

“Wider environmental concerns can impact the sustainability of organisations long-term,” explains Cherrington. “The environment, climate change, carbon-related issues and resource management will become more important and part of the conversation for more countries as the Paris Accord and United Nations Sustainable Development Goals get more attention.”

Directors’ business confidence generally positiveThe Global Director Survey 2018 also probed directors’ business confidence. The survey found 45% of directors were “mostly” or “very confident” about prospects for growth over the coming year. Another 36% were “moderately confident”. Private and listed companies were more confident than not-for-profit and government organisations.

The GNDI is an international collaboration that shares expertise in directorship and corporate governance. GNDI collectively represents more than 130,000 individual directors and governance professionals. It aims to develop and promote leading practices and programmes that enhance the capability of directors to drive sustainable performance for the benefit of shareholders, the economy and society.

"Directors have a critical role in society as agents of good governance and as decision makers driving future investment and growth."

4Profile

Leading corporate governance in SA

Newly appointed chairman of the King Committee, Professor Suresh Kana, is the first person to succeed Mervyn King in the role. Kana is no stranger to the IoDSA, working with the organisation since the early days of his career as a technical partner at Coopers & Lybrand; or the King Committee, where he has been a member for the past 18 years and was involved in the drafting of King II, III and IV.

K ana retired as CEO of PwC Africa in 2015, after spending 40 years with the business. He began his career with the firm in 1976 (then

known as Coopers & Lybrand) and stood out in the history of the business as the first professional person of colour to be employed there.

By 1985, he had been admitted to partnership and was responsible for Accounting and Auditing Technical matters. Kana maintains that this role provided him with the platform he needed to promote the common, consistent standards so vital to the profession.

The promotion of best practice within the accounting profession has been close to Kana’s heart from the outset; as Chair

of the Auditing Standards Committee (ASC) for The South African Institute of Chartered Accountants (SAICA), he was put forward as a candidate to join the International Audit and Assurance Standards Board (IAASB) in 1995. Joining the IAASB, the body responsible for setting the standards for auditors all over the world, enabled him to contribute to the development of quality auditing standards on a global scale. Kana went on to serve on the IASB for nine years, chairing a number of its projects.

Another of his passions has been the desire to improve the quality of directorship in South Africa. This led to his involvement in drafting a number of papers at Coopers & Lybrand on the roles

and responsibilities of directors, which were endorsed by the IoD, led by Richard Wilkinson at the time, he recalls. “We were living in a post democratic South Africa and there was a dire need for directors that came from previously disadvantaged backgrounds; both to represent the country and to broaden their own skills,” he elaborates.

The development of human capital was always top of mind during his tenure at PwC. As a result, he formed the PwC Business School in ten countries across Sub-Saharan Africa in order to promote ethical leadership, good governance and impart business skills to industry and the firm’s people across Africa.

In his current role, Kana serves as a

The challenge of filling king-sized shoesBy Samantha du Chenne

5

The evolution of the King Reports and Codes, as well as the thought leadership and principles over the years is remarkable.

non-executive director and chairman of a number of companies listed on the JSE and London Stock Exchanges. Kana is also the Chairman of the United Nations World Food Programme, which provides humanitarian food assistance to over ninty million beneficiaries in over eighty strife torn countries or countries affected by famine or climate change.

When he has spare time, Kana is an avid high altitude mountain climber having summitted Mount Kilimanjaro, reached Everest Base Camp, Annapurna Base Camp and the High Camp of Naya Kanga Peak in the Himalayas.

For Kana, who worked with Mervyn King for many years, his appointment as Chairman of the King Committee is a great honour. He believes it is both a privilege and a responsibility to follow in King’s footsteps given that the King Reports have always been forward thinking and contextual to the business world and the expectations of society.

Kana is firmly of the opinion that that corporate governance must be dynamic and able to respond to change as business and public interest evolves. “The evolution of the King Reports and Codes, as well as the thought leadership and principles over the years is remarkable,” he says.

The reports have transformed from the original shareholder supremacy model to a stakeholder model; from there to integrated thinking and reporting (emphasising sustainability and caring for the environment); preparing for the Fourth Industrial Revolution and the role of technology, innovation and the need for greater transparency on executive remuneration.

King IV, which was launched just two years ago, is still in its infancy and time is required for implementation and consideration, as well as for organisations and stakeholders to embrace the principles that the report contains, he maintains. The King Committee, he adds, will continue to play an advocacy role here, as well as to

develop more guidance to support deeper implementation.

At the pinnacle of good governance lies accountability and transparency to stakeholders, Kana insists. Moreover, good corporate governance promotes ethical leadership, effective management of risk and opportunity and better decision making, not to mention the sustainability and success of any organisation. In fact, it is the foundation of reputation management in any organisation.

Kana believes the prevalence of corporate scandals rife in the country at the moment are the result of weak,

unethical and unacceptable governance practices. “Living good governance is about setting the right tone at the top,” he comments.

“Mervyn King brought the subject of governance to life in South Africa and globally,” he says, adding that he is looking forward to his new role as Chairman. Together with the collective wisdom of the members of the King Committee, he is confident that the Committee will continue to lead and shape the corporate governance debate and development, both locally and abroad.

King Committee leadership change

Professor Mervyn King, on 1 October 2018, handed over the role of Chairman of the King Committee to Professor Suresh Kana.

Prof King has been the Chairman of the King Committee since its inception in 1992. He remains a member of the Committee in his new role as Chairman Emeritus. The move is in line with Professor King’s role at the International Integrated Reporting Council (IIRC) also changing from Chairman to Chairman Emeritus on 1 October 2018. Professor King will continue his advisory and advocacy roles to both these committees.

Roy Andersen, Chairman of Sasfin Limited and a member of the King Committee since its inception said: “It has been a privilege to have worked with Mervyn King from the first meeting of the committee that produced King I. Since then I have been in awe of how he has changed the corporate governance landscape not only in South Africa, but also internationally. His intellect and insight are exceptional, and he has made an extraordinary contribution. I have also worked with Suresh Kana and have no doubt that he is a worthy successor.”

Professor Kana is currently the Chairman of Imperial Holdings Group, the Chairman of Murray and Roberts, and lead independent director of JSE Limited. He also chairs the Audit Committee of the United Nations World Food Programme based in Rome. Professor Kana joined the King Committee in 2000 and has been involved in the development of the King II, King III and King IV Reports.

“I am truly honoured to chair the King Committee and – together with my colleagues on the Committee – I’ll continue to build on the internationally acclaimed work performed under the leadership of Mervyn King over the past 24 years,” said Prof Kana.

Parmi Natesan, Executive: Centre for Corporate Governance at the Institute of Directors of South Africa, said that the IoDSA was delighted that Prof King would remain as a member of the committee in his capacity as Chairman Emeritus and continue to play an advisory and advocacy role. She pointed out that under King’s leadership the King Report was regarded around the world as the premier corporate governance model. The Report is often used as a template for the drafting of corporate governance codes in other countries around the world.

Ms Natesan also welcomed the leadership of Suresh Kana, with whom the IoDSA have a long-standing relationship in various capacities, including his participation in the IoDSA’s Chartered Director SA Governing Body. “Suresh has the leadership capabilities, gravitas and experience to lead this important Committee into the future” said Natesan.

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Fostering accountability in the business landscape is crucial, particularly in light of the spate of corporate scandals to have hit South Africa in recent times. Although professional bodies play an important role in upholding the relevant codes, professional standards, rules and regulations, it is the also the responsibility of professionals to return to basic values of their profession and hold themselves and their colleagues accountable.

Accountability – whose role is it anyway?Samantha du Chenne

Accountability

W illie Botha, Senior Executive for Assurance and Practice at the South African Institute of Chartered Accountants

(SAICA) explains that generally, a particular profession is the custodian of certain defined professional activities which are underpinned by a framework of knowledge, skills and attitudes. Professionals provide their services to customers (i.e. the public or their employing organisations) and the value thereof is premised on quality, integrity and trust, both in the services of the professional and the outcomes they produce. In this context accountability is about answering to these outcomes, where both individual members of the profession and the profession as a collective are accountable to the users of their services, as well as to society and the broader economy.

He adds that provided the relevant codes, standards, rules and regulations, as well as ethics are correctly and diligently applied, the intended outcomes will be credible, acceptable and in the public interest. “The problems start when inappropriate interests and agendas interfere with doing the right thing – even when no one is looking – and this is when credibility and trust are compromised,” says Botha.

Parmi Natesan, Executive Director at the Institute of Directors Southern Africa (IoDSA) uses the King IV definition of accountability – “the obligation to answer for the execution of responsibilities” – to explain the concept. “This refers not only to the quality of work, but also to the terms of the moral compass with which the work was carried out,” she informs.

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"Instead of only tightening regulations, we should tighten the principles around the corporate cultures and behaviours we tolerate, incentivise or turn a blind eye to. It’s just as vital to create corporate environments that foster and reward good ethical behaviour."

Accountability is key in any business landscape, she adds, because stakeholders entrust professional organisations with their resources and in return need to know that the organisation is being looked after and that someone is answerable for the decisions made.

She explains that the role of professional bodies within the realm of accountability is to hold their members to account in terms of their own codes of conduct and disciplinary procedures. Because members of professional bodies are rendering services to the public, the professional body has a public interest duty to ensure their members act appropriately. To this end, if members are found to be in breach of their particular code of conduct, they should be sanctioned, which could even (in certain cases) mean that their membership is revoked.

King IV, together with previous King Reports, should result in good corporate governance, if they have been understood and correctly applied. In such cases, King IV promotes greater accountability, transparency and enforces corporate governance. That said, Botha points out that in order for this to take place, ethical leadership, as well as a culture that fosters ethical mindsets and behaviours are of paramount importance. “Essentially, we can say that effective corporate governance is anchored in ethical leadership and governance which results in a strong ethical culture,” he believes.

Moreover, Botha says that both current and previous King Reports are explicit about ethical governance, leadership and culture. The ethical culture of an organisation should be driven by the ‘tone from the top’ he says, in that the board is responsible for ensuring that an ethical tone permeates the organisations they govern.

As such, codes, professional standards, laws and regulations play a vital role in the overall ecosystem. In addition, they cannot

remain static, but must continue to evolve to ensure they remain relevant and fit for purpose. Botha maintains that more rules and regulations are not always the best or only solution. “Instead of only tightening regulations, we should tighten the principles around the corporate cultures and behaviours we tolerate, incentivise or turn a blind eye to. It’s just as vital to create corporate environments that foster and reward good ethical behaviour.”

Botha adds that as a professional organisation, SAICA’s mission and purpose is to promote the interests of its members and associates and to support the development of South Africa’s economy and society by promoting and enhancing the value of the accountancy profession. SAICA’s long term interests are always in line with public interest and responsible leadership, he explains.

The IoDSA is currently in the process of updating its member code of conduct and disciplinary procedures, which will better enable the organisation to hold its members to account. Natesan believes there are a number of ways in which accountability can be fostered amongst professionals and these include ongoing training and awareness around their roles and responsibilities; for strong leadership to set the right tone at the top and the implementation of consequences for breaches. Ultimately, professionals who do not hold themselves accountable for their actions stand to face reputational damage and loss of stakeholder trust, she says.

That said, corporate collapse and lack of accountability cannot be attributed to only one root cause. “Many people automatically look to blame their auditors for irregularities, for example,” Natesan illustrates. Instead, there should be an ecosystem of responsibility where many players in a situation need to take responsibility for their roles. These include management, internal and external audit, risk function, compliance, board members,

the professional bodies to which these professionals belong, regulators such as the JSE and the National Treasury, as well as law enforcers and shareholders.

It’s a complex process, adds Natesan and one that can only be implemented by first ensuring that the right tone is set by leadership. It’s also important to have the right policies in place and ensuring they are followed and setting consequences for non-adherence. Detailed performance assessments are necessary and organisations should apply a level of professional scepticism – not simply believing what is put in front of them, but taking the time to question and interrogate.

Botha points out that there is currently an ecosystem of business responsibility outlined in King IV around corporate governance outcomes, principles and practices. “The ecosystem of business responsibility also extends to all stakeholders in the financial reporting chain and these include (but are not limited to) preparers of financial information, governing bodies or boards of directors, audit committees, internal and external auditors, as well as other assurance providers, shareholders, investors and others that make use of reported information; together with regulators, standard setters, professional bodies and industry representative bodies. He adds that in some instances, this is proving to be inadequate, with a lack of ethical leadership in both the private and the public sectors.

Ultimately, ethical leadership is required by everyone who wants to build a more prosperous society and economy in South Africa. “We cannot allow a limited group of individuals to get away with unethical behaviour at the expense of the majority of South Africa – to flourish. The so-called ‘power of one’ requires a change in ethical ethos and most importantly, a culture of responsible leadership,” concludes Botha.

8Conduct

There is certainly a heightened focus on professional conduct in more recent weeks, arguably as a result of a number of corporate scandals and the responsible corporate scoundrels, being exposed in a very public manner. It is against this setting that the role professional bodies and member associations (collectively, “associations”), in regulating and promoting professional standards of conduct, warrants some further consideration.

The role of associations in the regulation and promotion of professional conduct standards Adv. Jacqui Grove, Grove Governance Consultants

A natural point of departure in this discussion would be to first consider the nature of these associations, since this

directly affects their purpose and powers. Secondly, it is important to understand their functions as disciplinary tribunals when enforcement becomes necessary.

At a very basic level, some associations function as statutory regulators established through legislation, and in most cases, affiliation is required as a condition of conducting a certain profession – these associations grant a type of “license to operate” in a specific field, and as a consequence of affiliation, they have the power to discipline misconduct.

However, the advent of professional bodies as voluntary associations has consistently grown over the years. While membership is not a condition of practice in a specific field, these associations strive to advance the profession, advocate for their industry, and elevate the professionalism of their members as a competitive advantage. They now exist in almost every sphere of industry, from financial services to automobiles, and their role is most eloquently described as “to create an enabling environment for professional development in a discipline, and growing the maturity of that discipline by contributing to its body of knowledge, its relevance, governing principles and accessibility to new and

existing practitioners serves as the impartial, autonomous representative of its various stakeholders in matters related to the discipline”.

The fundamental difference between the so-called statutory or regulatory associations and a voluntary association lies in the fact that the former is empowered by legislation, while the latter relies on the principles of contract between association and its members. These voluntary associations generally set standards in two areas, namely qualification and conduct, with conduct regulation being the topic of interest here.

Self-regulated professionalism, underpinned by peer review of member conduct, is a hallmark of practicing a profession. While is it understood that membership is voluntary, by accepting the terms of membership members undertake to conduct themselves in a manner which supports the aim and objectives of their association and they agree that their conduct will be subject to peer review. The expected standards of conduct are, in most cases, set out in the form of a code of conduct or set of practice standards and breaches are adjudicated in accordance with agreed disciplinary rules set by the governing structure of the association.

The reach of voluntary associations concerning member discipline has featured in a handful of court cases reaching even the echelons of the

Appellant Division over the years, and a number of important principles have emanated from these cases. In this regard, the right of the association to act against a member and procedural considerations feature prominently is most of the decided (and reported) cases. Perhaps the most famous of these cases is the quartet of Jockey Club of South Africa.

Notably, the courts agree that a “domestic tribunal” (the disciplinary function of an association) is not required to follow the strict procedure and to apply the technical rules of evidence observed in a court of law. However, applying the principle of natural justice is always required. In this regard, the courts have held that associations, in exercising their disciplinary powers, are obliged to act in accordance with their rules and constitution, discharge their duties honestly and impartially, and afford members a proper opportunity to defend the charges - including the opportunity to adduce evidence and challenge adverse allegations. In adjudicating matters, the association must listen fairly to both sides and observe the principles of fair play and conclude the matter by making a bona fide finding on the facts.

Apart from the procedural elements, consideration also needs to be given to the result of a disciplinary matter in the event of an adverse finding. This is found in the form of a list of available sanctions. Traditionally, the purpose of

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the imposition of a sanction would have been to straight-forward punish the member for the misconduct committed, however, more broadminded sanctions have been developed over the years. While these still aim to reprove members, they also incorporate measures of counselling and redress. Examples include orders to rewrite competency examinations, attend ethics training or undertake personal development courses. Sanctions are then also applied concurrently in appropriate instances.

The scope of sanctions varies according to the association and the nature of the profession, but termination or suspension of membership, reprimands

and admonishment, and fines are commonplace.

Another feature, being the publication of outcomes of disciplinary matters, has also been adopted by a number of associations. In this regard, the publication tends to serve a dual purpose; firstly, to protect and advance the reputation and objectives of the association in as far as standards are concerned, and secondly, as a possible deterrent.

For members being deemed excommunicado (to quote the urban dictionary), is certainly the most serious sanction. A ban on membership, followed by the publication thereof, may have

serious professional consequences, and should not be considered lightly. Nevertheless, some transgressions of professional conduct standards are so intolerable, that removal of the member from the ranks is the only appropriate outcome in preservation of the integrity of the association, and the profession as a whole.

The application and adjudication of professional standards by associations remains a fluid and dynamic process, and there will certainly be further developments and considerations as associations and their related professions advance and mature.

"The so-called statutory or regulatory associations and a voluntary association lies in the fact that the former isempowered by legislation, while the latter relies on the principles of contract between association and its members."

10Reputation management

IoDSA’s 4th year of reputational excellenceIoDSA

This is the fourth consecutive year that the IoDSA has engaged with Reputation Matters to conduct their annual reputation survey, taking stock of stakeholders’ views and feedback.

T he Repudometer®, Reputation Matters’ reputation measurement tool, was used to obtain the results. Five core dimensions were measured, namely Corporate

Management; Corporate Capital; Corporate Positioning; Corporate Performance and Corporate Dialogue.

The stakeholder groups, who formed part of this year’s study, were employees, members, non-members and past members. We received a wonderful response rate from employees and members and we can regard their feedback as being statistically representative. On the contrary, the non-members and past members’ surveys yielded low response rates, however, it still showcases trends which can guide the strategy going forward.

The IoDSA’s reputation score for 2018 is 84% which is considered excellent. All the Repudometer elements scored well, with only one dipping under the 80% bracket. The lowest scoring element was External Dialogue (72%) which measures external communication to all stakeholders, including members. This

is the same result from 2016; it does, however, represent a 5% decrease from 2017 where it scored 77%.

Reputation Matters also compared the results to previous Repudometer studies conducted amongst membership-based organisations, and we are proud that we have scored 5% more than the average of all previous studies for membership organisations.

This year’s overall reputation score for the IoDSA dropped by 1% to 84%. This can still be regarded as very healthy, however also a reminder to consistently work towards an improved reputation result.

The main dimensions impacting the IoDSA’s reputation positively are: Corporate Management, namely Strategic Intent and Operational Governance; and Corporate Performance, namely Business Results and Value Offering.

Corporate Management (87%)This dimension focusses on how the IoDSA is run and managed. It comprises two elements namely Strategic Intent and Corporate Governance. Both Strategic Intent (88%) and Corporate Governance (86%) scored well, maintaining the same results as in 2017. The IoDSA’s reputation is positively impacted by these elements. The Strategic Intent element measured whether the IoDSA is aligned to its core function of building better directors, better boards and better business. Corporate Governance measured leadership, management and policies within the organisation.

Corporate Performance (86%)Business Results and Value Offering are the two elements that constitute Corporate Performance. The Business Results element scored 90% again, reflecting a consistently excellent result across all four years. Stakeholders perceive that the IoDSA is open, honest and transparent in reporting on its results. The Value Offering element increased slightly in 2018, indicating that stakeholders have an improved perception of the value of the IoDSA.

Corporate Capital (85%)When looking at the IoDSA’s people and the tools they use, we consider two elements within the Corporate Capital dimension;

ALL

2015 2016 2017 2018

Strategic Intent 91% 89% 88% 88%

Operational Governance 84% 87% 86% 86%

Human Capital 84% 86% 88% 86%

Operational Capability 87% 84% 85% 84%

Strategic Alliances 77% 83% 81% 82%

CSI 74% 80% 80% 81%

Business Results 90% 93% 90% 90%

Value Offering 75% 86% 81% 82%

Internal Dialogue 82% 88% 91% 88%

External Dialogue 83% 72% 77% 72%

TOTAL 83% 85% 85% 84%

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“Updates on acts and regulations, and the Directorship magazine were voted as the two most popular member benefits."

namely Human Capital (86%) and Operational Capability (84%). Both elements scored well, however, the results reflect marginal declines from the previous year. IoDSA employees are perceived to be well-informed about the industry and work they do, and they understand their roles. From an operational viewpoint, the results reflect that IoDSA has the capability to achieve its core focus and to adapt to changes in the business environment.

Corporate Positioning (81.5%)Partnerships and social community projects are investigated in the Corporate Positioning dimension under two elements; Strategic Alliances and Corporate Social Investment (CSI). The Strategic Alliances score (82%) and the CSI score (81%) both increased by 1% from 2017 indicating an improvement amongst the perceptions of stakeholders. These results show that stakeholders are satisfied and approve of the CSI projects that the IoDSA is involved with and that sustainable and beneficial partnerships are in place that help the organisation to achieve its strategic goals. Corporate Dialogue (80%)When investigating the Corporate Dialogue dimension, both Internal Dialogue and External Dialogue elements were considered. The External Dialogue element scored the lowest at 72% indicating that more should be done to communicate externally with members and the public about the IoDSA, its membership benefits, mandate and position on pertinent issues. It should be noted that the 2018 score represents a 5% drop from the 2017 result of 77%. On the other hand, Internal Dialogue scored a very healthy result of 88%, indicating that employee morale, team cohesion, and effective internal communication platforms are in place and work well.

In addition to the reputation elements, we also surveyed specific member-related topics. Updates on acts and regulations, and the Directorship magazine were voted as the two most popular member benefits. Governance and strategy-related topics were found to be the most interesting to members and all the stakeholder groups used ‘Professional’ and ‘Governance’ to describe the IoDSA.

Compared to the average score of previous Repudometer® studies conducted (77%), the IoDSA has again achieved well above average. This consistently good performance over the last four years should be celebrated. Some results have remained steady and a few have dipped, this serves as a helpful reminder to the IoDSA to remain focussed on further improving their overall reputation score of 84% for 2018. The IoDSA leadership team will take the research recommendations forward to continue working towards our vision of building better directors, better boards, and better business. Watch this space!

Corporate Positioning (81,5%)

Strategic Alliances

100%90%80%70%60%50%40%30%20%10%0%

CSI

20%0% 40% 60% 80%

Corporate Management (87%)

Strategic Intent

100%90%80%70%60%50%40%30%20%10%0%

Corp

orat

e Gov

erna

nce

20%0% 40% 60% 80% 100%

Corporate Capital (85%)

Human Capital

100%90%80%70%60%50%40%30%20%10%0%

Oper

atio

nal C

apab

ilty

20%0% 40% 60% 80% 100%

Corporate Performance (86%)

Business Results

100%90%80%70%60%50%40%30%20%10%0%

Valu

e Offe

ring

20%0% 40% 60% 80% 100%

Corporate Dialogue (80%)

External Dialogue

100%90%80%70%60%50%40%30%20%10%0%

Inte

rnal

Dia

logu

e

20%0% 40% 60% 80% 100%

100%

12Reputation management

R eputation has two elements to it: perception and reality. The former is essentially the image the organisation projects and how it

is perceived by the general public as well as stakeholders such as shareholders, investors, employees, suppliers and customers. Reality, on the other hand, is the truth about the organisation’s policies,

practices, procedures, systems and performance. In its heyday Steinhoff, as one example, was associated with a certain positive perception. The reality, however, was far less positive. Successful businesses understand that aligning perception and reality is critical to building, sustaining and protecting an organisation’s reputation.

The practice of reputation management

involves managing and shaping positive perceptions of an organisation and ensuring that the general consensus is in line with the company’s positioning. A positive corporate reputation is not achieved overnight or even in the short term, but is a long term strategy of careful management and evolution.

Managing a business’s reputation

Reputation requires a seat in the boardroomJanine Hills, founder and CEO of Vuma Reputation Management

13

Business reputation has become such a critical issue that it can no longer be viewed as solely the responsibility of public relations or corporate communications. As numerous CEOs around the world have discovered to their cost, corporate reputation has a direct impact on both the bottom line and share price.

incorrectly can have dire consequences both for business leaders and their organisations. In the age of social media, even a hint of corporate malfeasance can cause an organisation’s share price to plummet. Goldman Sachs’ share price devalued by $US12.4 billion in just one afternoon when it was accused of fraud in 2010 while closer to home, KPGM South Africa, Steinhoff and Enterprise Foods, part of the Tiger Brands stable of companies, have seen their business reputations in tatters after damaging allegations have been made against them.

It can also have dire consequences for individuals: Uber founder, Travis Kalanick was forced to resign as CEO when his personal brand took a number of reputational hits while it’s doubtful that there will be many organisations willing to employ Steinhoff’s disgraced former CEO, Marcus Jooste any time soon.

Reputation and trust in an organisation is indelibly linked to the ability to be a sustainable business. Successful companies understand that protecting and safeguarding corporate reputation can no longer be the sole mandate of any one division but needs to be a board level priority. Ideally at least one board member should be a corporate reputation expert with the appropriate credentials and experience to consult and advise on this increasingly important area.

Don’t make the mistake of correlating public relations or media experience to reputation management experience. The latter has become a science on its own and to entrust the management of corporate reputation to somebody without the requisite expertise is a risky exercise.

As a whole, board members need to understand the extent to which every single decision they take impacts the organisation’s reputation. In an ideal world there should be at least one reputational management expert on the audit and risk committee and the remuneration

committee, given that all too often these are areas where fraud can occur.

In the same vein, at least one member of the senior management team – preferably the CEO – needs to have experience in reputation management. Uber’s Kalanick is a good example of a CEO who clearly had little expertise around reputation management given that under his helm the company frequently faced reputational crises.

Both board members and senior executives need to understand how their behaviour and actions reflect on the organisation they represent. Company policies need to be in place regarding what board members and executives say in media interviews. At the same time they need to be cognisant of what they post on social media and be aware of posts that could potentially be misconstrued, in the

process bringing the organisation into disrepute. There need to be clear guidelines in place in terms of how board members and executives are expected to behave at social functions where they represent the company.

It is the responsibility of the corporate reputation expert to ensure that the company has a crisis management strategy in place and a protocol to deal with major issues and repercussions. Areas that need to be considered in advance include who will take responsibility for crafting a holding statement, the tone of that statement, who the company spokesperson will be and ascertaining whether that spokesperson has had sufficient media training.

There are a number of areas to consider when evaluating a business’s reputation management. At Vuma Reputation Management we evaluate ethical business practice; transparency; social responsibility; behavioural intention; trust; management quality; marketing and sales effectiveness; innovativeness; the quality of the company’s products and services; its attractiveness as an employer; and business performance. In our opinion, each of these areas has equal importance and should receive equal attention.

The value of having a reputation management specialist on the board is because they tend to consider issues from a slightly different angle to other board members: first and foremost they are able to flag decisions that are not aligned to the company values and ethics before they pose a reputational risk. They are also able to balance the needs of the organisation with those of employees implicated in wrong-doing and avoid falling into the common trap of knee-jerk reactions.

When a crisis does occur, the extent to which the organisation’s brand is damaged has a direct correlation to how the crisis is handled. Failing to give reputation management a seat at the boardroom table puts the entire business at risk.

"A positive corporate reputation is notachieved overnight or even in the shortterm, but is a long term strategy of carefulmanagement and evolution."

14Reputation management

How are Reputation Risks different from other risks and how should they therefore be managed? Dr Dominik Heil, Wits Business School and Hewers Reputation Analytics, reputation and brand risk expert, IRMSA

R eputation risks are in many ways similar to other risks, but different in two fundamental ways:

• Reputation risks cannot be transferred and remain the full responsibility of the board and top management

• Depending on the response to a reputation crisis, the reputation can either be further damaged or indeed even be enhanced

While there are certain insurance companies that offer products to reputation risk, these typically do not cover the full effect of a reputation crisis on the organisation. The reason for this is that the effects of reputation crises are highly complex and the full financial impact is impossible to predict with any reasonable degree of accuracy. Because of their potential magnitude, their complexity and the difficulty to transfer them to outside

institutions, reputation risks are also considered to be ‘mega risks’ or the ‘risk of all-risks’.

Sophisticated research and analysis methodologies now allow us to pinpoint the areas of high reputation risk in a way that allows for timeous management of risk response strategies and the development of crisis response plans. High priority reputation risks exist in areas of the stakeholders that have a strong effect on the relationship of mission critical stakeholders with the organisation and where there are exaggerated expectations by external stakeholders that the organisation is unlikely to live up to.

Only credible ways to identify high priority reputation risks will allow organisations to be adequately prepared and therefore be able to respond to a reputation crisis in a

sophisticated way that demonstrates the values of the organisation. These are the questions Boards should ask (and expect treatment plans from their risk managers):1. About which aspect of our organisations

do external stakeholders hold expectations that are likely to be disappointed in the foreseeable future?

2. What aspects of the organisation are critical for the way external stakeholders relate to the organisation and consequently in the way they support it?

3. Do we have appropriate risk response strategies for ensuring that stakeholder expectations are met in areas of high priority reputation risk?

4. Are we prepared to respond to a crisis in an area of high priority reputation risk in a way that vividly demonstrates our company values in action?

15FAQs

Governance Research PlatformJulie Dixon, Governance Liaison Manager, IoDSA

What is the governance research platform?It is a mechanism designed to assist Master’s and Doctoral level students to either engage with the IoDSA membership to participate in and provide input for governance research projects or source governance related research topics for their theses.

What is the aim of the governance research platform?To promote research in the field of governance.

How does the governance research platform assist students? In one of two ways: 1) For students who need to engage with

the IoDSA membership for the purposes of acquiring research input

The governance research platform enables students with established research projects to showcase their projects and request participation from IoDSA members. 2) Students requiring assistance with a

research topic

The platform provides a list of potential governance related research topics, compiled and maintained by the IoDSA, for prospective students to consider when selecting their thesis topics.

What are the criteria for showcasing a project on the governance research platform? For a project to be showcased on the platform, the following criteria needs to be met: • The research topic must be a clearly

defined governance related topic;

• The student must be registered at an accredited tertiary institution; and

• The research must be at a Master’s or Doctoral level.

What is the process to follow to access the research platform for the purposes of showcasing a project and acquiring input? 1) The student must complete an

application form online detailing the outline of the project and their required means of member participation e.g. survey, interview or participation in a focus group: https://www.iodsa.co.za/page/ApplicationForm

2) The application will be reviewed and if accepted, the project details will be posted online within a 2-week period. The IoDSA retains the right to decline a submission if it does not align with the criteria stipulated above.

3) Once an application is accepted, the student is required to sign an acceptance form committing to the obligations stipulated below.

What are the obligations for students utilising the platform?Students who showcase their project on the platform will be required to issue high level findings in an executive summary to IoDSA members and/or an article in Directorship magazine within 6 months of submission of their final thesis.

How is the IoDSA membership alerted to requests to participate in the research projects? The IoDSA membership database will be notified of new project submissions and requests for participation via the IoDSA eMag newsletter.

What projects are currently showcased on the platform? Current projects requiring member input can be viewed here: https://www.iodsa.co.za/page/ResearchProjects

What are the current potential topics suggested for students? Proposed governance related research topics can be viewed here: https://www.iodsa.co.za/page/ListofTopics

Why should IoDSA members participate in the students’ research?IoDSA members have a wealth of governance knowledge that they can impart through this initiative, to the benefit of the industry and future leaders. On a more practical level, participants can earn CPD points by participating in the research projects.

How do IoDSA members participate in the students’ research?Current research projects are showcased on the governance research platform.

IoDSA members can view the details of each project and assess the format and level of participation required, before opting in to participate.

Julie Dixon Governance Liaison Manager julied@iodsa.co.za

“The platform provides a list of potential governance related research topics, compiled and maintained by the IoDSA, for prospective students to consider when selecting their thesis topics.”

16From the training room

Governance form vs functionParmi Natesan, Executive: Centre for Corporate Governance, IoDSA and Professor Deon Rossouw, CEO, The Ethics Institute

Governance structures need humans to deliver the desired results.

17

“Organisations only exist in order to deliver on their purpose and, similarly, governance only exists in order to help them do that.”

O ne of the most persistent challenges relating to governance is the tendency to focus on form rather

than substance. In line with King IV, it’s time finally to accept that governance is not an end in itself, but a tool for delivering outcomes. Organisations only exist in order to deliver on their purpose and, similarly, governance only exists in order to help them do that. Governance got a bad name because people persist in seeing it in terms of compliance, structures and policies. Of course, these things are important only as tools to help deliver outcomes.

This focus on outcomes is very much a feature of King IV, which was designed to link governance practices with four governance outcomes. The critical point is that structures need humans to give them life, to use them to deliver the desired results. Governing bodies must therefore ensure that the governance structures are indeed achieving the desired governance outcomes.

King IV identified four governance outcomes: an ethical culture, good performance, effective control and legitimacy. Boards can therefore measure whether the structures they have put in place, and the way they are being used, are effective by measuring the extent to which these outcomes are being attained.

Clearly, then, the personal qualities and actions of the members of the governing body are critical in ensuring that the governance objectives are achieved, that substance follows form. King IV retained the four cardinal values that should underpin good governance—responsibility, accountability, fairness and transparency (RAFT)—but added two further ones: integrity and competence. This recognises that governance structures will only be valuable if they are used by people who are prepared to put their own interests aside and act ethically in the best interests of the organisation, beyond mere legal

compliance, and who have the requisite knowledge both of the organisation and the industry in which it operates.

It is important to recognise that governing body members have to cultivate these characteristics in order to make them instinctual. People aren’t born with integrity, competence or any of the others, they have to be nurtured.

As with any enterprise involving human behaviour, moving from form to substance is no easy task. Some guidelines for assisting are:

Select members of the governing body carefully. It all begins with selection, says Professor Rossouw, so nomination committees must actively seek people with these cardinal virtues.

Orient new members properly. Once selected, it is vital that new members of the governing body are properly educated about what their new role entails, and continually reminded that they are there primarily to serve the best interests of the organisation, not those of any particular stakeholder.

Structure meetings carefully to ensure that members have the right types of conversation, and do not confine themselves to ticking the boxes. Courage becomes important here—not just moral courage but also the courage to take the right risks.

Hold members of the governing body accountable. There are several elements to this. First, peer pressure must be harnessed to create a positive atmosphere in which members continually assess their own performance and that of their fellow members. Courage will also be at a premium here, but it is equally important the board is truly diverse. This is needed to overcome the “buddy mentality” in addition to measures like gender, race and age. At the same time, though, it must be recognised that self-appraisal is no substitute for the stakeholder’s assessment of the extent to which the four governance outcomes have been achieved.

There is not necessarily more unethical behaviour now, just that it is more visible—which is positive. Going forward, how governing bodies disclose about governance and its results will become more and more important. The disclosure must convince stakeholders not just that the right governance structures are in place, but that they are delivering results.

Looking forward as we move away from compliance to reporting on integrated performance, the triumph of substance over form will be shown when it is clear that the organisation has not only achieved its purpose in the past, but is well-positioned to continue achieving it into the future.

18Business

D igital technologies are having a profound impact on the way consumers and organisations

operate; they are disrupting traditional ways of doing business, creating new and different industry competitors and changing society. These changes are both a challenge and an opportunity.

Taking advantage of these opportunities requires businesses to undergo a digital transformation during which they relook their business and organisational activities, processes, competencies and models using technology to compete more effectively. The aim of a digital transformation is to expand or improve on traditional business practices by becoming more customer-centric in order to achieve a sustainable competitive advantage.

What makes a digital transformation unique is that the scope, pace and impact of change is transformative and exponential rather than linear.

The need for digital transformation may preoccupy business leaders but according to a Forrester survey of 1 559 business and technology decision makers – while acknowledging that technological changes will have the greatest effect on business decisions in the next year – many companies are battling to transform.

Essentially, a digital transformation is essential if an existing business is at risk of being disrupted or for companies wishing to deliver an improved customer experience, grow revenue and profitability and achieve a sustainable competitive advantage.

Globally, most companies and their leaders accept that they if they don’t embrace digital technology they risk being overtaken by their competition. And if it’s not fear of being overtaken by competitors or new disruptor entrants to the sector, customers will force companies to transform digitally – and to keep transforming as their needs change.

More than a fifth of respondents believe their companies have already completed their digital transformation without realising that no company will ever have totally completed this process, says Forrester’s Ted Schadler in a report titled, The Sorry State of Digital Transformation in 2018. Instead, he argues, it’s an ongoing evolution with the result that companies will always be transforming digitally and that software, the cloud and emerging technology will increasingly become business assets rather than simply digital enablers of the digital business.

How will digital transformation impact business in the future and how can boards prepare for this eventuality?

Digital disruption –what is the business impact and how can boards prepare? Lynette Dicey

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The board too has an essential role to play in the digital transformation of a company. Given that it’s a significant financial investment, it’s imperative that any digital overhaul is sanctioned by the board. It’s becoming increasingly important for boards to have a digital mindset: at least one board member who understands the opportunities presented by digital technologies. Strategic technology, digital expertise and cyber risk experience is a decided business advantage in the current environment.

Critically, board members need to understand the value of digital technology for the business and the need for digital transformation. They need to appreciate what digital transformation entails, what is required to ensure a successful execution, which digital technologies to utilise and how the digital strategy will align to the company’s business strategy.

Increasingly, digital transformation is about more than merely catching up with innovative businesses but requires a total shift in operational, structural and cultural aspects of the business.

To be successful, a digital transformation needs to be motivated by an informed board, and then driven by a strong and capable cross-functional executive leadership team. Schadler’s Forrester report reveals that of the companies surveyed, 37% of businesses put the chief information officer in charge of digital transformation followed by the CEO at 24% and the chief digital officer and chief data officer at 18% and 15% respectively. While a chief digital officer can be the best outside thinker with the ability to see what needs to be done, Schadler maintains that an enlightened CIO that has the technical awareness and the enterprise visibility to unify the changes companies need to make is the best option to lead the process.

Perhaps one of the most important discussions boards need to have is around talent resources and whether the company

has the right expertise in place to lead and drive a digital transformation – and then how to upskill employees to make the most of the company’s new digital technologies. According to PwC’s 2017 Global Digital IQ Survey, 63% of company executives said that a lack of properly skilled teams was an existing or emerging barrier to digital transformation. As such, all employees need to have a degree of technology skills, which may require further training to upskill staff.

A digital transformation, however, can never be a panacea to all the challenges facing a business. While there can be little doubt that digital will change the business, done incorrectly it can also harm the business. It’s therefore imperative that a digital strategy is part of the company’s wider business strategy and that these discussions take place at both board and executive level where the opportunities and risks are clearly investigated.

As such, it is the responsibility of board members to ensure that they understand what a digital transformation means and that they keep up to date with technology trends. One way of doing this is to use emerging technologies such as wearable fitness devices, virtual real estate tours and even augmented reality experiences in order to better understand the consumer experience of these technologies.

Other ways of staying abreast of the rapid changes taking place technologically is to read newsletters, participate in online courses, attend conferences focused on digital technologies and visit digital labs to better understand how digital technologies are being used.

Board members should also insist on regular feedback sessions with the lead driver of digital transformation within the company in order to remain abreast of the investments the company is making. Given the rapid pace of technological developments, board members need to be constantly updating their knowledge

“To be successful, a digital transformation needs to be motivated by an informed board, and then driven by a strong and capable cross-functional executive leadership team."

Key take-outs• Digital transformation involves

expanding or improving traditional business practices by becoming more customer-centric to achieve a sustainable competitive advantage.

• Customers will force companies to transform digitally – and to keep transforming as their needs change.

• Digital transformation is an ongoing evolution; companies will always be transforming digitally.

• It is vital for boards to have a digital mindset: at least one board member who understands the opportunities presented by digital technologies.

• Digital transformation is more than merely catching up with innovative businesses but requires a total shift in operational, structural and cultural aspects of the business.

• Transformation must be motivated by an informed board and driven by a strong and capable cross-functional executive leadership team.

• Digital transformation is not a panacea to all business challenges; if done incorrectly it can also harm the business.

• Board members must ensure that they understand digital transformation and that they keep up to date with technology trends.

20Finance

The Medium-Term Budget Policy Statement (MTBPS) presented by South Africa’s new Minister of Finance, Tito Mboweni on 24 October, was given against the realisation of the staggering impact State Capture had on the South African economy, strained fiscal numbers and ongoing concerns regarding the risks of further credit rating downgrades. Was Mr Mboweni able to address the glaring revenue shortfalls, ever-increasing debt to GDP and strain of state-owned enterprises (SOE’s) on the fiscus?

Is there any good news in the 2018 Medium-term Budget Policy Statement?Kemp Munnik, Head of Structured Solutions, Bravura

T he MTBPS was keenly watched by local and international investors as it is essential to restore the credibility of

the medium-term expenditure framework. This framework is significant because it provides insight into planned government expenditure and indicates expected tax increases that South African taxpayers may have to face. It also informs decisions of the credit rating agencies about South Africa’s fiscal stability.

Revision of growth forecastSouth Africa’s economy is shrinking, with unemployment at a 14-year high of 27.7% (or 37.2% if the definition of unemployed is expanded to include those too discouraged to look for work). The South African Reserve Bank announced earlier this year that SA is in a technical recession following two consecutive quarters of negative growth.

In the MTBPS, the National Treasury forecasts that GDP growth will slow to 0.7% in 2018, down from 1.3% in 2017, before rising to 1.7% in 2019 and 2.1% in 2020. The global economy is expected to continue growing at 3.7% in 2018 and 2019, although global risks are becoming more pronounced.

Revenue shortfall and significant increase in budget deficit The MTBPS states that in 2017/18, for the first time since the 2008 global financial crisis, tax revenue growth did not exceed GDP growth. Revenue shortfalls have widened over the past four years, with under-collections rising from R7.4 billion in 2014/15 to R49 billion in 2017/18.

The MTBPS announced that there will be a revenue shortfall of R27.4 billion, relative to the 2018 Budget estimate. This is due to weaker economic growth, alongside a once-off payment of overdue VAT refunds. These revenue shortfalls lead to budget

deficits. The MTBPS states that the 2018/19 consolidated budget deficit is estimated to widen to 4.3% of GDP. This is by far the highest level ever seen since 2008.

A glimmer of hope – no increases in taxesThe MTBPS states that increases in the major tax instruments would be avoided unless the economic environment requires it. At this stage, revenue projections assume no changes to tax rates, but provide for annual adjustments to personal income tax brackets, levies and excise duties in line with inflation.

In a significant step, the 2018 Budget released in February recognised that a corporate tax rate of 28% is affecting South Africa’s global competitiveness. The world is experiencing falling corporate income tax rates in advanced and middle-income countries. The global trend to reduce corporate income tax rates includes countries that maintain strong investment and trading ties with South Africa. The United States, for example has reduced its

RR

R

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Kemp Munnik leads the Structured Solutions team at Bravura. He spent time at SARS and was part of the team that started Project Finance at ABSA (United Bank). He later joined BDO, as Head of Tax, was awarded an International Tax award and appointed as Head of Advisory. During this time, he attended Harvard Business School. Bravura is an independent investment banking firm specialising in corporate finance and structured solutions with specialist expertise in B-BBEE ownership transactions.

rate from 35% to 21%, the Netherlands from 26% to 21%, and the United Kingdom from 30% to 19%. China’s corporate income tax rate is 25%.

Reducing the corporate tax rate would act as a stimulus to the South African economy. It should entice businesses to invest in new products, new projects and new ventures. The longer-term benefits will therefore be significant. This makes it something that Ramaphosa should give serious consideration to as he looks for ways to attract more investment.

Government debtIf government expenditure exceeds revenue, the difference must be borrowed, which adds to the level of government debt. This implies that the government’s burden on the economy (total government debt as percentage of gross domestic product) will increase. Certain economists have commented that SA has entered an unsustainable debt spiral.

The MTBPS expects gross loan debt to increase to 55.8% of GDP in 2018/19. Debt is expected to stabilise at 59.6% of GDP in 2023/24. South Africa’s fiscal position is therefore substantially weaker than it was at the time of the 2008 financial crisis, when South Africa had a gross debt-to-GDP ratio that was just above 26%.

No savings in public sector wage billTreasury admitted in September this year that the contraction of public finances is placing tremendous stress on government and its ability to finance public services and this threatens the affordability of planned

expenditure. A budget deficit requires government to make tough decisions regarding cost expenditure.

It does not seem as if the government has the stomach to do this. Perhaps the biggest concern is the ever-growing public sector bill. The MTBPS states: “The compensation of public servants accounts for a large and growing proportion of consolidated spending. Compensation spending was one of the fastest-growing items in the budget, increasing at an average of 11.2% a year.”

According to the Organisation for Economic Cooperation and Development (2017), South Africa’s government wage bill is one of the highest among developing countries country peers. The consolidated wage bill increased rapidly from 32.9% of spending in 2007/8 and remains at about 35% of total expenditure.

A three-year wage public service wage agreement was announced on 8 June 2018. The wage agreement was implemented with effect from 1 April 2018 and covers the period 2018/19 to 2020/21. Most public service workers will receive at least 0,5% to 1% above inflation over each of these three periods

SAA and South African Post Office receive nearly R8 billion in additional fundingState-owned enterprises like Eskom and SAA have been an enormous drain on government resources. The roughly 55% debt-to-GDP ratio masks an additional 15% debt in government guarantees for SOEs, an obligation that the government cannot shy away from. The financial recovery of SOEs is therefore key to getting economic growth and investor confidence back on track.

The MTBPS recognises that: “Several entities with acute financial difficulties do not have sufficient cash to repay debt falling due. Ordinarily these institutions would refinance these amounts but given negative investor sentiment there is a strong possibility that they will have to redeem this debt.”

The MTBPS issues a severe warning: “The quality of public expenditure is often poor and governance problems are often severe, particularly in provincial and local government, and state-ownedcompanies. Government is tackling these problems. … In the interim, however, distressed institutions at all levels of the public sector are risks to the public finances.”

ConclusionGovernment had an opportunity to reinforce confidence and contribute to a recovery in growth and investment in the 2018 MTBPS, and to steer South Africa’s economic fortunes in the right direction. Against the sobering news delivered, Corporate South Africa would probably still hold its breath. We’re well advised to keep watching this space.

“The quality of public expenditure is often poor and governance problems are often severe, particularly in provincial and local government, and state-owned companies."

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22Opinion

For more than a year now I’ve been digging into a question: How do you activate people to co-create the future? It is becoming increasingly clear that personal values are key.

Awareness of personal values: the first construct of innovation leadershipRobert Louw, IoDSA member

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“Creative work is often subtly undermined by fear. It can be fear of failure: physical injury, financial loss, social pain or disappointment in yourself.”

Unfulfilled personal values drive people to innovateWhat drives your creative efforts? And your risk-taking? What motivates you to create your future? It should be an awareness of what matters most. Nobody wants to invest time, risk money or work until the age of 65 only to be partially satisfied. We need to take initiative according to what we value most: according to our individual values.

Mohamed Maher, my mentor, whom I met during a master’s program in innovation management in Sweden, says, "Personal values are the moral meanings that have been missing in a person's history." These meanings are intertwined with personal feeling and so your personal values are your intuitive reference point of value creation.

In other words, a person's internal motivation is based on their understanding, their personal life stories and an awareness of what they missed most. This can be a greater source of energy than any external motivation to do daring, creative work. Do you understand where the people you lead are coming from?

The best creative work satisfies personal valuesCreativity is a need. Anyone can generate ideas: find information on the internet and combine it in new ways. For how long, though, should they search for information? By what basis should they select new permutations of concepts? For many employees, the answer is simply to fit into the crowd: just copy the trend (or counter-trend) and generate ideas until the deadline.

The question is how to instill a powerful sense of creative tension in your company culture and get more valuable ideas. To some extent, it does help to use processes like design thinking or techniques like Edward de Bono's Six Thinking Hats.

Maher says, "Real creativity is driven by

the need to create a solution towards a personal vision in a clear strategic direction. This need is triggered in relation to the strength of the personal ownership of a vision."

So, the quality of your team's ideas will be proportional to the extent to which they share your vision. In addition, the different facets of the shared vision need to connect to what different stakeholders’ value most.

Personal values are a reference point for risk-takingCreative work is often subtly undermined by fear. It can be fear of failure: physical injury, financial loss, social pain or disappointment in yourself.

"What appears risky for one person doesn’t appear so risky for the person who is taking the risk," says Maher. "In fact, people take risks when they realize that the current reality is getting riskier than taking a proactive step; or when they realize an opportunity out there that brings more secured results to their personal values."

You or your team may be at a point where your sense of risk-taking is miscalibrated. On the one hand, it happens that people need to rethink what should be done. There may be a lack of awareness of what is personally most important. In such

cases, individuals may misjudge what initiatives the company needs or overlook opportunities to take initiative. On the other hand, people sometimes need to rethink what can be done, because people take risks based on their sense of what they can do. Sometimes I do overestimate or underestimate my ability.

The method I recommend to calibrate your sense of risk-taking is Tim Ferriss's Fear Setting. It is analogous to goal setting, but it is particularly helpful in uncovering what is most important and finding ideas impeding action.

Constructs of innovation leadershipA major lesson I have learned in working to develop my own innovation leadership is that the concepts of risk, creativity and values differ between each person. This is why these concepts require reflection and it is why the best innovations are co-created with others.

Schedule half an hour for the four questions of fear setting:1. What are your biggest fears for you and

your company?2. How can you prevent or repair failure?3. What would be the benefit of a partial

success?4. Where would you be if you did not take

action?

Based on your reflections on the above questions, you should be able to design small experiments and take small steps toward creating a better future.

Robert Louw is the Director of Innovation at Prefrontal Constructs, a boutique consultancy based in Johannesburg. Robert earned his masters’ degree in innovation management from the Royal Institute of Technology in Sweden in 2015.

IoDSA membership experienceI will soon renew my IoDSA membership for a second time, because of the quality and richness of the discussions at the Institute.

24Opinion

25

The gap between remuneration and performance Guy Addison, IoDSA member

The agency problem is a timeless maxim describing how management often have different goals to those of the shareholders for which they work. The current swathe of high-profile remuneration centred articles in our press brings this issue into the limelight once again. Are management using their position at the top of organisations to feather their own nests? In these circumstances, there appears to be a complete disregard for building long-term shareholder value. It ’s high time that purveyors of governance standards start interrogating this ‘elephant in the room’.

On reviewing the integrated reports of JSE companies it is evident that significant differences exist between

what a company’s strategy is and how it pays its executives. An example cited in the most recent executive remuneration position paper released by the Institute of Directors makes the point:

One mining company, for example, lists energy and water consumption, CO2 emissions, workforce diversity and socio-political factors as key to creating value over the longer term. However, the measures in the incentive schemes are almost exclusively financial, namely, cost management, growth in earnings-per-share (EPS) and total shareholder return (TSR). This creates the impression that the executives are being asked to do one thing but are being paid to do something else.

IoDSA Position Paper 7: Paying for sustainable performance

The problem for shareholders up until now is that they have little power with which to interrogate many of the long-term incentives which are typically structured over three to five years. While compensation is ultimately the decision of the remuneration committee, this doesn’t mean that shareholders must be passive. King IV Codes on Governance have been strengthened to deal with these issues, however it remains paramount that these ‘internal stakeholders’ (read Company Boards) move from seeing governance as a mere tick-box exercise to an outcomes orientated one where principles are applied and explained to shareholders.

Recent coverage of activist shareholders taking company boards to task for their remuneration structures highlights the growing discontent with the status quo. Such circumstances are further compounded when organisations extend loans to management to finance these schemes. In many current companies, shareholders have experienced a double-whammy with their shares down considerably over the past five years. High profile listed companies are not alone in situations like this with non-executive directors of many unlisted companies starting to take note.

In addition to poorly performing equity markets, new legislation, most notably Section 8C of our Income Tax Act, has added further drains on the effectiveness of current share incentive structures. All gains arising under employment-linked share incentives (whether options or share purchase schemes) are taxable as income. Taken with the recent increase in the marginal tax rate to 45%, companies are awarding greater tranches of shares to executives to compensate for this increased ‘cost’. In effect, ordinary shareholders are paying the price.

Another core problem with executive remuneration is the lack of innovation in setting effective remuneration structures. As stated in the IoDSA’s position paper “very often, gaps between strategy and remuneration exist because remuneration policies and metrics are designed to first and foremost conform to industry benchmarks”. Share incentives have

largely become a commoditised cookie cutter structure. This needs to change with new structures to better align performance conditions. This continued innovation to share incentives structures should be focused on achieving win:win arrangements for executives and shareholders alike.

In conclusion, those charged with governance across our economy should focus on changing the current inflexible and expensive share incentive schemes currently being used in South Africa. Much work still needs to be done in respect of executive remuneration in South Africa. The argument that ‘everybody is doing it this way’ is being questioned.

The answers will surely be of interest to all of us.

Guy Addison is a Director of Addison Advisory, a corporate advisory firm based in Gauteng, specialising in structuring transactions.

Value of IoDSA membership: The IoDSA has provided an opportunity to network with fellow executives across the broad spectrum of businesses operating in Southern Africa.

Twitter handle: @guyaddison

26

Conversing curiously about gender diversity Joy-Marie Lawrence, IoDSA member

Opinion

Engage in curious conversations to uncover opportunities to address gender diversity in the boardroom

27

T he quote: “Our lives are defined by opportunities, even the ones we miss.” by Eric Roth from the screenplay, The

Curious Case of Benjamin Button triggers a myriad of questions about opportunities in my mind.

Have you ever wondered about those opportunities gained and missed, and how the effect(s) impact how you lead, and how the decisions you drive impact the lives of people those decisions affect? Now, think of this question concerning gender parity in your organisation – at all levels firstly and secondly, at a board-level. What comes to mind for you?

For me, what comes to mind is that if we don’t address the gender gaps in business, it will expand and will result in a string of missed opportunities to close the gender parity gaps.

Published by the 30% Club Southern Africa (30%CSA) on 6 November 2018, the report: The state of gender on JSE listed boards 2017: A study of the opportunities for gender balancing the boards of companies listed on the Johannesburg Stock Exchange (JSE), provides board members insights into the gender gaps on boards of JSE listed companies.

The slow crawl towards gender parity has influenced the negative, pessimistic tone of discourse on the issues of women representation at board-level. It is an opportune time for board members in all sectors to heed insights shared in the report to address gender gaps with positivity and change the discourse. If we as board members don’t address the gender gaps, we will not shift from this discourse and address gender-specific transformation issues in our respective organisations.

However, let’s first start by asking a few questions that will hopefully help stimulate conversations and thought processes on gender parity in your organisation.

1. How curious are you about the opportunities to bring about gender diversity into the boardroom?

2. How curious are you about reasons why the majority of boards have no women on boards?

3. Do your teams at senior levels share the perception that there are insufficient women of the right calibre to heed board roles?

4. How curious are you about insights on gender biases in our organisations?

5. What initiatives can you roll out to build the women leadership pipeline in your organisation?

These questions are an excellent start to stimulate thought processes that can lead to kick-starting initiatives that will enable an accelerated shift without considering scorecards and quotas. Driving change with these questions creates opportunities for curious conversations to unfold and

can provide a better understanding of how to make measurable change happen and discourage negative perceptions that may exist to manifest in narratives in the workplace.

When we don’t engage curiously, we run the risk of leading with incuriousness, disinterest, apathy and unconcern. To address gender parity, leaders who participate in curious conversations productively gain valuable insights that facilitate driving positive change. Consider creating an enabling environment for critical discussions, open debate and engagements and make a concerted to listen proactively to the women in your organisation. Show interest by asking open questions about their desired change and allow for women to be courageous, inspired and foster bravery.

Effective, 1 January 2017 all Johannesburg Stock Exchange-listed companies are

required to adopt a gender policy at board level and to report the policy plan in their Integrated Annual Report. While each board will embark on its journey to transform, those who have not yet implemented a gender policy at a board level, or gender-balancing will find it a challenge to (1) understand the need to shift into a curious-state-of-mind about gender diversity, and (2) to make this shift consciously.

Therefore, a desire to bring about change starts with the desire to learn about new opportunities, showing interest and asking questions. It is the first step to having leaders’ minds fed to engage in conversations with empathy, attention to learning and to inspire change. We have the opportunity to inspire women to unleash the non-intellectual benefits that curious conversations hold: psychology, emotional, social and health.

There has never been a more opportune time to engage in curious conversations about gender diversity and lack thereof in the boardroom. Let’s not miss the opportunities to impact lives positively.

"The slow crawl towards gender parity has influenced the negative, pessimistic tone of discourse on the issues of women representation at board-level."

Joy-Marie Lawrence is the Group Executive for the Western Cape at EOH Holdings Limited. A Chartered Director South Africa (CD SA) and a qualified Integral Practitioners Coach, she holds an Executive Master’s in Business Administration EMBA, Master of Laws, Bachelor of Laws and a Bachelor of Arts.

Joy-Marie’s board roles and Directorships include advisory board member at UCT Graduate School of Business (UCT GSB), Chairperson of SANSA, Chairperson of the Diageo South African Empowerment Trust, Non-Executive Director of WDB Investment Holdings Pty Ltd., Non-Executive Director of Tekano Health Equity and Trustee of the Legal Resources Trust.@JoyMarieZa

28Opinion

Leadership and the critical success factors for black leader integration into large businesses Dr Biren Valodia, IoDSA member

29

"Black leaders want to experience a genuine commitment to broad-based black economic empowerment, to the valuing of diversity and the support of community-based organisations, to employment equity, but also the provision of autonomy to black managers."

Valodia, B., Sun, T., & Zachariah, T (2018). Critical success factors that influence Black leadership integration in companies listed on the Johannesburg Securities Exchange. International Journal of Business and Management, 13(5), 72-94.

M y recent doctoral study identified six critical success factors that influence the successful integration

of black managers in large businesses. The study was conducted among companies listed on the Johannesburg Securities Exchange. It employed a pre-validated Multifactor Leadership Questionnaire (MLQ 5X), Revised Job Diagnostic Survey (JDS) and 32 constructs identified in a literature review. These independent and dependent variables were validated utilising factor analysis and Cronbach’s alpha to measure reliability.

According to the study, fair treatment is a critical success factor. Black managers described fairness as the provision of adequate career development opportunities, recognition, mentorship, training and remuneration. White managers also described these constructs as fair treatment but omitted commitment to transformation, cultural intelligence, autonomy and the valuing of ethnic diversity, which black managers included in their description.

Another highly rated critical success factor is the extent to which job-hopping is contained. There is agreement concerning its causes which include intense competition for scarce black management skills, divergent personal values, and tokenism, but black managers included a fear of failure and a lack of trust among white colleagues in their ability to deliver in increasingly complex environments as well as a lack of career development opportunities as causes for this phenomenon.

The challenge of creating an enabling corporate culture featured prominently as a critical success factor in the study. Black managers see corporate culture as

a frustrating road block as it often comes embedded with a lack of trust, insufficient mentorship and training, an impenetrable “inner circle” and embedded difficulties such as language.

A commitment to transformation featured prominently as a critical success factor in the integration of black leaders into established businesses. Black leaders want to experience a genuine commitment to broad-based black economic empowerment, to the valuing of diversity and the support of community-based organisations, to employment equity, but also the provision of autonomy to black managers.

The lure of entrepreneurship in an age of empowerment also featured in the study – at least in the sense that established businesses must find ways to present black leaders with a compelling option to eschew opportunities to establish their own businesses. The appeal of entrepreneurship recurs in part because of continuing frustration with corporate culture and the reality of existing entrepreneurial opportunities afforded by empowerment.

Type of leadership and leadership style in particular is a key and critical influencer to successful integration of black managers. In the study, an interesting divergence occurs. White managers identified a relationship between job satisfaction and career development, and the “idealised attributes” leadership style as identified in the Multi-Factor Leadership Questionnaire 5X (MLQ 5X). Thus, for them, there is a relationship between job satisfaction and career development and leaders “instilling pride in others for being associated with ‘me’, going beyond self-interest for the good of the group, acting in ways that build others' respect for ‘me,’ and displaying a sense of

power and confidence.” For black leaders however, an inverse

relationship exists between job satisfaction, career development and “idealised attributes” of leaders. Black managers prefer “inspirational motivation”, with leaders talking optimistically about the future, talking enthusiastically about what needs to be accomplished, articulating a compelling vision of the future and expressing confidence that goals will be achieved.

In summary, an effective leadership style, in tandem with addressing the personal development of black leaders, addressing the corporate culture, and a strong commitment to transformation, coupled with a wider understanding of what constitutes fairness can address challenges such as job-hopping and the lure of entrepreneurship and in doing so, potentially improving an institution’s ability to better integrate black leaders into its ranks and enable it to contribute to better diverse and inclusive management teams in corporate South Africa.

The full article can be accessed: http://www.ccsenet.org/journal/index.php/ijbm/article/view/73615

In the wake of decades of racial segregation and the subjugation of black people in South Africa, the first democratically-elected government promulgated various legislative reforms to redress social inequality and discrimination, including the Employment Equity Act in 1998 as well as the Broad Based Black Economic Empowerment Act in 2003, that aimed at increasing the number of black men and women in all levels of management in local businesses. Based on annual reports subsequently issued by the Commission for Employment Equity, the intended outcomes have not met the legislative intentions in particular with regards to the number of black executives in large businesses.

30

Shadow director jeopardy stalks SA advisory boards Auguste Coetzer and Michael Judin, IoDSA members

Opinion

F or example, the coming trend around the establishment of advisory boards carries with it a largely overlooked

risk that deserves to be examined in detail before any harm is done.

To explain… Advisory boards seem an obvious way forward for companies run by executives with limited global leadership exposure. One of the biggest advantages of advisory boards in South Africa is the facilitation of input and advice from wise old heads. In this way, highly respected, vastly experienced managers can make an important contribution to the company and the new South Africa. At the same time, younger managers and business school graduates benefit from the sort of knowledge not found on an MBA course.

Some businesses also recruit advisory board members for the ‘halo effect’. They borrow credibility or gravitas as a line-up of advisory board luminaries can smooth the path to the big league and might attract investors or assist in fundraising.

Practical considerations also support the trend. Formal board structures are expensive to set up while company directors carry heavy fiduciary and statutory responsibilities. Remuneration of advisory board members is often modest, making these informal structures affordable for young, dynamic companies.

In effect, relatively inexperienced executives tap into a wealth of knowledge at a discount, while the business benefits from diversity and access to a wider range of opinions.

Of course, an ‘elder statesman’ is sometimes seen as a human Rolodex, with scores of local and international contacts. Gaining access to such a high-level

network can be as simple as bringing a senior figure on to the advisory board.

Other needs can also be addressed through the use of advisory boards. For

example, a company planning to enter new, high-growth markets dominated by black consumers may need the insights of black influencers, who could be recruited to the advisory team. Young advisors might also be used on an advisory board to lend digital skills to an older board with limited understanding of high-tech developments.

For all these reasons, many companies (and some charities) increasingly ask leading firms of executive ‘head-hunters’ for the names of possible candidates for

places on their advisory boards. This can be an easy ‘sell’. Many senior personalities are eager to give back. They are generous with their time and eager to share knowledge with a new generation of business leaders.

Advisory board remuneration may not be spectacular, but advisors carry no statutory or fiduciary responsibilities. It’s not a hard slog in the corporate trenches. You’re not giving blood, you’re giving strategic insights.

So, where’s the potential flaw?The pitfall is found in the grey area

between advice and direction or between a general observation and a specific instruction.

If an instruction or direction is given, an advisor may be regarded, for legal purposes, as a ‘shadow director’ and that could spell trouble for any advisor who has not taken out insurance to cover the risks run by formal boards of directors in the event of liquidation or fraud.

Advisors found to have acted as shadow directors may be held to be just as accountable as formal directors.

The definition in the UK Companies Act is illuminating. It says a shadow director is someone “in accordance with whose directions or instructions the directors of a company are accustomed to act”. Though our Companies Act does not specifically refer to shadow directors, section 1 is broad enough to include the concept in view of the phraseology “occupying the position of a director”.

Risk also applies should a company portray an advisory board member as a member of the formal board.

Individuals are also on risky ground if they regularly negotiated on behalf of the

Some concepts are so useful in a new nation crying out for skills that widespread adoption is only a matter of time. The danger is that the advantages are so manifest that they distract attention from the one potential flaw that could turn a well-intentioned initiative into catastrophe.

"The pitfall is found in the grey area between advice and direction or between a general observation and a specific instruction."

31

company or took on a corporate function; perhaps recruitment of certain specialists or professionals who might have been impressed by the involvement of such a senior figure.

Should a firm become insolvent, a liquidator will closely scrutinise the actions of all responsible persons, and this may include members of the advisory board. Much the same applies in the event of fraud.

In a worst-case scenario, creditors may target anyone assumed to have ‘long pockets’, including advisory board personalities who apparently acted as shadow directors. The result could be personal bankruptcy.

Overstepping the line between advice and active participation in the business can be extremely easy. As the advisor works more and more closely with senior figures, he or she may be consulted quite frequently.

You may think you are simply being helpful by going over a business plan or reviewing financial projections. This may become a habit. After a time, what you say goes on specific issues, taking you into the no-go area where you become a shadow director.

If you wish to avoid directorial liability, don’t go there. The good news is that alleged liability only becomes an issue if you functioned as a shadow director. If you simply acted as an advisor while sitting on an advisory board, you are totally in the clear.

Auguste Coetzer (left) is a Director of Signium Africa (previously Talent Africa), a leading South African-based executive search and talent management company servicing sub-Saharan Africa.

J. Michael Judin is a partner in the Johannesburg law firm of Judin Combrinck Inc. He is a member of the King Committee, a non-executive director of the American Chamber of Commerce in South Africa and co-chairman of a sub-committee of the American Bar Association Business Law Section.

32Member Achievements

Joe Ndala was appointed as Managing Director of AECOM’s South African business. Mr Ndala, formerly the Chief Financial Officer for AECOM’s Africa operations, will be responsible for the development of this strategic market working with AECOM’s valued clients and delivery partners. Mr Ndala has been with the firm since April 2014.

Highest global banking qualificationNangamso Maponya has become one of only a handful of South Africans who has qualified as a Chartered Banker, after achieving the highest specialist banking qualification available.

Nanga, who currently works as a Senior Investment Banking and Project Finance Professional at the Development Bank of Southern Africa, earned a Chartered Banking MBA from the Bangor Business School in Wales in the United Kingdom.

She is a member of the Board of Trustees for the Gauteng Partnership Fund (GPF), a member of its fundraising committee and chair of the GPF’s Audit and Risk Committee. She is also an independent Investment Committee Chairperson of Sizwe Medical Fund.

In addition to her Chartered Banking MBA, Nanga holds a Master’s Degree in Finance and Investments from the London School of Business and Finance and an MSc in Finance from the Geneva Business School.

The Range Rover Velar is the first of its kind: its design cues are compelling and effortless; its technologies are advanced, and its Land Rover capability is supreme. This is a vehicle that will take you anywhere and everywhere with consummate ease.

Whether you’re motoring down the Autobahn or negotiating a tricky country lane, Range Rover Velar has capability at its core.

landrover.co.za

MORE REFINED CAPABILITYRANGE ROVER VELAR

33Member profile

The role of the director is changingAs we become increasingly entrenched in a new age of disclosure, access to information and accountability, the role of the director is changing, and simply sitting on a board for the sake of it is no longer enough. Today’s directors are responsible to stakeholders, members and the organisation; an active role that carries more weight than ever before.

T his is the viewpoint of Janet Hugo, Director at wealth management and financial planning consultant,

Sterling Private Wealth, who also maintains that in today’s business climate, there is no fixed and correct way of doing things. “Ultimately, a good leader understands that where the rules around business and society were once rigid, today creative thinking, managing different outcomes and sound communication skills are far more useful than sticking to the way things were done in the past.”

It’s an approach that has served Hugo well, both on a personal and professional level. In her own business, she has realised the importance of playing to her strengths and surrounding herself with a team of people who are able to support her in other areas.

In order to be future fit, she says, businesses no longer have to be everything to everyone. “Rather it’s about having a good network of people where one is able to outsource areas that do not fall within your particular area of specialisation – this is the way of the future,” she comments.

Hugo was awarded the prestigious FPI Financial Planner of the Year Award earlier this year, one of only three women to have

won the award in the past 18 years. Her reasons for entering were both personal and professional – on a personal level she wanted to set ‘bigger’ goals as she is a great believer in continuous personal growth and development. Professionally, the award has provided validation for her clients and a benchmark of her abilities as a financial planner to become a trusted advisor in their lives.

Being one of so few women in a largely male dominated industry, to have won the award opened her eyes to the important role women have to play in supporting and mentoring each other. “I have always felt confident rather than compromised by the fact that less than 10% of people in this industry are women. That said, working as woman in the industry provides a wonderful platform from which to nurture and engage with other women.”

Indeed, Hugo believes that in the business world, standing out is a positive and not a negative. She hopes to see a future in which there is a free flow of communication and where people of all ages are encouraged to share their views and be heard. “Going forward, embracing new methods of communication will be crucial for business,” she believes.

"Ultimately, a good leader understands that where the rules around business and society were once rigid, today creative thinking, managing different outcomes and sound communication skills are far more useful than sticking to the way things were done in the past.”The Range Rover Velar is the first of its kind: its design cues are compelling and

effortless; its technologies are advanced, and its Land Rover capability is supreme. This is a vehicle that will take you anywhere and everywhere with consummate ease.

Whether you’re motoring down the Autobahn or negotiating a tricky country lane, Range Rover Velar has capability at its core.

landrover.co.za

MORE REFINED CAPABILITYRANGE ROVER VELAR

34Gender Mainstream Awards

Gender Mainstreaming AwardsThe Gender Mainstreaming Awards were conceived by Business Engage in 2013 to encourage the private sector to buy-in to achieving more meaningful representation of women in the mainstream of business. Companies are invited to participate for the ten company awards.

I n 2017 a new award Gender Reporting by JSE Listed Companies Award was added. This award recognises and

acknowledges companies that have embraced both the spirit and the letter of this new listing requirements which necessitates the board of directors or the nomination committee of all JSE Listed companies, as the case may be, to have a policy on the promotion of gender diversity at board level. This year two individual awards were added to recognise role models and inclusive leaders.

As gender diversity is still fairly new worldwide it is understood that many companies are just starting on their journey and they are encouraged not be put off by this. They are encouraged to use the awards as a springboard to further achievements. The programmes may be from South Africa and/or international programmes. The Awards are sponsored by PwC since inception.

35Book review

Essential business reading brought to you by the IoDSA from getAbstract.

The IoDSA partners with getAbstractgetAbstract is a service that summarises the most influential business books published throughout the world and is included as part of the IoDSA membership.

To access your account, follow these steps:Log on at: www.getabstract.com/re/iodUsername: Please use your email address provided to the IoDSAPassword: Please use your IoDSA membership number

What Are Your Blind Spots?Conquering the 5 Misconceptions that Hold Leaders BackJim Haudan and Rich Berens, McGraw-Hill, 2018Statistics say that about 70% of your employees suffer disengagement from their jobs. Unfortunately, many leaders have no idea how to engage their employees, often because of insidious “blind spots” in their thinking. These faulty management ideas rest on inaccurate information masquerading as business philosophies, and they’re destructively resistant to facts. Seduced by the attractive simplicity of these blind spots, leaders mistakenly use them as foundations for planning and strategizing how they and their firms should relate to their employees. Root Inc. consultancy co-founder Jim Haudan and CEO Rich Berens warn that failing to recognize these blind spots can cause you to stifle your best employees instead of giving them the autonomy to do their finest and most engaged work. To transform your organization and unlock the potential of your employees, the authors say, just open your eyes.

Extraordinary InfluenceHow Great Leaders Bring Out the Best in OthersTim Irwin, Wiley, 2018Be sure you’re not using motivational tactics that could upset and demotivate people instead of bolstering them. Leaders should help their staff members become better employees and better people, not berate and threaten them. You can enhance your ability to bring about change in others by acknowledging and encouraging them instead of criticizing them. Tim Irwin's compassionate, wise manual explains how to head employees and yourself in a positive direction. His clarity makes his insights eminently readable. His guidance will be useful to senior executives and anyone in a position to affirm other people. His clarity makes his insights eminently readable. getAbstract recommends his guidance to senior executives and anyone in a position to affirm and motivate other people.

The Gig Is UpThrive in the Gig Economy, Where Old Jobs Are Obsolete and Freelancing Is the FutureOlga Mizrahi, Greenleaf Book Group, 2018As the advantages of full-time employment diminish – with health insurance, pensions and other benefits fading away – freelance work is an increasingly appealing alternative. Gig work can offer relative freedom and steady financial rewards. In this brief how-to, educator Olga Mizrahi shows how to utilize third-party apps like Upwork or Guru to break into the freelance market and build a reputation. She describes how to move from apps to cultivating your personal client base and even hiring a staff. Mizrahi, an instructor at the University of California, Irvine’s Continuing Education program, offers a quick, peppy survey of the issues freelancers face – from acquiring insurance and planning for retirement to managing their time and contending with bad reviews. Her manual is an apt primer for newbies in the gig economy.

Disruptive SellingA New Strategic Approach to Sales, Marketing and Customer ServicePatrick Maes, Kogan Page, 2018In the not too distant future traditional salespeople may become as extinct as the dodo bird. Signs of the remarkable “disruptive selling” revolution are now evident online. Traditional sales rely on human-to-human interaction, but automation is upending this dynamic. Many sales now come from human-to-machine interactions, such as orders placed on Amazon. Thanks to the Internet of Things and advances in AI, customer-bot to company-bot transactions may one day supplant human-to-human transactions. Sales consultant Patrick Maes explains the momentous changes uprooting sales and describes far-reaching, technological advances yet to come. getAbstract recommends this eye-opening overview to marketing, sales and customer-service professionals.

36

Wine: When demand exceeds supply

In California and other top wine producing regions, many of the best wines are only available on allocation. In other words, you invariably have to belong to their wine club and commit to buying so many cases a year. Otherwise you simply cannot get hold of them. Some of our top wines are now being bought up by overseas buyers and top restaurants around the world and so are being exported, leaving local buyers out in the cold, often scrambling to get their hands on some of those top labels. Although I do get upset when I go onto an overseas web site or read articles by wine maven Jancis Robinson in the Financial Times and see South African mentioned wines I have never heard of, all being exported.

Wine

E very year at the Cape Winemakers Guild Auction, companies like Tsogo Sun through their wine guru Miguel

Chan, will buy parcels of these wines; showcasing the best of South Africa in their restaurants around the country.At the pre-auction tasting in Johannesburg, each wine introduced by the winemaker, we tasted 36 wines in the two-hour formal tasting with a further 12 waiting to be tasted informally. Perhaps I should admit that Miguel and I often sit and spit together on the occasion that I am invited to an event. I am in awe of his knowledge, so if ever you have the opportunity to listen to him at a tutored tasting, it’s well worth while.

Increasingly wine producers are realising it is a total team event, no one person is

able to do everything. The proprietor with most influence on the wine industry has to be Johan Rupert, he of Swiss luxury goods company Richemont fame, and his influence goes far and wide. Another great ambassador for South Africa is Anthony Hamilton Russell and his wife Olive, focused on chardonnay and pinot noir, and about to start production in Oregon on the west of the USA. And amongst the wealthy overseas proprietors whose influence is often under the radar, is Vivien Imerman breathing life back into KWV and putting it back where it belongs.

One interesting local event has been the sale of the Ratcliffe family’s Warwick Wine estate to Californian wine investors and the appointment of Christian van Arnhim as CEO, yes that’s Taquin’s wife

and Achim’s daughter-in-law, of Cabrière fame. So, watch that space. Whilst Norma Ratcliffe, to many the first local female winemaker of note, and now there are so many, has largely retired, although certainly not the retiring kind, son Mike, who seriously understands marketing has been building the Vilafonté brand since 2001. Reminiscent of Sonoma’s Opus One which I wrote about in the last issue, Vilafonté is a partnership between Stellenbosch and one of California’s top wine teams: Zelma Long with a global wine making reputation second to none and viticulturalist Dr Phil Freese, her partner in life. The great Robert Mondavi was once quoted as saying: ‘There was no one better to learn from than Zelma’. At a tasting of the Series C Library Collection

37

we sipped the 2006 (Elegant & Powerful), 2010 (Firm & Deep), 2013 (Rich & Dense) and the just released 2016 (Sensuous & Refined) priced around R800 per bottle. All absolute stunners. If that price tag is a little challenging, try the second label Seriously Old Dirt at R180. These are all wines that do South Africa proud on the world stage. They also have considerable investment potential.

One tragic event that took place late in October was the fire at a large warehouse belonging to Stellenbosch Vineyards, destroying an estimated over 10 million bottles. Many have suffered, but worst effected were Ken Forrester and Klein Zalze both producers of some of the finest chenin in the land. Add to that the drought years in the Western Cape from 2015 – 2018 and you will note wine volumes are down.

Returning to the subject of allocation, in the UK there is no wine merchant with a greater reputation than Berry Bros & Rudd based in leafy St James’s.

Their website has a feature: Spotlight on South Africa, which starts by saying: “It has taken nearly 20 years for the South African wine trade to become the exciting

place it has become today. The once widespread production of inexpensive, inferior wines has made way for smaller volumes and higher quality.” Prices start at !0 (R200), the choice is wide, the sky is the limit, and our wines are now increasingly being reassessed and rerated. But just think that a bottle of Klein Zalze chenin blanc – if you can still get it – starts at under R50.

Just as Californian wine had its breakthrough on May 24, 1976 at what became known as ‘The Judgement of Paris’ when at a blind tasting against some of the best local wines, they came out either on top or a close second, South African wines are breaking through. No longer anything to apologise for. As with anyone striving to win, self-belief and confidence can be a game changer. Put another way, in investment terms they are a definite BUY.

Jeremy Sampsonjdrsampson@gmail.com

Fellow of the IoDSA

"South African wines are breaking through. No longer anything to apologise for."

38

S outh Africa’s Sani Pass, which winds its way across the Drakensberg to link KwaZulu Natal with Lesotho, has a formidable

reputation for providing a 4x4 challenge. Often described as the mother of all

of South Africa’s mountainous routes, it tends to eclipse its competitors for deeply eroded gravel, hairpin bends, bad weather and treacherously slippery slopes.

Due soon to be tarred – with preparation work already underway in the foothills – the pass was recently chosen by Toyota South Africa to provide the test bed for the launch of the company’s latest rendition of its Land Cruiser Prado.

With an off-road heritage that spans more than 65 years, the Land Cruiser line-up is perceived to be unique in its segment for its ability to combine quality, durability and reliability with off-road performance and high levels of luxury and comfort.

“Unmatched off-road abilities have earned the Land Cruiser a rock-solid reputation as one of the world’s toughest and most reliable 4x4s,” says a statement issued by Toyota. “The new Prado enhances this reputation with more

modern and robust exterior styling, a more sophisticated, comfortable and higher quality interior and improvements to its user-friendliness – both on and off-road.”

That all the vehicles in the Sani Pass convoy – each equipped with the company’s popular four-cylinder, 3,0-litre D-4D engine which produces 120kW and 400Nm – conquered the route without incident bears testimony to Toyota’s faith in the Prado’s capability though, in my view, a significant improvement could be made to the derivative’s auto gearbox.

In highway driving the five-speed unit is slow to respond to prods of the accelerator, hesitating often before down- or up-shifting. Company spokesmen say gear ratios have been optimised for low-speed tractability and off-road use, so perhaps the explanation goes some way clarifying the diesel model’s real purpose.

Not that the vehicle is slow on the highway. It will eat up kilometres at a steady 120km/h with ease, leaving plenty of power in reserve. And it’s superbly comfortable and secure on the road, too, contributing to an overall feeling of well-

being in the cabin. However, perhaps a six-speed auto ’box

similar to that which is fitted to a petrol-driven sibling – which is powered by a 4,0-litre, V6 unit that produces 202kW and 381Nm – would provide the diesel-driven derivative with the cog-swapping slickness it deserves.

But back to the Prado’s off-road prowess: All derivatives in the line-up – which bear familiar TX and VX specification grade badges, complemented by a new, top of the line VX-L addition – feature Toyota’s Active Traction Control system (A-TRAC), which actively regulates wheel-slip by directing torque to the wheel with the most traction. The system is capable of braking wheels individually to maximise grip.

Low-range transmission with user-selectable rear and centre diff-locks and Hill Assist Control (HAC) is part of the standard drivetrain make-up, with a Multi-Terrain Select (MTS) system – operated by a centrally mounted rotary knob – available on VX and VX-L derivatives, which also get Downhill Assist Control (DAC).

Road Test

Prado shows its prowess!

Toyota’s new version of the Land Cruiser Prado conquers Sani Pass with consummate ease. Wynter Murdoch reports.

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While much of the Land Cruiser’s off-road capability is rooted in its drivetrain, the vehicle’s highly durable and deformation-resistant body-on-frame construction adds considerably to its competence.

According to company spokesmen, the vehicle’s combination of strength and durability provides a high level of damage protection and is designed for easy maintenance and repairs. The body-on-frame build also efficiently isolates the cabin from suspension impacts, promoting comfort even in challenging off-road conditions.

In terms of styling, Land Cruiser models have tended to combined fashionable aesthetics with a robust image – and the new Prado conforms. Length has been increased by 60mm to 4 840mm, while new-look frontal elements such as the bonnet, grille, headlamps, bumper and wings have been shaped and placed not only for form, but to provide practical benefits that include engine bay protection and improved forward visibility.

The front grille and headlamps have been arranged in a single, powerful graphic and set higher for better off-road functionality, with vent apertures made as large as possible for optimum engine cooling. Headlamp main beams are positioned inboard to avoid damage when driving off-road.

In terms of lighting power, the TX model utilises halogen bulbs, while VX and VX-L models feature powerful LED units. All models are equipped with LED Daytime Running Lights and fog lamps as standard kit.

Ground clearance measures 215mm, coupled with 31-degree approach, 25-degree departure and 22-degree break-over angles. The vehicle rides on new-look alloy wheels that measure 17 inches on TX derivatives and 18 inches on VX and VX-L models.

New elements at the rear include redesigned lamp clusters that feature two stacked C-shapes, an LED stop light, a smaller rear garnish plate and a restyled bumper. Paint colours include a new, red-hued Crimson metallic and an earthy, Avant-Garde Bronze metallic.

Inside, the Prado features a centre console stack that is 25mm lower than that of the predecessor to facilitate better front-on visibility. It is fitted with an eight-

inch, full-colour multimedia screen, a flush-fitting air-conditioning control panel and a drivetrain-related instrument cluster.

Controls for driving and comfort functions are located in separate panels positioned aft of the leather-trimmed gear lever. They include switches to operate new integrated heating and ventilation for the front seats.

The centre console features a silver textured finish with a metallic effect. Soft pads are provided on either side to cushion the driver and front passenger’s knees.

The redesigned Optitron instrument binnacle houses polished dials in a four-gauge layout which, on VX and VX-L derivatives, flank a 4,2-inch TFT colour multi-information display. A combination leather- and wood-trimmed steering wheel is new, similar to that used in the larger Land Cruiser 200.

The luxury and sophistication of the interior have been heightened by white illumination for the instrument panel, centre console and door-mounted switches. The new cabin lighting scheme uses LEDs for the front foot-wells, headlining, glove box and door panels.

Two interior colour schemes are available: Black and Neutral Beige. Matt-finish walnut wood trim is paired with the Black interior, while the beige iteration gets matt blonde wood accents.

The TX model inherits the much favoured cool-box located in the centre console binnacle and, in keeping with the cool theme, all models are equipped with seat ventilation for driver and passenger in addition to a seat-heating function for first and second row occupants.

Top-tier VX and VX-L models are fitted with satellite navigation systems and enhanced surround-view camera systems which include panoramic and overhead

modes. The touchscreen infotainment system incorporates a tablet-like design and easy to operate switchgear.

Standard features across range encompass automatic dual-zone climate control; a six-speaker audio system; electrically adjustable driver’s seat; illuminated, keyless entry; cruise control; park distance control; three power outlets; Bluetooth connectivity; a USB port; third row seating and a reverse camera.

High grade models add a memory function for the driver’s seat; a 14-speaker Premium audio system with woofer; a multi-information display; power tilt-and-telescopic steering adjustment; rain-sensing wipers and power-fold-down third row seats.

Additionally, VX-L grade versions feature a moon-roof and are equipped with active technologies to help prevent accidents from happening, or mitigating the consequences if an impact does occur.

The safety package includes a Pre-Collision System (PCS) with pedestrian detection function; Adaptive Cruise Control (ACC); Lane Departure Alert (LDA) and Automatic High Beam assist (AHB). The ACC system uses radar sensors in the front grille to monitor the vehicle in front, applying throttle or brake to maintain a specified following distance.

Other safety systems on both VX and VX-L derivatives include a Blind Spot Monitor with Rear Cross Traffic Alert, and an upgraded tyre pressure warning system with a digital read-out in the multi-information display.

The systems complement standard safety features such as seven airbags and a comprehensive range of brake and stability control systems – ABS, EBD, Brake Assist, VSC, Trailer Sway Control and Traction Control.

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Business travellers enjoy just a couple of free hours on tripsRobert Curley

Business Travel

The average work day on a business trip is 14 hours and business travellers typically get just two hours daily when they’re not required to work, according to a survey by the men’s clothing retailer Jos. A. Bank.

I t’s not the jet-setting experience you might have imagined from watching old episodes of Mad Men; in fact, 63 percent of frequent business travellers say they even feel pressured to put those few precious hours of

free time to work, such as through networking or meeting preparation.

In addition to the time crunch, the 2,000 business travellers surveyed cited separation from family, airport hassles, and living out of suitcases as among the chief causes of stress on the road.

The men’s suit maker also found that travellers felt pressure to maintain a professional appearance while travelling and sometimes struggled to keep clothing clean and wrinkle-free. Two-thirds of respondents said having a good suit was essential to a successful business trip.

What do business travellers enjoy about their job? The opportunity to see new places, meet new people, and accumulate rewards points were frequently cited. Road warriors also enjoy trying out local restaurants and exploring destinations when they have time to do so, the survey found.

https://www.businesstraveller.com/business-travel/2018/11/08/business-travellers-enjoy-just-a-couple-of-free-hours-on-trips/

Business travellers cited ten secrets to a successful trip:

• Be prepared• Be flexible/go with the flow• Believe in yourself and be positive• Expect the unexpected• Don’t stress about what you can’t control. Let yourself

focus on the matter at hand.• Enjoy the adventure• Keep smiling• Pack smart• Plan ahead• Work hard

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Business travel’s impact on mental health and risk-takingJenni Reid

Though several recent studies indicate that workers are keen to undertake business trips, a new survey shows an increase in people’s levels of stress, burnout and anxiety while travelling for work.

O ut of 200 international business travellers surveyed by International SOS and Kingston University, 45 percent said they

were more stressed on work trips, 31 percent said they experienced emotional exhaustion and a quarter said mental health issues such as depression and anxiety were more prevalent.

A high proportion also reported physical health issues, with 76 percent less likely to have a balanced diet or exercise and 73 percent experiencing reduced quality sleep. A similar number said they worked longer hours while away.

“The business opportunities associated

with international travel are undisputed, but research suggests that frequent travellers make three times as many claims for psychological treatment compared to those who don’t travel on business regularly,” commented Kai Boschmann, director of the International SOS Foundation.

“To safeguard business continuity, as well as fulfilling Duty of Care obligations, organisations need to better understand how they can protect the mental health and physical wellbeing of their employees while travelling.”

The research also found that business travellers were more likely to partake in

what the survey defined as ‘risky behaviour’ while on work trips, with 46 percent more likely to consume alcohol, 35 percent more likely to visit bars and nightclubs, 33 percent more likely to travel to areas they don’t know are safe and 9 percent more likely to start a new sexual relationship. A more modest 2 per cent said they were more likely to have unprotected sex or use drugs than they are at home.

Nonetheless, 67 percent of respondents also said they were more engaged in their jobs due to business travel, while 59 percent said it was an opportunity to enjoy freedom from home life – probably the reason for all that risky behaviour.

46%

76% 2%

73% 9%

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Potsdamer PlatzBegin your stroll ‘Unter den Linden’ and take a somber walk through the Holocaust Memorial. Afterwards, admire the grandeur of Brandenburg Gate. In the 1920s, Potsdamer Platz used to be the busiest square in Europe until it was destroyed in World War II and divided by the Berlin Wall. After the German reunification, it became the largest building site in Europe as it has been transformed into a showpiece of the new Berlin with modern architecture including offices, hotels, cinemas, shopping centers and the massive Sony Center.

Holocaust MemorialThe memorial is made up of 2,711 large rectangular stones as a tribute to the Jews that died during the war as a result of Hitler’s ‘Final Solution’. There is also an information centre that documents personal information about individuals and families affected, including biographical information, recordings and details of other memorial sites throughout Germany. The memorial is well worth a visit and is free to the public.

Brandenburg GateThe remaining city gate is one of Berlin’s best-known landmarks. During the period when Berlin was a divided city, the Brandenburg Gate, or Brandenburger Tor, was located in ‘No man’s land’ behind the Berlin Wall and became famous when it was re-opened on 22 December 1989 after the memorable fall of the Wall. It is a sandstone construction dating from 1791 and supported by 12 Doric columns. It now serves as the centerpiece of Pariser Platz.

Travel

It definitely takes a few days to fully embrace Berlin’s most beautiful areas – but if you have only a short stay in Berlin, like a business trip or a stopover, and you want to superfast dive into the very best of Berlin’s history, culture, architecture, lifestyle, and food – here are a few ideas on how to pass the time.

4 HOURS in BERLINDebbie Bassa

Holocaust Memorial

Potsdamer Platz

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The Gendarmenmarkt

The Museum Island Rent a bike Although Berlin’s public transportation system is phenomenal – the city is best experienced on a bicycle round-the-clock. With a bicycle-friendly culture, supremely flat terrain and dedicated lanes make it accessible even to the most fearful of two-wheels. You can find bicycle rentals across the city from around €8-10 per day. Not only will it allow you to cover a lot of ground (and pack in all those photos), it’s also loads of fun!

Friedrich StrasseBerlin offers fantastic shopping options for locals and tourists alike. If you’d like to enjoy your shopping experience whilst surrounded by impressive architecture, then Friederichstrasse is a must-visit. Shop the world’s best brands to your heart’s content whilst taking in some rich historical sites of the city.

TiergartenThe area west of the Brandenburger Tor is known as Tiergarten, one of the largest urban parks in all of Germany. The Central Park of Berlin if you will. The park is full of life in spring and summer, and in winter it is possible to ice skate on some of ponds within the gardens. There are spaces for picnics, jogging, cycling and field sports such as football. The Berlin Zoo is also located within the park, a tourist attraction in its own right.

Reichstag Near Brandenburger Tor, adjoining Tiergarten as well, is the Reichstag. Opened in 1894, this impressive building now houses the German Parliament. The words ‘Dem Deutschen Volke’, meaning ‘The German People’ is inscribed on the facade. The large glass dome at the top of the Reichstag has beautiful 360-degree views of the Berlin cityscape; however, the dome is only open to visitors by registration – not ideal if you are only in the city for a few hours.

The Museum IslandNot too far from Alexanderplatz, you’ll find the Museumsinsel (Museum Island) offering various art and antiquities museums. It is impossible to see them all – so pick one or two! Alternatively, just stroll around and enjoy the splendour of Berlin at its open air best.

The GendarmenmarktThe Gendarmenmarkt square in Berlin is the site of an architectural ensemble, including the Konzerthaus and French and German churches. In the centre stands a monumental statue of renowned German poet, Friederich Schiller. Many of the buildings were destroyed during World War II, but today all have been restored.

Last word

The world population is aging and living longer. The old-style linear process of education, work, retirement and death has also changed. The main driver of change is technology and the world of work as we know it, is changing at a pace that just seems to be getting faster each day.

The Longevity Dividend Lynda Smith, CEO, 50plus-skills

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H ow do we as leaders in business and society manage these changes? The decisions we make today will impact the people we

serve. It is not business as usual if we are living on average 30 years longer than people born 100 years ago.

There is a great book worth reading called “The 100-year life by Lynda Gratton and Andrew Scott”. They make several statements in the book about what the burning platforms may be.

“If you are in your twenties or thirties you have a long stretch of time ahead to shape differently. If you are in your forties, fifties of sixties then you need to reconsider your future and think about how you will reinvest in the second half of your life. Failure to innovate in response to a longer life will mean stresses and strains in your life as existing models are stretched uncomfortably over 100 years.”

The world of work is changing for all of us. How do leaders start to grapple with what this may mean within their organisation and the impact on society? There are many aspects to consider for the learning and development of your employees or members. Individuals need

to plan and design a different future than their parents and grandparents may have done. For the healthy individuals there may even be an extra season of life before becoming elderly.

Chip Conley, Global Executive at Airbnb is launching a new book in September called Wisdom@Work. This too is a worth reading to understand the complexity and change happening between generations in the work place. Chip calls himself a modern elder. One does not just become a modern elder, one needs to spend time learning, unlearning and relearning. He believes that there are many advantages of combining different generations in the workplace to bring about better results and building capacity and wisdom transfer. He uses a term in the book of being a MenTern. Learning as an intern from the younger generation in exchange for mentoring on emotional intelligence to the younger generation. He also talks about trading DQ (digital intelligence) for EQ (emotional intelligence)

A new organisation has been established

in South Africa to help build conversations, strategy and learning around a longevity dividend. It is called 50plus-skills. The vision of this company is to focus on the 50plus generation heading into this new world. A community platform has been built to accommodate these individuals, for them to register their skills and availability to learn, serve and earn. This group with skills and time is about 2 million strong (Unilever Primetime research) This can also be a national asset to assist with job creation, health and education. 50Plus-Skills are engaging with business and civil society to connect the dots, assist employees and members to adjust to this new season and help build capacity in our nation.

Currently in Sub-Sharan Africa there are about 40 million people over 60. By 2050 this number will be over 160 million. Change is needed now. We owe it to our elders and our children to think about how longevity can be a gift and not a curse.

www.50plus-skills.co.za

"The decisions we make today will impact the people we serve. It is not business as usual if we are living on average 30 years longer than people born 100 years ago. "

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