““ETHICS AND CODE OF CONDUCT OF COUNCIL MEMBERS”ETHICS AND CODE OF CONDUCT OF COUNCIL MEMBERS”

COUNCIL REGIONAL WORKSHOPCOUNCIL REGIONAL WORKSHOP

04 AUGUST 201404 AUGUST 2014

Presented by: M Bikwani

INTRODUCTIONINTRODUCTION

" The greatest want of the world is the want of men and women—who

will not be bought or sold, who in their inmost souls are true and

honest, who do not fear to call sin by its right name, whose

conscience is as true to duty as the needle to the pole, men and

women who will stand for the right though the heavens fall."

Ellen G White

INTRODUCTIONINTRODUCTION

• University – Juristic personUniversity – Juristic person

• Sovereign – Academic freedom.Sovereign – Academic freedom.

• Owned by the people.Owned by the people.

• Owner of very serious assets.Owner of very serious assets.

• Regulated by an Act of Parliament – HEA 101/97, as Regulated by an Act of Parliament – HEA 101/97, as

amended.amended.

COUNCIL & COUNCIL MEMBERSCOUNCIL & COUNCIL MEMBERS

Council of public higher education institution (s27)

(1) The council of a public higher education institution must govern must govern the

public higher education institution, subject to this Act and the

institutional statute.(7) The members of a council-

(a) must be persons with knowledge and experience relevant knowledge and experience relevant to the

objects and

governance of the public higher education institution concerned; and

(b) must participate participate in the deliberations of the council in the best in the best

interests interests of the

public higher education institution concerned.

COUNCIL ROLES AND RESPONSIBILITIESCOUNCIL ROLES AND RESPONSIBILITIES

• Setting mission and purpose.Setting mission and purpose.

• Appointing Vice – Chancellor/Executives/Senior Managers.Appointing Vice – Chancellor/Executives/Senior Managers.

• Evaluating and supporting the Vice-Chancellor.Evaluating and supporting the Vice-Chancellor.

• Ensuring good and effective governance and management.Ensuring good and effective governance and management.

• Accountable for financial and institutional assets.Accountable for financial and institutional assets.

• Making sure there is a clear executionable strategic plan.Making sure there is a clear executionable strategic plan.

COUNCIL ROLES AND RESPONSIBILITIESCOUNCIL ROLES AND RESPONSIBILITIES

• Monitoring the transformation process.Monitoring the transformation process.

• Ensuring student access and success.Ensuring student access and success.

• Good order and a safe campus environment.Good order and a safe campus environment.

• Preserving institutional autonomy.Preserving institutional autonomy.

• Taking stock of council’s own performance.Taking stock of council’s own performance.

THE VEHICLE THE VEHICLE

• Establish Council committees with clear terms of reference:Establish Council committees with clear terms of reference:

• MembershipMembership

• Senior AppointmentsSenior Appointments

• Physical PlanningPhysical Planning

• Advancement and MarketingAdvancement and Marketing

• Audit and Risk ManagementAudit and Risk Management

• FinanceFinance

• Remuneration – external membersRemuneration – external members

• EXCO – all chairpersons of the committees above.EXCO – all chairpersons of the committees above.

HOW - COUNCIL?HOW - COUNCIL?

• The full council should engage:The full council should engage:

• In discussion of the overall institutional mission and strategy.In discussion of the overall institutional mission and strategy.

• Determine the priorities the committees should explore.Determine the priorities the committees should explore.

• Council should not be a repetition of the committee discussion.Council should not be a repetition of the committee discussion.

• Engage in future oriented discussions.Engage in future oriented discussions.

• In dialogue that deepens its understanding, collectively and In dialogue that deepens its understanding, collectively and

individually, of the academic project. individually, of the academic project.

• In discussions that embed a governance culture whilst moving the In discussions that embed a governance culture whilst moving the

institution to greatness/excellence. institution to greatness/excellence.

HOW – COUNCIL MEMBER?HOW – COUNCIL MEMBER?

• Be of service to the institution and not a section – support majority Be of service to the institution and not a section – support majority

decisions – recourse is to resign.decisions – recourse is to resign.

• A trusted ambassador to the general public – if not a councillor – who A trusted ambassador to the general public – if not a councillor – who

will?will?

• Be weary of the media about institutional issues – Chairperson and VC.Be weary of the media about institutional issues – Chairperson and VC.

• Network with other community leaders without using council for personal Network with other community leaders without using council for personal

interest.interest.

• Consistently exercise good judgement and listen discriminately. Consistently exercise good judgement and listen discriminately.

• Provide humility, conviction and leadership.Provide humility, conviction and leadership.

HOW - COUNCIL MEMBER?HOW - COUNCIL MEMBER?

• Act with utmost honesty – beyond reproach.Act with utmost honesty – beyond reproach.

• Act with degree of care, skill and diligence.Act with degree of care, skill and diligence.

• Act in good faith and for proper purpose.Act in good faith and for proper purpose.

• In the best interests of the institution.In the best interests of the institution.

• Avoid insider trading – using information gained in the line of Avoid insider trading – using information gained in the line of

office for personal or others gain. office for personal or others gain.

COUNCIL, COUNCIL MEMBERS & CODE OF CONDUCT (s27(7E)) 2011COUNCIL, COUNCIL MEMBERS & CODE OF CONDUCT (s27(7E)) 2011

• The Act now requires every Council, after consultation with its

Institutional Forum,

• to “adopt a code of conduct to which all members of Council, and

• all members of committees of the council, and

• all who exercise the functions of Council in terms of delegated

authority must subscribe”.

This new requirement is a direct response to the recent lapses that led to a number of institutions to be placed under administration

WHY CODE OF CONDUCT?WHY CODE OF CONDUCT?

• Different homes.

• Different education.

• Different cultures.

• Different interests.

• This is the common way here.

COUNCIL, COUNCIL MEMBERS & CODE OF CONDUCT (s27(7E)) 2011COUNCIL, COUNCIL MEMBERS & CODE OF CONDUCT (s27(7E)) 2011

Code of Conduct regulates:

•expectations and obligations of council members;

conflict of interest, disclosure and associated procedures,

procedure for dealing with alleged breaches and

associated sanctions, amongst other things.

Members receive it at induction and reaffirm annually.

CONFLICT OF INTERESTS CONFLICT OF INTERESTS

• The new requirements of the Companies Act, 2008 has also brought the

debate into the spotlight.

• Council would be well advised to deal appropriately with conflicts of

interest, given that perhaps the most significant protection for councillors,

the business judgement rule, requires councillors to manage conflicts in

accordance with the Act.

• Focus on identifying conflicts, either real or perceived, and also provide

guidance to councillors to assist them in assessing the appropriate

manner of dealing with conflicts as they arise.

WHAT ARE CONFLICTS? WHAT ARE CONFLICTS?

• Conflicts are defined in many ways; however, the basic elements

of any of these definitions is the tension between two or tension between two or

multiple competing interestsmultiple competing interests, be these personal or financial.

• This often manifests in the entanglement of the private and

professional interests of an individual.

• These conflicts may be actual or perceived. The perception of a

conflict is influenced by whether an independent observer might

question whether a director’s professional actions were motivated

or influenced by a potential personal financial gain.

WHAT ARE CONFLICTS? WHAT ARE CONFLICTS?

• Not all conflicts are an indication of an impropriety.

• As King III states, the onus is on individual Councillor to assess

whether he or she is free from apparent or actual conflicts.

• The management of the conflict is a crucial step in dealing

with these issues, and is the responsibility of the individual

director.

• Whilst the Companies Act and King III does address a limited

range of conflicts, Councillors should bear in mind that those

conflicts not covered by the Act may be covered by common

law.

ARE THESE CONFLICTS?ARE THESE CONFLICTS?

• The VC acting as a member of the remuneration, audit or

nomination committees, rather than attending by invitation to

discuss matters other than his or her own remuneration.

• A Council accepting frequent or lavish entertainment or gifts

from a supplier or contractor who has business dealings with

the

University.

• A member of council proposing the appointment of a company

that he or a close family member has a beneficial interest in.

ARE THESE CONFLICTS?ARE THESE CONFLICTS?

• A councillor whose family member is proposed for a position within the

university is present when any aspect of that family member’s

remuneration is discussed.

• Stakeholder representatives who are appointed to council with the

expectation to represent the stakeholder’s interest, not necessarily

the best interest of the university on whose council they serve.

• A councillor whose company has been awarded a tender by the university whilst she was already serving on council.

• A councillor’s son a student at the university failed to write a crucial test that threatens his success in the final exam, he did not write because he went on holiday with his father. The councillor wants to request the lecturer to allow him to write a supplementary.

WHEN CAN CONFLICTS BE MANAGED AND WHEN NOT?WHEN CAN CONFLICTS BE MANAGED AND WHEN NOT?

• King III states that certain conflicts of interest are fundamental and

should be avoided.

• Other conflicts (whether real or perceived) should be disclosed in good

time and in full detail to the board and then appropriately managed.

• In assessing whether the conflict is fundamental and therefore must

be avoided, the councillor considers the pervasiveness of the pervasiveness of the

conflict conflict and the period of time period of time over which the conflict will occur.

This will often involve judgement.

• However, an indicator to consider would be whether the councillor can

continue in his or her current position whilst the conflict still exists.

WHEN CAN CONFLICTS BE MANAGED AND WHEN NOT?WHEN CAN CONFLICTS BE MANAGED AND WHEN NOT?

• The reference to management of the conflict relates to whether the

councillor may continue to operate in his or her current capacity or

whether the councillor should consider terminating the appointment.

• However, there may be circumstances where the conflict can be

managed. This may be the case where the conflict is not as not as

pervasivepervasive, or relates to a decision that is taken only onceonly once.

• It is also important to distinguish between actual conflicts and other perceived conflicts.

• Whether the conflict is considered to be one that may be managed or

not, the relevant disclosures as required must at all times be adhered

to.

ACTING INDEPENDENTLY AND BEING INDEPENDENTACTING INDEPENDENTLY AND BEING INDEPENDENT

• King III states that ‘an independent councillor should be

independent in charactercharacter and judgementjudgement and there should

be no relationships or circumstances which are likely to affect,

or could appear to affect this independence.

• Independence is the absence of undue influence and bias

which can be affected by the intensity of the relationship

between the councillor and the university.

ACTIONS REQUIRED WHERE A PERSONAL FINANCIAL INTEREST EXISTACTIONS REQUIRED WHERE A PERSONAL FINANCIAL INTEREST EXIST

If a councillor has a personal financial interest in respect of a

matter to be considered at a meeting of council, or knows that a

related person has a personal financial interest in the matter,

the councillor —

a)must disclose the interest and its general nature before the

matter is considered at the meeting;

b)must disclose to the meeting any material information relating

to the matter, and known to the councillor;

ACTIONS REQUIRED WHERE A PERSONAL FINANCIAL INTEREST EXISTACTIONS REQUIRED WHERE A PERSONAL FINANCIAL INTEREST EXIST

c) may disclose any observations or pertinent insights relating to

the matter if requested to do so by council;

d) if present at the meeting, discussion must leave the meeting

immediately after making any disclosure contemplated in

paragraph (b) or (c);

e) must not take part in the consideration of the matter, except

to the extent contemplated in paragraphs (b) and (c).

WHAT TO DO WITH CONFLICT THAT ARISES DURING COUNCIL DISCUSSIONWHAT TO DO WITH CONFLICT THAT ARISES DURING COUNCIL DISCUSSION

• The councillor should immediately consider whether the

matter is material, both from his and the university’s

perspective, and request additional time to consider the

matter, if so required.

• Where the councillor then assesses that a conflict does exist,

he or she must declare the interest and take the necessary

steps in the best interest of the university.

THE HOW TO THE HOW TO

Leadership characterized by ethical values of:

• responsibility,

•accountability,

•fairness and,

•transparency

THE HOW TO - THE FIVE GOVERNANCE SINSTHE HOW TO - THE FIVE GOVERNANCE SINS

• Greed – self-interest.

• Fear – self-concern.

• Sloth – imbalance.

• Pride – egg on face.

• Arrogance – the need to be right.

CHARACTER FIRST - CHARACTER FIRST - setting the tone for governancesetting the tone for governance

• Alertness vs Carelessness - Alertness vs Carelessness - Being aware of what is taking place Being aware of what is taking place

around me so I can have the right responses.around me so I can have the right responses.

• Availability vs Self-Centredness - Availability vs Self-Centredness - Making my own schedule and Making my own schedule and

priorities secondary to the wishes of those I serve. priorities secondary to the wishes of those I serve.

• Courageous vs Fearfulness - Confidence that what I have to say or do Courageous vs Fearfulness - Confidence that what I have to say or do

is true, right and just. is true, right and just.

• Decisiveness vs Procrastination - The ability to recognise key factors Decisiveness vs Procrastination - The ability to recognise key factors

and finalise difficult decisions. and finalise difficult decisions.

• Discretion vs Simple-Mindedness - Recognising and avoiding words, Discretion vs Simple-Mindedness - Recognising and avoiding words,

actions and attitudes that could bring undesirable consequences. actions and attitudes that could bring undesirable consequences.

• Honour vs Disrespect - Respecting others because of the their being Honour vs Disrespect - Respecting others because of the their being

and the higher authority they represent. and the higher authority they represent.

CHARACTER-FIRST – setting the tone for governanceCHARACTER-FIRST – setting the tone for governance

• Justice vs Corruption - Taking personal responsibility to uphold what is Justice vs Corruption - Taking personal responsibility to uphold what is

pure, right, and true. pure, right, and true.

• Persuasiveness vs Contentiousness - Persuasiveness vs Contentiousness - Guiding vital truths around Guiding vital truths around

another’s mental roadblocks.another’s mental roadblocks.

• Responsibility vs Unreliability - Knowing and doing what is expected of Responsibility vs Unreliability - Knowing and doing what is expected of

me. me.

• Tolerance vs Prejudice - Acceptance of others as unique expressions of Tolerance vs Prejudice - Acceptance of others as unique expressions of

specific character qualities in varying degrees of maturity.specific character qualities in varying degrees of maturity.

• Truthfulness vs Deception - Earning future trust by accurately reporting Truthfulness vs Deception - Earning future trust by accurately reporting

past facts. past facts.

• Wisdom vs Natural Inclination - Seeing and responding to life situations Wisdom vs Natural Inclination - Seeing and responding to life situations

from a perspective that transcends my current circumstances. from a perspective that transcends my current circumstances.

THE ROLE AND RESPONSIBILITY OF THE CHAIRPERSON OF COUNCILTHE ROLE AND RESPONSIBILITY OF THE CHAIRPERSON OF COUNCIL

• Must ensure that committees and individuals to which responsibility Must ensure that committees and individuals to which responsibility

has been delegated report back appropriately on their discharge of has been delegated report back appropriately on their discharge of

those delegated responsibilities. those delegated responsibilities.

• Should take particular care that all Councillors observe the principles Should take particular care that all Councillors observe the principles

of good behaviour in public life, which embrace selflessness, integrity, of good behaviour in public life, which embrace selflessness, integrity,

objectivity, accountability, openness, honesty and leadership.objectivity, accountability, openness, honesty and leadership.

• To ensure, along with the Vice-Chancellor and others, that the To ensure, along with the Vice-Chancellor and others, that the

institution is well connected and represented with its stakeholders and institution is well connected and represented with its stakeholders and

other external bodies.other external bodies.

THE ROLE AND RESPONSIBILITY OF CHAIRPERSON OF COUNCILTHE ROLE AND RESPONSIBILITY OF CHAIRPERSON OF COUNCIL

• To Stakeholders for the leadership of the Council and To Stakeholders for the leadership of the Council and

ultimately for its effectiveness.ultimately for its effectiveness.

• Promote its well-being and efficient operation, ensuring that Promote its well-being and efficient operation, ensuring that

members work together effectively and have confidence in the members work together effectively and have confidence in the

governance processes laid down.governance processes laid down.

• The Chair is ultimately responsible for ensuring that the The Chair is ultimately responsible for ensuring that the

Council establishes oversight and discusses those issues Council establishes oversight and discusses those issues

which it needs to discuss, and dispatches its responsibilities in which it needs to discuss, and dispatches its responsibilities in

an effective way.an effective way.

“No wrongdoers should be free from the threat of

exposure”

Sir Sydney Kentridge

Steve Biko Memorial Lecture at UCT 2011.

ENKOSI! THANK YOUENKOSI! THANK YOU