strengthening good governance in the public sector antony melck university of pretoria
TRANSCRIPT
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Strengthening Good Governance in the Public Sector
Antony MelckUniversity of Pretoria
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Principles of sound corporate governance
• Presentation based on King III Report • and • Document by PriceWaterhouseCoopers
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Public Sector
• King III written primarily for the Private Sector but its principles apply equally to the Public Sector.
• In the Public Sector much of King III is reflected in:– Public Finance Management Act (PFMA)– Municipal Finance Management Act (MFMA)– Municipal Structures Act– Municipal Systems Act
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Core philosophy• Governance, strategy and sustainability are inseparable• Good governance = effective leadership– Accountability, integrity, service delivery
• Sustainability – nature, society and business are interconnected
• Corporate citizenship– Innovation, fairness and collaboration – Social transformation
• Apply or explain
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Ethical leadership and corporate citizenship
• Ethical effective leadership underpinned by– Responsibility – Accountability– Fairness– Transparency
• Responsible & ethical corporate citizen– Clear and measurable objectives – Commitment to service delivery and stakeholders– Code of conduct
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Role of Boards / Councils
• Custodian of good governance• Acting in best interests of the institution, taking into
account– Financial– Environmental– Social consequences
• Determining direction and policies• Setting clear delegations to committees (charters) and
executives whose performance must be evaluated regularly
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Audit Committee
• Independent audit committee oversees– Integrated reporting (financial and sustainability) – Combined (coordinated) assurance– Internal audit function– Risk management process– External audit process– Performance reporting– Assurance of internal financial controls
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Governance of Risk
• Board/Council responsible for Governance of Risk– Delegation to Audit/Risk Committee
• Process for – identifying– assessing – managing or ameliorating risks
• Assurance with respect to risk management– Risk-based audit plans
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Governance of Information Technology
• Importance of IT in modern institutions– Strategic asset– Significant risks
• Establishing IT governance structure – IT policies– Evaluating major expenditures– Disaster recovery planning– IT risks
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Compliance with legal requirements
• Board/Council must ensure compliance with applicable legal requirements– Compliance policy – Compliance officer
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Internal Audit Function
• Effective internal audit function– Informed by strategy of the organisation– Risk-based approach– Assessment of internal controls – Assessment of risk management
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Stakeholder relationships
• Importance of stakeholder involvement– Integrated Development Plan (IDP)– Community participation– Adequate disclosure– Transparent communication
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Integrated reporting
• Triple context– Economic, social, environmental
• Integrated reporting• Integrity of reporting• Performance reporting against objectives
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Additional aspects
• Alternative dispute resolution– Avoiding protracted and costly court proceedings
– Remuneration of Executives– Transparency
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Tshwane
• Structures and processes in place
• Many processes are new and need to be ‘imbedded’ – become part of the institutional culture
• Importance of ‘tone at the top’ – examples set and standards required by mayoral committee
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