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January | February | March 2018

Governance Can boards minimise their challenges of business risk exposure? NPOs

CHANGING THE RULES OF THE GAME: NEW WAYS OF DOING BUSINESS

HOW TO FUTURE- MANAGING COUNTRY RISK – SHAREHOLDERS, GOVERNING PROOF YOUR left unguarded and ungoverned BODIES AND MANAGEMENT BUSINESS by boards roles and responsibilities B3 Introducing the King IV app

The King IV Report app gives you easy access to the entire King IV Report on Governance in South Africa, 2016 including the sector supplements. Search functionality makes access to governance best practice easier. Also included in the app are the relevant acts, codes and guidelines referred to in King IV as well as historical King reports, namely King I, II and III. No more carrying around text books to know what the roles and responsibilities of governing bodies are. Every person tasked with governance duties should have this app.

Benefits of downloading the App: • Offline access to King IV Report

• Easy navigation through King IV Report

• Interactive key word search

• View and download related legislation, guides and codes as well as historical King reports

• View and download Practice Notes

Android – Only available on the Galaxy Apps store with the pictured icon and not on the Google Play store

IOS – Available on the App Store

Here is a link to the app online (FYI): https://itunes.apple.com/za/app/king-iv-report/ id1145317905?mt=8 3 1 Introducing the King IV app CONTENTS

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The King IV Report app gives you easy access to the entire King IV Report on Governance in South Africa, 2016 including the sector supplements. Search functionality makes access to governance best practice easier. Also included in the app are the relevant acts, codes and guidelines referred to in King IV as well as historical King reports, namely King I, II and III. No more carrying around text books to know what the roles and responsibilities of governing bodies are. Every person tasked with governance duties should have this app.

Benefits of downloading the App: • Offline access to King IV Report

• Easy navigation through King IV Report 42 40 36

• Interactive key word search

• View and download related legislation, guides and codes as well as historical King reports

• View and download Practice Notes

Android – Only available on the Galaxy Apps store with the pictured icon and not on the Google Play store

IOS – Available on the App Store

Here is a link to the app online (FYI): https://itunes.apple.com/za/app/king-iv-report/ 02 From the IoDSA 22 Inclusive (digital) growth 38 Book reviews id1145317905?mt=8 by Angela Cherrington – Local solutions to global 39 Wine: Wines you can trust problems 04 A whole new ball game by Jeremy Sampson by Priya Thakoor by Rodney Weidemann 40 Road Test: Velar sets the pace 24 IoDSA Case Study competition 12 How boards can minimise their by Wynter Murdoch winners business risk exposure 42 Travel: 4 hours in Seoul by Lynette Dicey 30 FAQs: Protection of Personal by Kate Kennedy Information 14 Managing country risk by Parmi Natesan, Tanya Nassif & 44 Insight: 7 Essential habits of by Claude Baissac & Linda de Beer Vikeshni Vandayar successful business owners 16 Future-proofing the by John Jantsch 32 Lessons from the boardroom organisation by Richard Foster by Tasos Calantzis 34 IoDSA Events 18 Non-profit sector governing body challenges by Tanya Nassif 36 Lifestyle: 20 surprising facts about coffee 20 Steinhoff fraud scandal an by Amanda Hawkins accounting irregularity? by Dudu Msomi 37 Lifestyle: 8 awesome ‘coffices’ in Joburg

Publisher: Richard Lendrum Editor: Angela Cherrington Managing Editor: Debbie Bassa [email protected] 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 From the IoDSA

Welcoming in the New Year

rewritten the rules of the experience and knowledge game. that encompass new ways of To this end, the changing thinking and doing things. In facets of the modern world fact, it could be argued that in are having a massive effect this environment, the failure on business. A confluence to innovate and take risks of key areas of impact have could be the biggest risk a fundamentally altered the way company faces. Read more on business needs to be done, the topic in our article on the and the manner in which role of the board to manage individuals need to change to and minimise risk. be relevant and effective in Our article on ‘Managing the challenging times we live country risk – left unguarded Non-Executive Directors in. Today, new approaches are and ungoverned by boards’ Prieur du Plessis (Chairman), being determined and rules investigates the Ntuthuko Bhengu, Sana-Ullah Bray, are being rewritten rapidly election of Cyril Ramaphosa @angelao28 John Burke, Yolan Friedmann, Sathie in terms of everything from as President of the ANC. Gounden, Patrick Kabuya, Pumla stakeholder engagement Ideally, this will signify Radebe, Muhammad Seedat (Lead t is with a degree of to the global economy, and that the end of a decade of independent director), both anticipation and from the political arena, mismanagement and abuse Louisa Stephens. trepidation that the to the rapidly evolving of state resources is near. The business world welcomes technology changes the world turnaround for South Africa, Executive Directors is experiencing, and on to once a promising country I2018. The year that was 2017 Angela Cherrington (Oosthuizen) concluded on a positive the increasing focus on the turned into a disreputable (Chief Executive Officer), Parmi note with the election of environment. laggard, appears tentatively Natesan (Executive: Centre for Cyril Ramaphosa as the new In this climate, there is close. This is the current Corporate Governance). president of the ANC and with perhaps a new role for the consensus in the private that, the hope that South board of directors – a more sector. The sudden rise of the Africa is at last heading for active one in which they are rand to its highest level against Offices able to minimise and manage the dollar since mid-2015 greater political stability, National Office the exposure to business for testifies to this. economic growth, and an end [email protected] the organisations on which But is such optimism to crippling corruption and (011) 035 3000 they serve. warranted? state capture. www.iodsa.co.za Our theme for the first In fact, overseeing risk is Finally, in our piece quarter’s issue of Directorship is one of the most fundamental on ‘Future-proofing the Western Cape Branch ‘A new way of doing business’ duties of the board. And while organisation’, Tasos Calantzis, [email protected] and as such, we have included the risks CEO, of SuperUltra talks (021) 715 3757 a host of interesting articles faced may differ from about how the long-term on the topic, all of which in company to company, sustainability of most some way relate to different common potential risk factors businesses depends on a KwaZulu-Natal Branch ways of thinking – rather apt can include anything from continued ability of the [email protected] as we commence a new year cyber security, resignations, organisation to adapt to 082 495 9596 of work. product faults, and recalls change. The increased rate Our first feature article, ‘A to bribery, corruption and of change in consumer Connect with the IoDSA on whole new ball game’ delves environmental threats. demands, technology, working social media into the ways in which the Moreover, in a business environment, regulation and shifting sands of politics, environment where there is competitive landscape makes Institute of Directors in Southern Africa economics, technology and a greater call for innovation this adaptability as important the environment all impact on than ever before, it is starting as good management and @The_IoDSA #DirectorshipMag how business is done. In the to fall to directors to manage good citizenship. past two years, these key areas the risks associated with www.facebook.com/ TheIoDSA/ have changed so significantly business innovation – and Angela Cherrington that they have effectively what’s more have the relevant Chief Executive Officer 3

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Better directors. Better boards. Better business www.iodsa.co.za Business 4

A whole new ball game Rodney Weidemann

The shifting sands of politics, economics, technology and the environment all impact upon how business is done. In the past two years, these key areas have changed so significantly that they have effectively rewritten the rules of the game. 5

he changing facets of the modern to ensure minimal disruption to social into account, she continues, is that China world are having a massive cohesion and nation building,” she says. is on the rise, and some economists even effect on business. A confluence “The other announcement that recently predict that it has (or will soon) take over of key areas of impact have caused some consternation was President from the US. One thing that is clear is Tfundamentally altered the way business Jacob Zuma’s free higher education that China is now on the centre stage and needs to be done, and the manner in which initiative. This may also cause problems, cannot be ignored by business. individuals need to change to be relevant by plunging the country more deeply Looking at the local environment, and effective in the challenging times we into financial crisis if it isn’t adjusted one it is clear we have many issues around live in. way or another. Looking at these recent corruption, state capture and collusion, all Today, new approaches are being announcements, it becomes obvious that of which impact on business. determined and rules are being rewritten organisations need to clearly understand “When it comes to issues like these, it rapidly in terms of everything from the policy implications for their business is incumbent upon business to conduct stakeholder engagement to the global and vertical market, and what impact its affairs in an ethical manner, and it is economy and from the political arena, to these changes may have.” imperative that organisations practise the rapidly evolving technology changes Although it is very important to be able good governance. Proximity and close the world is experiencing, and on to the to adjust to the changing times, adds relationships with relevant political figures increasing focus on the environment. Khaba, businesses that are operating in may be good for business, but these should SA and the continent at large need to be be highly regulated and must always stay Playing politics sensitive and take into account the socio- within ethical boundaries, lest you end From a political perspective, there has economic, political and trade impact of up with a Gupta or Steinhoff scenario been a major shift in the status quo both the countries in Africa. For instance, the occurring,” states Khaba. globally and locally in recent times. We intense use of technology in the market Khaba points out that there is some have seen the election of Donald Trump may benefit some western countries. good news, following the election of Cyril as US president, UK citizens voting for However, it will most likely have a negative Ramaphosa as the new ANC leader, as he Brexit and the recent shift in local political impact on job creation in South Africa, so seems to be a refined individual, one who power at the ANC elective conference. finding a good balance between advancing has extensive experience in business. With such significant changes occurring technologically, while still meeting the “This could be positive in that it boosts in the political arena, the ability for needs of the poor is critical, given the investor confidence, although my concern businesses and individuals to adjust to the socio-economic prospects of SA. remains that he may be an individual new rules with flexibility, and by taking “I am of the view that business also who has lost touch with the grassroots proactive steps, is essential. needs to assist government in meeting communities, meaning he may be less According to Busisiwe Khaba, a its targets by doing all it can to facilitate inclined to advance the interests of the political analyst at Monash South the absorption of unemployed graduates. poor. He will certainly need to assert Africa, the ANC took some rather radical This will assist to alleviate poverty in South himself and get in touch once again so to decisions in terms of policy outlook at Africa.” advance the interests of all South Africa’s the recent conference. A good example “Looking further afield, the US is still a citizens and not just business.” was the proposal that was adopted prominent role player due to its economic “Obviously his win was not with an relating to ‘land expropriation without ‘muscle’ and global political control. The outright majority, which indicates that compensation’. concern is that President Trump is most there are some intraparty politics and “It will be interesting to see how this likely going to introduce radical policies, negotiations he will still have to undertake. will impact on the social cohesion and which may negatively impact on trade. The biggest concern for business here race divide in South Africa, given that In addition, the increasing resistance is that such party-political challenges most of the land is still owned by the towards refugees in the US and many may detract from the critical need to white minority. Should this policy be other Western countries will mean more transform South Africa’s ailing economy. It adopted, it may alter race relations in intensified border control. This will, in turn, is for this reason that it is imperative that South Africa. It will also be incumbent hamper the growth of businesses that business focuses on working closely with upon government to ensure that the roll- trade globally.” government over the next few months, to out is systematic and planned, in order The other thing businesses need to take maintain the focus needed to achieve this.”

"I am of the view that business also needs to assist government in meeting its targets by doing all it can to facilitate the absorption of unemployed graduates. This will assist to alleviate poverty in South Africa." Business 6

Money, money, money “Locally, South Africa has never really ‘demographic dividend’ in the next Speaking of the economy, the global recovered from the global financial crisis, few decades – where the working age economy still feels the reverberations of partly due to a subsequent commodity population exceeds the dependent the financial crisis of 2008, which – in turn price slow-down, partly due to indecisive portion of the population – as Africa has – impacts upon businesses and the rules policy formation, and partly due to inertia the largest proportion of young people they play by. in implementing policy. As an example, in the world. This means it also stands to Schalk Barnard, Africa Markets and the mining sector is considerably smaller benefit from the fact that the rest of the Business Development Director at EY, than it was prior to the global financial world’s population is maturing. But in points out that the most significant shift crisis, and this has had a major impact on order to do so, it will need to invest heavily in a post global financial crisis world is the increasing the unemployment rate.” in education and skills training in areas fundamentally greater regulation of the On the other hand, adds Barnard, where jobs will be created. That means a financial services sector. ‘Too big to fail’ China’s role has been very beneficial to the strong focus on the digital economy and its became a common theme immediately world economy. As much as it has played technology components.” after the crisis, as governments were the role of being the world’s factory, it has Up until now, Africa’s real economic eager to prevent a similar systemic risk also been a major importer – especially of challenge has been its inability to improve from developing. This has pressured the commodities, as its insatiable demand for productivity levels, with too many financial services sector’s ability to provide new cities to house its rapidly urbanising still people dependent on subsistence liquidity and credit, as banks restructured population has demanded. Commodity agriculture. So in order to benefit from themselves appropriately for a new world exporters have therefore benefited tomorrow’s technologies, the continent order. extraordinarily from this need, including will require an upfront change in the “Only recently have banks re-opened South Africa, Brazil, Australia and all of the agriculture/agri-processing sector. the credit taps, and this is now fostering oil exporting countries. More people need to shift from primary stronger growth on the whole. There are Looking ahead, he says that from a agriculture towards secondary and tertiary still concerns about whether regulation business perspective, companies need to activity. is now sufficient to allow the financial recognise that Africa has an opportunity to Asked about the best means of system to endure a further shock,” he become the world’s manufacturing hub. addressing inequality, Barnard says that states. “The continent will benefit from the this is through poverty reduction, which is in turn best addressed via creating employment opportunities. “Most of the Asia-Pacific region has seen falling income inequality levels, as greater numbers of people join the labour force. As a result, governments that have had most success in reducing inequality have focused on business-friendly policies, reducing red-tape, providing tax incentives – especially for employees – and creating an environment that attracts capital. “From a business perspective, enterprises need to be aware that the economy of the future is going to be dominated by the Fourth Industrial Revolution. This digital revolution will be driven by a shift towards digitalisation, robotics and connectivity,” he adds. That means that skill requirements are going to be entirely different to the past. Many current jobs will fall away, and a recently quoted statistic has it that Growth through globalisation more than 50% of new jobs that will flow Globalisation has had an incredible impact on growth. It has allowed the developed from this new era have, in fact, yet to be world to move away from being the world’s manufacturer, instead becoming a provider created. of high-end technical services and consulting. Manufacturing has largely moved to “Nonetheless, we have already seen China and other parts of Asia-Pacific. That, in turn, has provided major cost advantages some of the types of opportunities that to western consumers, as the price of labour is considerably lower in the emerging will be created by the new information economies, allowing cheaper goods that stimulate growth. On the whole, this has been age, such as those digital technology start- quite successful, as it lowers the cost of products overall. But there are complications, ups that are changing the way consumers most noticeably in agriculture, where countries tend to get protectionist and go access finance, healthcare, do their overboard in attempting to protect their home-grown agriculture markets. shopping and make payments. Data and 7

technology skills will become increasingly “For example, a key component of Remaining successful in a digital future critical, and being connected to the digital business differentiation today is customer world will become essential.” experience. Thus, those enterprises that There are several technology evolutions “Finally, it is worth noting that in this are not using technology to facilitate that organisations will need to adopt digital revolution, any and all rules may greater efficiencies internally or externally, and run with if they are to remain at change. Even simple things that have been or to reduce cost and simplify, will soon the forefront of their chosen industry, around for many centuries, like currency, find themselves behind those that do whatever vertical market they operate may become extinct in the near future, as choose to embrace technology,” he in. digitally encrypted currencies like Bitcoin suggests. begin to play an increasing role in the “Technology also enables you to scale The first technology they must consider payments space.” very quickly. If you’re not using technology is mobile. Today, everything is accessible to help yourself reach the customer better, via mobile, and organisations must Digital disruption changes the game you are also missing out on the ability to therefore ensure that everything they do has a mobile-centric view. Everything The digital revolution is something scale and introduce efficiencies in your that can be done via mobile, should be. that is already impacting on the world organisation and you’re not opening significantly, not only in terms of yourself up to new market opportunities.” From a corporate perspective, other key dominating the economy of the future, but Walker points to a major local online technologies are cloud and analytics. also in respect of how it will change how retailer and its Black Friday sale as an Once they have those basic technologies business is done, how senior executives example. He says that it had its best sales in place, they must look at what will approach the market, and how new ever on that day, with a 280% increase in accelerators can be used on top of that, and unexpected competitors will arise to site visits, generating R87 million in gross which might include the likes of artificial challenge established enterprises. merchandising value on the day. That intelligence and the Internet of Things. Mark Walker, Associate Vice-President tells the retailer that customer experience Wrapped around all of this is a very for sub-Saharan Africa at International and knowledge that you can transact strong security layer. Many companies Data Corporation (IDC), suggests that with them online, plus the convenience are now reconsidering how much data those who do not change their business as factor, are all very important factors now, they keep and how they retire their data, the technology itself evolves will put their and people are adopting this channel because the more data they keep, the companies in significant danger of being aggressively.” higher their risk, unless they secure that excluded from the mainstream of business. Clearly, in the consumer retail data very well. Business 8

environment, the rate of adoption of “The question is, how do they do that? fore over the last decade, and the need to online business is spiralling upward, There are two aspects here. One is to look find environmentally friendly approaches continues Walker. Of course, if companies at how they can improve their existing to everything from power generation, don’t live up to their promises, they can bricks and mortar operations through the to manufacturing, to logistics, has had a also do themselves huge damage. As wise use of technology, in order to enable major impact on the way business is done. online becomes prevalent, companies that them to manage costs better, get real-time Jayne Mammatt, partner in charge of are not servicing their clients properly will reporting, manage stock and inventory sustainability and climate change at PwC, be punished for it, he says. better, and become more efficient.” indicates that when it comes to being “Remember that bad news travels fast, “At the same time, they must look environmentally conscious, businesses can and if you’re not servicing your customer, forward and ensure they are positioned be a lot more innovative in respect of how you can do tremendous damage to your for the future, by digitising their business they approach this. company. Yet if you use technology to and making themselves more efficient and “By developing new solutions, services its full potential, you can maximise your customer-centric. They need to look at or products, or by revising the way existing customer experience, increase your how they structure their digital strategy ones are manufactured or delivered, or customer reach, and at the same time for the company and how they can even by looking to create new markets for improve your internal processes and innovate new digitally-based products and what you do, you can reduce the negative manage costs more effectively.” monetise information. Many organisations impact you have on the environment. Walker says that technology, perhaps are sitting on vast amounts of information Moreover, by doing something like more than any other thing, is causing the about their customers - including things attempting to reduce the amount of waste old business rules to be altered, pointing like buying trends, preferences and a process produces, you can positively to companies like Uber and Airbnb, which spending habits – and they need to apply impact your costs, as such an approach have quite literally torn up the old rulebook that information internally to provide a means you are inevitably driving greater in respect of how business should be better service to their customers.” efficiencies within your business,” she says. conducted. One thing that is worth remembering, “Implementing renewable energy “These companies are not saying we’ll he adds, is that with the complexity of sources is another way of going ‘green’. build a better mousetrap and customers technology, it is critical to have a very For some time, there has been a view that will come. They’re turning that model good understanding thereof, and how such an investment is costly to a business, on its head and focusing on what the this impacts on the business. A C-level but as these technologies – like solar, customer wants. They are also not just executive, possibly along the lines of a for example – continue to develop, so looking at physical or virtual products, Chief Digital Officer (CDO), is a very good the return on investment (ROI) happens but rather focusing on what friction exists idea. Such a person must have very strong increasingly quickly. Perhaps most in getting the goods or service to the executive abilities, commercial influence importantly, investment in sustainable customer. Then they focus on lessening or and strong C-level relationships within the solutions is no longer merely a ‘nice to have’ removing that friction in some way.” organisation, as well as with across others - it is rapidly becoming a fundamental “Uber, for example, takes the friction in industry. approach to business success.” and uncertainty out of the transaction “For a CDO, either a strong operations She suggests that there is a growing of getting transport, creates reliability, or marketing background is ideal, and realisation that the circular economy is the and makes it easy for people to use. They they must have a very strong grasp of the way forward. Such an approach focuses focus on what the customer wants and mechanics of their organisation – from on the idea of taking the environment how they can reduce the friction to get the production, right through to customer and your impact on it into consideration, goods or the service to the customer in the delivery, and be able to identify where and working to reduce this impact while simplest manner and at the best price.” technology can make a difference. Then, creating increasing business value. He says that the new rules of the game in using the areas that can be improved by A good example here would be those are having a significant impact on those technology, they must be able to devise organisations whose operations create organisations that have entrenched a coherent strategy that they then drive organic waste, and who then use this infrastructure and legacy systems. While within the organisation, so that all these waste to generate electricity. these systems still serve a purpose, Walker fronts are covered,” states Walker. “In South Africa, of course, we have to suggests that at the same time, businesses consider the impact that moving from must be mindful of what the future holds, When nature calls coal-fired power to renewables may have and position themselves to take advantage Concern and care for the environment is on employment, but the reality is that of that. something that has really come to the while such a move may result in certain "By developing new solutions, services or products, or by revising the way existing ones are manufactured or delivered, or even by looking to create new markets for what you do, you can reduce the negative impact you have on the environment." 9

“When it comes to environmental responsibility, we are definitely starting to witness genuine change, as people can now visibly see the damage that is occurring and are thus more eager to prevent things getting further out of hand. There are also a lot of businesses doing good things, but there is no doubt that we always need more. While it is understood that humans will always have an impact on the environment, the focus must be on minimising this, as well as restoring and replenishing what we do destroy.” “From a business perspective, I think what will have an enormously positive impact moving forward will be for us to see more shareholder and investor activism around environmental issues. It is vital that investors look to the long term and ask the right questions about the company’s environmental strategy, as this will play a big role in helping to determine the organisation’s behaviour moving forward and ultimately its long term viability.

Engaging in a deeper fashion In today’s business world, stakeholder engagement is critically important, says Reana Rossouw, Director at Next skills becoming redundant, it also opens companies need to first understand Generation Consultants, a business up new opportunities for re-skilling. What what impact their business has on the that focuses on the social innovation, we need is for organisations and society to environment - in other words what it investment and development sectors on respond to these changing requirements uses, creates and destroys in the process the continent. by viewing such change as an opportunity of doing business – and this needs to be “Simply put, business is part of the to deliver training and skills to workers across its whole value chain. ecosystem that they operate in, meaning from outdated operations, like coal. In “Once this is known, one can begin they can no longer make decisions that this way, they will be able to assist them to create a circular economy from the affect clients, suppliers and employees, to become productive workers in the new, start, designing new products from without first consulting them. The environmentally friendly and low-carbon the outset to be more easily recycled or day has come and gone where merely economy.” reused. Collateral to this is ensuring the pushing information to their stakeholders The development of low-carbon organisation is aware of things like the would suffice. And to prove the point, economies, adds Mammatt, is critical in carbon it produces and the water it uses stakeholders are letting businesses know today’s world, where reducing carbon is or pollutes. Such understanding should that they are not happy with simply being not just important, but is likely critical to lead directly to improvements in the value informed, that they instead want to be humanity’s long-term survival. chain and changes in business processes consulted on issues that affect them, “It is about fundamentally changing that will ultimately be beneficial to both that have an impact on their lives and the way we do and consume things, in the environment and the company making livelihoods, and they want to be part of order for us and the planet to survive. the changes.” a process where their input is considered While many businesses realise that the The final aspect of the change is to look and taken into account,” she says. new rules of the game demand a focus on to the future of the business, and consider “This is not just merely my opinion. It environmental sustainability, those that how it will evolve moving forward. For is supported by numerous guidelines, don’t will soon find their costs increasing example, the enterprise may currently standards, frameworks and governance and their competitiveness dwindling. produce a specific product, but the plan and reporting requirements. Consider Moreover, as consumers become more may be to evolve to delivering services King IV, the Companies Act, industry environmentally aware, they will stop instead. If you are aware of where you specifications such as the International buying products from, or working with, want to be in five, ten or even twenty Council for Metals and Mining (ICMM) or those organisations that fail to change years, says Mammatt, you can work your the Forest Stewardship Council (FSC) to their approach to this subject.” sustainability blueprint into this future name a few. You cannot become a member To undertake such change, she explains, plan from the outset. of any of these organisations if you have Business 10

"To deal with this new world, enterprises need to ensure they have organisation-wide crisis communication teams, which must include senior executives who are dedicated to engagement." not conducted stakeholder engagements.” to overcome on their way to ensuring capacitated, under-qualified and under- In addition, points out Rossouw, effective stakeholder engagement. skilled.” one cannot produce a sustainability For example, explains Rossouw, many So what are the key areas that or integrated report without having companies today are completely under- organisations should focus on to ensure consulted one’s stakeholders. In fact, resourced when it comes to dealing with stakeholder engagement is successful? she says, stakeholders decide what your social media backlash. A lot of companies Rossouw points to three areas: the first most material issues are – as opposed do not understand the immediacy of social is the consideration of the human rights to the companies themselves – and media, and the rapid impact that it can aspect. Such ‘rights holders’ - as opposed to you have to report on how you have have on a business if it is not dealt with ‘stakeholders’ - bring a whole new level of considered their reasonable expectations equally rapidly and at scale. consciousness and need to be very quickly and have responded to their requests and “Businesses are completely unaware and very seriously integrated in successful expectations. and unprepared to deal with criticism, engagement strategies. “In South Africa, it is in fact a governance crises, and levels of engagement, as “Another new aspect that needs requirement to do this, hence the advent well as the detail and response that is to be considered is the concept of of the social and ethics committee that usually required. Companies completely ‘inclusiveness’, which encompasses must take responsibility for stakeholder underestimate the level of engagement inclusive development, inclusive products engagement. The ‘rules’ of stakeholder that is happening about them and around and inclusive services. This means you engagement do, of course, differ according them. have to ensure the inclusiveness of those to industry and geographic position. “To deal with this new world, enterprises stakeholders for whom you develop, This is especially true in Africa, where we need to ensure they have organisation- market, and sell products. Finally, there have unique challenges for engagement, wide crisis communication teams, is only one way a company can know if including language, literacy and cultural which must include senior executives its engagement is successful, and that diversity. Also, unlike in other parts of the who are dedicated to engagement. is if its stakeholders tell it so. Therefore world, we cannot always use technology- Too many organisations currently have stakeholder perception surveys are based engagement platforms and tools, such engagement siloed according to critical to understanding whether any like electronic surveys,” she adds. department, and delegated to mid- given stakeholder engagement can “In heavily regulated industries – level executives. This leaves the team be determined to be a success,” she like mining – engagement is often as unprepared, uncoordinated, under- concludes. important as profit. Remember, you cannot even get a licence to operate until you have engaged and can provide evidence thereof, as it is an industry Key strategies to ensure successful stakeholder engagement requirement.” • Recognise and commit to engagement using clearly defined company policies, aligned The same goes for high-impact to global standards, and articulated in a way that makes sense to internal structures industries like oil and gas, she points • Understand who your stakeholders are out, stating that engagement is directly • Know how your operations impact and affect stakeholders, and in what way linked to your impact on society and the • Identify the stakeholders and understand their characteristics environment. Again, this industry has a • Not all stakeholders are equal, so you need to clearly analyse and prioritise specific standard for engagement. stakeholders • Dissect stakeholders and link this knowledge to internal operations “Consider companies operating across • Have clearly developed processes and systems for engagement different countries – these multinationals • Conduct engagement regularly, and keep documentation of engagement input, have to adhere to the OECD guidelines commitments, and promises to ensure follow up and follow through for companies operating in emerging • Provide opportunities and channels for grievances and complaints and mitigation markets, and it is very clear how processes to respond to these indigenous stakeholder voices needs to be • Communicate and report on stakeholder engagement incorporated in company strategies.” • Make stakeholder engagement part of the deliverables and KPIs of executives Of course, in today’s world, faced with • Be very aware of the difference between information dissemination, communication, challenges like digital disruption, 'fake dialogue and engagement. The latter is a proactive process that allows for proper news' and social media backlash, there dialogue and offers the opportunity for stakeholders to respond – a town hall meeting are many new issues businesses have or open day is not true engagement Transformation 11

Digital transformation at IoDSA

In line with the IoDSA’s strategic objectives of building a credible and visible brand, the IoDSA is dedicating the year 2018 to digital transformation.

he IoDSA values innovation corporate governance. reading about the latest hot business throughout the business as we We are excited to announce that and governance topics on your chosen understand flexibility is crucial innovation will take place in these exciting digital device with ease and at any time in today’s times of advanced areas: at any place. Imagine carrying your Tand disruptive technologies. We have • Website: An upgraded and pleasant Directorship magazine in your pocket recognised that digital congruence will website for your ease of use. Use it (digital device) and being able to read it allow us to better serve our member on your PC/laptop or mobile. Enjoy anywhere you go. base. This transformation coincides navigating our new online platform. The • Directors’ Channel: Expect a facelift with with our expanding role in the regions new website will boast a clean design, new and exciting content that is relevant as a recognised authority in promoting intuitive and consistent navigation to you. corporate governance. system. • King IV App: Now available in all app stores: The IoDSA has always been an • A mobile app: For members. View and Google Play, App Store, and Galaxy Apps. innovative brand – moving with the times. update your profile with ease. Get The King IV Report app gives you easy We have realised that digital congruence is notifications on the latest events and access to the entire King IV Report. No the crux to better serving our member base programmes. You can also keep your more carrying around text books to and the world of corporate governance CPD in check. know what the roles and responsibilities as a whole. This transformation coincides • Online Directorship magazine: This is also of governing bodies are. Every person with our expanding role in the region in line with our green initiative to tasked with governance duties should as a recognised authority in promoting reduce our ecological footprint. Enjoy have this app.

2018 will be an exciting year, one where we plan to use our digital strategy to create… Better directors; Better boards and Better business. Risk management 12

How boards can minimise their business risk exposure Lynette Dicey

One of the most important duties of a board of directors is overseeing company risk. And while the risks faced may differ from company to company, common potential risk factors can include anything from cyber security, resignations, product faults and recalls to bribery, corruption and environmental threats.

he Wall Street Journal recently planning. Of course, there is also a vital social responsibility, management quality, published an interview quoting space for board members in times of crisis marketing and sales effectiveness, T Nicole Sandford, manager at Deloitte or market instability, when they will be innovativeness and quality of products and and Touche LLP, on the role of board called on to help the company weather the services.” members and their approach to risk. storm. She adds that with the marketplace Sandford says boards are increasingly The board is also ultimately responsible being exposed to so much more being scrutinised by stakeholders – from for the reputation of the company. “The information, transparency is becoming shareholders, regulators and analysts, to board has an obligation to ensure that the that much more important. Bearing this the media. As such, board members and reputation of the organisation is intact at in mind, she says it’s imperative that board executive management need to work all times,” insists Janine Hills, CEO of Vuma members are educated and upskilled so closely to identify risks and agree on how Reputation Management. “And when we that they have a holistic view of reputation to approach them. say reputation, that doesn’t mean only management and why it’s becoming more While many boards play more of an focusing on the financials or bottom line, important. “Gone are the days when you oversight role, there are times when but all nine dimensions of reputation could sweep things under the carpet. directors are required to play a more management including employer Both the marketplace and shareholders active part in the business in areas such attractiveness, business performance, are calling for greater transparency and as strategic direction and CEO succession ethical business practice, transparency, disclosure,” says Hills. 13

"The rebuilding of a reputation can only happen if genuine and authentic changes are made. It needs to start with the replacement of leadership and a thorough review of the board to determine why the values and governance structures were compromised in the first place. "

There’s a direct correlation between with the board chairman, advises Hills. an organisation’s reputation and its “If Steinhoff, Eskom, KPMG or McKinsey bottom line, points out Regine le Roux, had invested in reputation research, issues MD of Reputation Matters, adding that would have been flagged and could have people don’t want to be associated with been investigated and dealt with much companies with poor reputations. “People sooner,” says Le Roux. want to do business with companies they In the current environment, the success trust and that have good reputations,” she of an organisation is largely determined says. by its ability to deal with the risks it faces. What does that mean for companies Culture has an important role to play in such as Steinhoff, Eskom, KPMG and the risk process – employees typically Janine Hill McKinsey, that have all seen their act in accordance with the behaviours reputation in tatters in recent months? they’re rewarded for. Board members Reputations can only be salvaged, set the tone for risk, the organisation’s says Le Roux, if considerable remedial adherence to good corporate governance, actions are taken, and even so it will take and in establishing a culture of honesty years to recuperate and reinstate trust and transparency. At the same time, from stakeholders. “The rebuilding of a however, they need to create a culture reputation can only happen if genuine and where employees are encouraged to take authentic changes are made. It needs to intelligent risks and are acknowledged or start with the replacement of leadership rewarded for doing so. and a thorough review of the board to According to an article in the Harvard determine why the values and governance Business Review, co-written by Linda A. structures were compromised in the first Hill and George Davis, many boards are Regine le Roux place.” calling for a more innovative approach to Stakeholders, she adds, need to be business. That said, with innovation comes reassured that this won’t happen again, risk, necessitating boards and senior and how they will be protected going management to work more closely than how Buffet believes that board members forward. Actions and active engagement ever before. should have their ‘own skin in the game’ if needs to be a key priority. It’s a relatively new approach for board they are to effectively identify and manage It takes time, money and energy to members – they need to embrace risk, yet risk. salvage a brand’s reputation, agrees Hills. at the same time, manage and mitigate Buffet challenges directors to be An ethical mindset has to be integrated as much as they can. This can be seen as independent thinkers and to challenge into all levels of the organisation, and then an ‘inverted risk paradigm’ where boards CEOs when they are not acting in the best monitored and measured. face the fact that avoiding risk can be the interests of the business, or acting in a way Board members who suspect that riskiest behaviour of all, the article states. that is foolhardy. This kind of independence the business is at risk as a result of Ultimately, board members need to have is not always easy to find, and is certainly questionable or unethical business sufficient industry experience and relevant more common in directors who have a practices need to raise these issues in the expertise around innovation, underpinned vested interest in the organisation. Audit and Risk committee, advises Hills, by sound knowledge of corporate Berkshire Hathaway board members all as well as in management and board governance and a holistic view of own company shares, which means that meetings. “It’s important that these issues reputation management in order for them should a crisis occur, board members stand are raised, minuted, and that there is a to be sufficiently equipped to make sound to lose as much as any other stakeholder paper trail.” risk assessments on business proposals. in the business. Buffet calls this approach It’s equally important to ensure that Perhaps one of the most pertinent ‘owner capitalism’. there are corporate governance policies in comments on boards and their role in the In an environment where the board itself place and that training is provided around risk management of organisations was is very often the custodian of the wealth corporate governance. Board members made by Warren Buffet, CEO of Berkshire of its stakeholders, is an owner capitalism who suspect corporate governance rules Hathaway. In an article posted on approach perhaps the best insurance are being flouted need to raise the red flag BizNews.com by Alec Hogg, Hogg talks of against risk? Risk 14

Managing country risk – left unguarded and ungoverned by boards Claude Baissac & Linda de Beer

The election of Cyril Ramaphosa as President of the ANC signifies that the end of a decade of mismanagement and abuse of state resources is near. The turnaround for South Africa, once a promising country turned disreputable laggard, appears tentatively close. This is the current consensus in the private sector. The sudden rise of the rand to its highest level against since mid-2015 testifies to this. But is such optimism warranted?

he rand rally is not based on facts but of the ANC conference. And in corporate emanate from the triple context in which on an expectation of a turnaround. governance, uncertainty equates rising risk. the company operates and the capitals T To a critical eye, this expectation has For boards and executive management, (natural, environment, manufactured, attached itself to a marker of possible this is clearly no time to relax. Given financial, social and relationship, change, not to change itself. Change this, the optimism is puzzling because it intellectual and human) that the has yet to occur, and the actual scope represents in itself a potentially significant company uses and affects. and timing of that change is unclear, source of risk that adds itself to the risk • To this effect, the board should consider and may remain so for a while. Factual born by the uncertainty. External risk an assessment of the company’s analysis shows an arithmetically divided unchecked by adequate internal risk dependence on resources and ANC leadership structure, the likely management processes rooted in a relationships as represented by the outcome of factional engineering rather committed leadership raises the spectre of various forms of capital. than internal democracy. It shows two governance failure. • The board should set the company’s powerful factions engaged in a crafty King IV Principle 11 states that, ‘The risk appetite, thus its propensity to take battle of influence with uncertain governing body should govern risk in a way appropriate levels of risk. outcomes. It shows President Jacob that supports the organisation in setting • On this basis, the board should consider Zuma as an embattled but still powerful and achieving its strategic objectives.’ King and approve the limit of potential loss head of captured institutions filled with identifies key practices toward this that that the organisation has capacity to people who have much to lose from his directly relate to country risk: tolerate. departure. To sum up: factual analysis shows a rise • The board should exercise ongoing Examples abound of South African in uncertainty as the dominant outcome oversight of risks and opportunities that companies that endeavoured into other 15

countries – on the African continent, in itself without the requisite means but Yet, country risk is a clearly defined Australia, in Asia – and failed to achieve with the obligation to manage country phenomenon measurable at aggregate stated strategy, in part because they risk. It has undoubtedly contributed to (national, sectoral) and individual (local, did not have a full understanding of the significant mistakes arisen from a lack company) levels. Tremendous progress has political environment, the legislative of country risk management principles, occurred in developing the foundations of framework, or unique difficulties and risks board guidance and dedicated resources. country risk management. It is now ready of doing business there. It has likely contributed to the implication to become a distinct practice, undergirded Too often the assessment of country risk of many companies in political corruption by sophisticated tools bringing together remains limited to the impact on financial (through for instance opportunity political science, economics, strategy and capital: how the risk can affect the income funding of political parties, BEE deals corporate risk management. statement. Other critical capitals, such as with politically connected persons, and Here South Africa has a distinct employees, reputation or assets such as tenderpreneurship) and the state capture advantage, given the sophistication of social and natural capital tend to be left scandal. Finally, it has certainly played a its corporate governance framework and out or be perfunctorily considered through role of a broader set of governance failures its rising country risk. This juxtaposition superficial, tick-box due diligence. This caused by the declining quality of key creates both a requirement for improved leads to an over-emphasis on opportunity, institutions of economic governance – country risk management and an and therefore risks translating into a pro- line government functions, regulators, opportunity to developing a unique set investment bias. With that comes a higher collective institutions, etc. of skills and methodologies which could likelihood of country risk-related problems, provide competitive advantage at home potentially serious and costly. This is The current wave of optimism about and abroad, as country risk is on the rise particularly the case with investment South Africa’s political future and its globally. in jurisdictions with high country risk – implications for business is a concerning The time is now. more likely than not where South African indicator that the lessons of the past companies will invest. have not been adequately incorporated: Inadequate country risk governance • First, it demonstrates that the Claude Baissac is a decreases the prospect of delivering on understanding of the nature of specialist in strategy, strategy. It also heightens the likelihood country risk remains superficially risk management and of serious governance failure. South Africa attached to the notion of political economic policy. He is offers a case in point. The procedures, actors and personalities instead of the CEO of Eunomix, a consultancy pioneer in but also the understanding and skills, that of political, economic and social developing the methods have been lacking. Most boards took far systems with structural attributes and practice of country too long to adequately understand and that condition business in the long term. There is a bias toward reducing risk management. He prepare for the predictable decline in works as a development country risk to the quality of the the political and economic performance economist with the African Development Bank, country’s political leadership. This bias that started circa 2007, accelerated after the World Bank and the United Nations. 2011, and turned into full blown crisis in is inherently dangerous. 2015. Instead, they initially sought to buy • Secondly, it shows that country Linda de Beer is a political risk insurance through (in the risk management remains to be Chartered Accountant worst cases) cronyism or (in the best cases) properly adopted as a fully-fledged (SA), Chartered Director insulate their South African operations constituent of corporate governance, (SA) and a member of from their international ones. Following rooted in proper principles and the King Committee. Nenegate, many got directly involved in rules, undergirded by professional She serves as an independent director politics, a decision high in risks. capabilities and sufficient resources on a number of boards Overall the lack in country risk and effective decision-making. Since and provides corporate governance has undoubtedly contributed the focus tends to be on the country’s political leadership, country risk governance advice to to the aggregate poor performance of numerous companies, both in South Africa and beyond financial risk management the South African private sector and its Namibia. lower attractiveness to investors. It has is understood as mainly a matter also led to a de facto abdication of this of relationship. This is inherently responsibility to executive management, dangerous.

"Inadequate country risk governance decreases the prospect of delivering on strategy. It also heightens the likelihood of serious governance failure." Sustainability 16

Future-proofing the organisation Tasos Calantzis, CEO, SuperUltra

The long-term sustainability of most businesses depends on a continued ability of the organisation to adapt to change. The increased rate of change in consumer demands, technology, working environment, regulation and competitive landscape makes this adaptability as important as good management and good citizenship. 17

“Many of today’s business leaders are aware of the need for adaptability but have insufficient tools, learning and experience for building adaptable systems."

oger Martin, currently the world’s of its 300 000 employees in design. It has ramping up. Well-proven processes like most influential business thinker, embraced design, open collaboration and Design Thinking are the infrastructure of R writes in his 2009 book, The ‘radical transparency’ in order to ‘solve real adaptability. Design of Business, that most businesses problems for real people’. The lesson is prioritise reliability – the ability to create clear: adaptability requires hiring diverse Use the right measures consistent results. This is obviously thinkers, giving them autonomy and The right measure of agility is, of necessity valuable, but when applied across the getting out of their way. a financial measure. More specifically, a entire organisation, can make maintaining financial measure must be created for the the status quo an end in itself. This is the Encourage the right thinking rate of change. Depending on the goal, opposite of adaptability. Martin suggests Warren Buffet’s business partner, Charlie that could be the percentage of revenue that businesses create a welcoming Munger offers sage advice: you make from new products, processes, territories environment for validity – the ability to better decisions in business and in life if or customers. These are useful, but they meet the right objective. This is the true you find and understand the core principles are lagging indicators. Leading indicators long-term means of creating value. In from many disciplines. Munger speaks of could include the quantity of new fact, he argues that this is management’s a ‘lattice of mental models’ and lists many intellectual property, successful prototypes primary responsibility. of them. Not all are complicated: a mental or incremental changes created. The ideal model is simply a rule of thumb that has measure is simple and well-constructed to Many of today’s business leaders are been shown to work. Some of the mental guide adaptable behaviour. aware of the need for adaptability but models that create adaptability in business have insufficient tools, learning and are the practice of Agile, the principles Future-proof organisations will rely experience for building adaptable systems. underlying Lean, the branches of Systems increasingly on adaptability, and even for Fortunately, these are simple, effective and Thinking and Theory of Constraints. leaders with limited exposure to creating easily available. Finding and understanding these allows adaptable organisations, there is a the flexibility of mind that people need to straightforward way to do so. They should Enable the right structure be adaptable. put in adaptable structures and thinking, The growth of technology start-ups has drive the correct processes, and measure spurred a worldwide movement towards Install the right processes the leading indicators. Done well, these flatter organisations. Elon Musk’s now- In IT development, there is a long history provide the most proven way to create famous August 2017 e-mail to staff (subject of software being out of date by the truly sustainable businesses. line: Communication Within Tesla) says, time it is released. In 2001, seventeen “Anyone at Tesla can and should email/ software developers met to create The Tasos Calantzis is a talk to anyone else according to what they Agile Manifesto to capture the principles designer and a public think is the fastest way to solve a problem of faster, more reliable development and speaker on the topics for the benefit of the whole company. better products – in short, adaptability. In of design and design You can talk to your manager's manager other areas of business, concepts like Lean thinking. He has spoken without his permission, you can talk Startup seek similar goals, but the leading and facilitated at events directly to a VP in another dept, you can process for delivering agility today is such as TEDx, the talk to me, you can talk to anyone without Design Thinking. This applies the principles World Economic Forum, anyone else's permission. Moreover, of Design to any area of the business, World Design Capital, you should consider yourself obligated blending creativity, business acumen and Global Entrepreneurship Week, EO University to do so until the right thing happens.” practical testing together. Design Thinking and the Australian Good Design Awards. He is the Musk is not the only one who thinks this has a rigorous process that guides founder of SuperUltra, a consultancy which creates way, but it is perhaps best articulated by people towards business-transformative breakthrough products, services and innovations author Dan Pink in his book Drive, which ideas at any scale from small process uses considerable research to show that improvements to big strategic shifts. Its for global companies like Procter & Gamble, BP and motivation is intrinsic and consists of strength is in the value of prototyping – Philips and has lectured at and collaborated with three factors: purpose, mastery, and (to so that any business improvement, new universities such as the Massachusetts Institute Musk’s point) autonomy. Even 105-year-old product or customer experience can be of Technology, Duke Corporate Education and the IBM has taken the radical step of hiring cheaply and quickly tested and improved Henley School of Business. hundreds of designers and training each in iterative cycles until its ready for Governance 18

Non-profit sector governing body challenges Tanya Nassif, Governance and Legal Specialist, IoDSA

Many NPOs are still trying to come to grips with the outcomes-based philosophy of King IV and how it can be implemented within their organisations.

pplying corporate governance King IV was 1 April 2017, and many non- some common challenges that the non- in an organisation has profit organisations are still trying to profit sector has in relation to applying predominately been viewed as come to grips with the outcomes- corporate governance: applicable and germane to JSE- based philosophy of King IV as well as Alisted companies. rationalising how they can implement 1. Not remunerating non-executive directors on the One of the key objectives of the King King IV within their organisations. Based governing body IV Report on Corporate Governance™ 1 on my personal research and facilitation Many non-profit organisations are unable (King IV) was to broaden its acceptance of in-house training sessions for non- to remunerate their non-executive by making it accessible and fit for profit organisations, applying corporate directors to serve on their governing body. implementation across a variety of sectors governance is a process; and understanding Funds are almost entirely used for doing and organisational types. It undoubtedly the philosophy before implementing the the great work that the organisation is delivers in facilitating how corporate recommendations is key – you can’t run endeavoring to do, and the related value governance is applicable to all types before you walk and you can’t walk before they are bringing to the community and of organisations through its generic you crawl. The foundational concepts and its people. Therefore the non-executive terminology, overarching principles and thinking around corporate governance need director who sits on the governing body sector supplements, including an non- to be understood, and the expectations will do so voluntarily (i.e: for no fee) profit sector supplement that provides need to be clear within the organisation’s guidance on how best to apply King IV management and governing body. 1 The King IV Report on Corporate Governance for within the non-profit sector. In my experience of working with non- South Africa 2016, Copyright and trade marks owned by the Institute of Directors in Southern However, the effective date for profit organisations I have come across Africa. 19

"It’s critical for the governing body to understand what its primary governance role and responsibilities are…"

because they intrinsically believe in what obligations is a predominant challenge clarity of governing body members’ roles the organisation is doing. for the non-profit sector. Ensuring all and responsibilities is often blurred in the Non-executive directors should view governing body members are available for beginning. It’s critical for the governing serving on a non-profit organisation meetings and the required preparation body to understand what its primary governing body as their personal CSI work beforehand is a difficulty. governance role and responsibilities are and giving back to the community. They The non-profit organisation should and King IV provides that the governing should look beyond the remuneration ensure before the non-executive director body: aspect and volunteer for a non-profit is appointed that they have suitable organisation that aligns with their core time and capacity to allocate to this • “Steers and sets strategic direction with values and beliefs. appointment, and should enquire what regards to both: the organisation’s strategy other governing body appointments the and the way in which specific governance 2. Acquiring experienced and competent non- non-executive director has, to have peace areas are to be approached, addressed and executive directors to serve on the governing body of mind that capacity and time will not conducted Another obstacle for non-profit become a problem in due course. • Approves policy and planning to give effect organisations is acquiring non-executive to the strategy and the set direction directors who fully understand the 4. Non-executive directors involved in management • Oversees and monitors implementation and expectations and role of a non-executive of the organisation execution by management, and director and who also have experience It’s not uncommon for the non-executive • Ensures accountability for organisational and skills that will add value to the directors in the non-profit sector to performance by means of, among others, organisation. Understanding directors’ become involved in management reporting and disclosures.” duties as well as the standard of conduct elements of the organisation. So, for expected of a director is fundamental example, if a non-executive director is an Understanding and maintaining these to fulfilling the role of a non-executive accountant and the organisation’s finance clear and objective expectations is director. department needs assistance, the non- extremely helpful in ensuring the Furthermore, various non-executive executive director will step in and help. organisation avoids overlapping the role of directors are appointed to the governing The difficulty is when the non-executive management versus that of the governing body due to their knowledge, skills directors needs to step back from been body. and expertise, and the value they will involved in the management work and What is clear from my interactions contribute to the organisation. move back into their role as a non- with the non-profit sector is the The governing body sets the strategic executive director on the governing body intention and willingness of non- direction of organisation, and having when the assistance is no longer required. executive directors to sit on a non-profit the right mix of knowledge, skills and This can be highly problematic and can organisation’s governing body – however experience on the governing body put strain on the governing body in that this undertaking should not be made is critical to the effectiveness of the management matters are being dealt lightly, and a clear understanding of the governing body. with at governing body level. Although commitment and expectation is critical. The non-profit sector battles in the above is not ideal and should not be procuring the right caliber of non- viewed in the long term – it can be done. executive directors and it’s imperative However, the organisation should ensure for the organisation to do a skills gap there are proper controls in place, and the assessment of what skills they require assistance of the non-executive director is on their governing body and have clear for a limited time with a plan to move the criteria for the non-executive directors non-executive director out of dealing with they need on their governing body. management work. Likewise the Institute of Directors in Southern Africa does offer free NED 5. Understanding the role and responsibilities of the Vacancy notices to their members. governing body Because many non-profit sector 3. Ensuring time and capacity of non-executive organisations start out small and, Tanya Nassif, Governance directors to sit on the board of directors hopefully, grow and then move to and Legal Specialist, IoDSA Availability in time and capacity with other applying corporate governance – the Opinion 20

Steinhoff fraud scandal an accounting irregularity? Dudu Msomi, IoDSA member

Calling the Steinhoff fraud scandal an accounting irregularity effectively depersonalises the misconduct. Corporate governance is fundamentally about human behaviour, attitude, mindset and responsible leadership of institutions. 21

"...boards of directors are a structure that was created to overcome the agency theory that assumes that those tasked with the control of an institution are motivated by self-interest at the expense of shareholders and stakeholders."

orporate Governance places There had Audit Committee members internal auditors. The third is the external emphasis on the rules and skewed towards Chartered Accountants. auditors. However, if risk is defined as a constraints on decision-making, And yet the shenanigans of the CEOs were probability or threat of damage, injury, specifically the need to constrain not detected by these boards. liability, loss or any other negative C‘managers’ to act in the best interest of the The question being increasingly asked occurrence that is caused by external or institution, especially public ones. Law and is, “What is the value of boards?” We must internal vulnerabilities, and that may be regulation will never be able to improve remember that boards of directors are a avoided through pre-emptive action, in governance practices. You cannot legislate structure that was created to overcome my eighteen years of sitting on boards, I ethics. Unethical individuals will always the agency theory that assumes that those have never seen CEO integrity risk on any find ways to subvert laws, regulations tasked with the control of an institution risk register or audit plan. Yet the lack of a and good governance practices such as are motivated by self-interest at the CEO’s integrity has the ability to destroy the King Code. King IV defines corporate expense of shareholders and stakeholders. billions of dollars of a company’s share governance as the exercise of ethical and The belief was that when given decision price in less than a week. If there are board effective leadership by the governing body rights, managers may act in ways that members even in organisations that have towards the achievement of the following maximise their own welfare at the not had governance scandals as yet, who governance outcomes: ethical culture; expense of the organisational good. In are not feeling vulnerable or that their good performance; effective control and many instances of bad governance, this useful days are numbered, then they need legitimacy. assumption has proved to be true. So in a reality check. Corporate governance is typically practical terms, how does a board that thought to be the exclusive domain of meets four times a year, with working Dudu Msomi is CEO boards of directors. But not necessarily board committees in between, really know of Busara Leadership so, as Leon Kirkinis, former CEO of African what is happening in the organisations Partners, a research- Bank cautioned me in 2006 when I did my they are accountable for and monitor. That oriented strategic MBA research on ‘Factors affecting female is what should be keeping every board advisory service and representation on boards of directors’. member awake at night. Sitting on boards consulting company He thought I was overzealous and over- is no longer a status symbol or for prestige. whose expertise estimating the role of boards in leading Risk oversight is an imperative for boards, is to facilitate the organisations. Kirkinis said: “The individual and with gained increased focus in the development and you must focus on is the CEO. The aftermath of the global financial crisis. I effectiveness of leaders to achieve their desired character and values of the CEO are critical would venture to say that the oversight goals. Msomi is a strategist, leadership expert in setting the tone, and they play a greater role of boards itself is a critical risk that and coach, business advisor, thought-provoking part in running an organisation, not the needs more efficient and effective ways speaker and writer. She is an IoDSA Fellow and has board.” Gill Marcus, the former Governor to exercise, especially as they are at the an MBA from GIBS. Dudu Msomi is on the board of of the Reserve Bank, as part of the same mercy of the information being prepared directors of the Financial Services Board (FSB), a research, shared that as a Chair of a and provided by the executives with Trustee on the Humulani Trust (Invicta Holdings) board, she prefers to have three Executive gatekeeping by the CEO. & Member of the GIBS MBA Alumni Bursary Directors minimum, including the CEO, King IV sees combined assurance as a Committee. Dudu loves being a member of the being on the board. She observes their model to optimise the assurance services IoDSA for the continuous learning opportunities. individual contributions and sees whether and functions to facilitate effective they are always in agreement, which control environment, with the outcome would be a symptom of collusion, or being being information with integrity to under duress that can indicate a deeper support decision-making and for external problem. With all these corporate scandals reporting. Combined assurance is ranging from Enron, Regal Bank and now safeguarding a co-ordinated (combined) Steinhoff, Kirkinis’ warning was inside approach to assurance on whether wisdom that must be heeded, especially in key risks are managed appropriately view of how things turned out at African within an organisation. The first line of Bank. All these companies had boards. defence is management. The second is Opinion 22

Inclusive (digital) growth - Local solutions to global problems Priya Thakoor, IoDSA member

Two billion people are currently unbanked or underserved across the globe. Accenture predict that if more than one-third of the world population in low- and middle-income emerging markets are brought into the formal banking sector, it will present a $380billion opportunity for the industry.

he Deputy Minister of Trade and and all players in the value chain can Unhinge your traditional business models. Before Industry in South Africa estimated benefit. And digital is a key enabler. someone else does. in 2015 that 2.8 million Small, Localisation and market fit. Social impact. Inclusive growth. Medium and Microenterprises Understanding your customers. Impact Investing. Radical economic T(SMMEs) contribute 52-57% towards the There has been an extraordinary amount transformation. A common theme not GDP and contribute 60% to employment. of investment into Fintech globally - only in South Africa. But developed and Yet only 70% of microenterprises have a north of $17.4B in 2016. However, the developing countries are all awakening bank account, while only 5% have access failure to recognise the nuances that to the reality that the sustainability of to term loans, and 1% to working capital exist within each developing country large companies, countries, and the loans from banks, as found in a recent underpins many of the failures of FinTechs welfare of citizens lies in how businesses study by CARE UK. Critical questions in emerging markets. MPesa is a case in can morph their models to have larger need to be answered: how are these point, proving even within a continent social impact and to stay commercially underbanked small and microenterprises and region, products, business models sustainable. Impact that leads to a going to access credit to help propel the and technologies that are successful in greater good for all. Firms can integrate lifeblood of the South African economy? one country are not always proven to be networks, partnership and communities How are we going to achieve inclusive successful in another. In some markets, in all areas of the organisation, from growth? What should companies and these could be literacy, cultural barriers and communication, marketing, distribution, boards do to integrate our mass markets access, gender paradigms and crime that sales, support and even product design. more effectively? bring into the fore distinctive threads that Why keep it only to the CSI department? Being part of the global digital need to be weaved into designing products, Digital can enable the reconfiguration of revolution, I can advise that inclusive services and business models that address these traditional processes and channels business models are certainly possible, these localised socio-cultural realities. to catapult an organisation’s ability to 23

integrate these communities. In a 2016 recorded 100 million people that belong ecosystem? Where are these partnerships report by GSMA, they mention there are to these informal saving groups. The in your business strategy? Link in with an 4.3 million agents that are the backbone buying power of Stokvels in South Africa incubator and get support in identifying of cash management, enforcing ‘know- has not been officially recorded due to the start-ups to help you co-create your your-customer regulations’ and providing nature of the cash-based transactions, products and understand your next cash in and out for mobile money in but it is estimated to be at least R25 billion market. emerging markets. Enabling financial annually. Digital can play a role within the By applying these principles, your inclusion and creating jobs in the process, mining and agricultural sectors in aspects company will be part of the inclusive telecommunications providers have of coordinating buying, distribution, growth that South Africa needs leveraged their distribution and scale communication, activity management, desperately, and gear towards a responsive to grow the pie and concurrently have and a plethora of financial services and business that has local solutions to social impact. How is your organisation retail products. How can your company global problems. Leadership has to drive weaving inclusion and integration into leverage the coordinated buying power of this change, and it starts with diversity your business strategy? What is your social 11.5 million adults? on the Board. Diversity in your senior value proposition? leadership team. Work on leveraging Collaborate with Disruptors. The Start-up existing assets and unhinge them from Leverage existing networks. Trusted networks. ecosystems are booming. the traditional trajectories. Partner with In South Africa, a rotating credit and Proliferation of new innovative financial existing networks. There are smaller agile savings organisation (ROSCA), the technologies (FinTechs), including crypto- companies already working on solving Stokvel, emerged as a mechanism financial technologies, opens the gateway your problem. You have a head start to to mobilize savings, providing a for low-value financial services to be made transform your organisation to be part of means for survival outside the formal available to the masses. For as little as an inclusive growth trajectory for South financial structure by remarkable and $0.01c a transaction, and without having Africa and the continent. A more inclusive, entrepreneurial women who ‘urbanised’ to build a physical bank, an opportunity digitally enabled strategy will secure your during the apartheid era. Why are these exists to redress the 2 billion unbanked company’s place in the future. forms of organised community savings adults around the world. schemes still persistent, despite the South Africa was named as one of Priya Thakoor is a sophisticated financial services in modern sub-Saharan Africa’s frontrunners thought leader in South Africa? Today, there are over for entrepreneurship by the Global Digital Transformation 800,000 Stokvel groups in South Africa, Entrepreneurship and Development and business at the and the National Stokvel Association of Institute in 2017. They estimate that if Base of the Pyramid. South Africa (NASASA) estimates that the conditions for entrepreneurship She has over 20 years’ 11.5m people belong to a Stokvel with are improved by 10%, it could add $176 experience in Retail, some R49bn in the Stokvel economy billion to the economy in South Africa. Banking, Start-ups, (National Stokvel Association of South Large listed companies have customer Technology and Africa, 2017). bases, mature supply chains, processes Venture Capital. Her The self-regulating nature of Stokvels and brand equity that most start-ups skills span digital strategy, inclusive models, ensures members are party to decision- envy. While these same large corporates social impact businesses, commercialisation, making, and is a manifestation of a require access to new and untapped ecommerce, building and running digital channels very organised and matured form of a markets, cheaper distribution methods for the largest clothing retailer and Big 4 bank in savings structure; this indicates merit and innovative ways to do business, South Africa. She is an activist and passionate in leveraging these trusted networks as there are mutual benefits in partnering about financial inclusion in frontier markets, a gateway to untapped mass markets. with start-ups in the ecosystem to FinTech, Human Centered Design, Start-ups But companies need to be responsible to solve these challenges and support and the Digital Revolution. Being a member of ensure there are mutual benefits and that entrepreneurship growth at the same the IoDSA has given her valuable insights on communities are not exploited. Globally, time. These small nimble firms usually important company and board issues, and how these trusted networks are a strong have an innovative model underpinned by to ensure Corporate Governance is addressed in a emerging market phenomenon, with 200 a Digital product solving local problems rapidly disrupting environment. variations within developing countries. with local solutions. Is your organisation In Africa alone, there are conservatively a partnering with and supporting this

"Digital can enable the reconfiguration of these traditional processes and channels to catapult an organization’s ability to integrate these communities." Member achievements 24 IoDSA Case Study competition winners 1st place: Matthew Marrian

inner of the IoDSA case study competition, Matthew Marrian found W his passion for corporate governance while studying his MBA. He was drawn to the African Bank Investment Ltd (ABIL) story, becoming increasingly interested in understanding the role of asset managers in assessing corporate governance when they invest in particular companies, and igniting what would become his winning case study. Marrian began his career as a member of Allan Gray’s graduate programme, subsequently taking on various roles within the firm, in client service and later assisting financial advisors on special projects. Today, he is Head of Client Service at Fundhouse, a global investment adviser that builds and manages local and global investment portfolios for its clients. “Asset managers are starting to look increasingly at corporate governance, and this trend will grow following what has happened in the past year with companies such as KPMG and Steinhoff,” maintains Marrian. He adds that thanks to the King Reports on Corporate Governance, South Africa is recognised all over the world for its guiding principles on the matter, leading the way for many other countries. What is a challenge standing in the way of sound corporate governance, he admits, is the fact that compliance with King is not a legal requirement for companies unless they are listed. “The challenge lies in the fact that King is principles-based and not law- based,” he points out. That said, with asset managers becoming more informed on the topic, together with shareholder activism, he believes there will be increased pressure from both clients and investors to probe more deeply into the corporate governance practices of South African businesses. “Asset managers need to become experts on corporate governance, and part of that process is becoming more questioning,” he says. Leaders have a role to play, but Marrian believes there is a difference between being an ethical leader and a charismatic leader – and points out that not all brilliant leaders have the right code of ethics. 25

2nd place: Dr Elikplimi Komla Agbloyor, Prof Joshua Yindenaba Abor and Lydia Adzobu

econd place in the IoDSA’s recent a company. Not only does it ensure that to the successful application of best case study competition went to Dr shareholder investment is put to good practice. “As evident in the SIC case study, S Elikplimi Komla Agbloyor, Professor use, it also enables firms to raise more while corporate governance structures Joshua Yindenaba Abor and Lydia Adzobu, funds. “Companies that adhere to strict exist, and leaders and directors may be the authors of the SIC Company Ltd case corporate governance practices ensure well aware of the governance principles, study. that minority interests are protected and there is a very weak will for proper Agbloyor is a senior lecturer at the that the firm considers all stakeholders enforcement,” she illustrates. University of Ghana Business School, and when decisions are made. These firms are Agbloyor agrees, stating that Ghanaian the first PhD graduate in Finance from the usually able to take calculated risks, thus institutions understand the principles of University of Ghana. Abor is a Professor reducing volatility in their stock prices corporate governance, but often – as the of Finance and the Dean of the University and developing the ability to create a SIC case study demonstrates – firms do of Ghana Business School, while Adzobu sustainable business that will last into the not comply with them. “In some cases, is a course facilitator of the College of future,” he adds. even when there is compliance, there are Distance Education at the University Despite the importance of corporate a number of other factors at play that can of Cape Coast, holding a Master of governance, Adzobu points out that be challenging, including lack of funds to Philosophy Degree in Finance from the one of the greatest challenges to bring on competent directors, as well as University of Ghana. implementation is the lack of proactive directors themselves not having sufficient Sound corporate governance, says oversight by industry leadership and time to dedicate to the company’s Agbloyor, is vital for the very survival of regulators. This poses a major threat requirements,” he reveals. Member achievements 26

3rd place: Carol Musyoka and Evalyne Mugo

arol Musyoka and Evalyne Mugo were recently awarded third place in C the IoDSA case study competition, for their study entitled, ‘From a desk to the board room: How Equity Bank morphed into a regional stallion jockeyed by good governance’. Both Musyoka and Mugo come from a legal background, with Musyoka holding a Bachelor of Law degree from the University of Nairobi and a Master of Law degree from Cornell University in the USA. Mugo, too, graduated from the University of Nairobi, later obtaining a diploma in Legal Practice from the Kenya School of Law and being admitted to the Kenyan Bar as an advocate in 2017. In addition to sitting on a number of local and international boards, Musyoka currently runs a consultancy which provides training solutions to multinational and local companies in Kenya on leadership and corporate governance. Mugo joined the consultancy far from perfecting corporate governance, sustainability of companies and that it last year, assisting in board evaluation as regulation is greatly outpaced by benefits all stakeholders. She informs processes and training sessions, as well as practice. The regulator, the Capital that many Kenyan laws and regulations research on corporate governance issues Markets Authority, has issued a new code around corporate governance are and developing case studies. of practice for the issuers of securities, based on King reports as best practice When it comes to the importance of which is aimed at obtaining better standards. sound corporate governance, Musyoka governance standards. This, together That said, she believes there is room for points out that a ‘fish rots from the head’, with the revised Companies Act 2015, improvement in terms of implementing and that good companies with consistent places a significant burden on directors profits and constant engagement with to take a more active role in the way their these standards in the boardroom, their stakeholders are most often run by companies are managed, she says. particularly in light of recent corporate good boards. Mugo maintains that good corporate governance scandals involving Kenyan She reveals that companies in Kenya are governance is vital for the growth and companies.

IoDSA congratulates Congratulations to IoDSA the newest Fellow member, Alkesh Singh, founder and MD of Astel Systems, on member recently receiving the Microsoft Magan Virenda SA’s Managing Director’s Award. Advert :

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Promoting governance in the Non-profit sector

In April 2017 the IoDSA launched a sponsorship initiative envisioned to provide the opportunity for 1. A select number of individuals to attend Parts 1 to 4 of the IoDSA Being a Director series; 2. Two organisations to have a fully sponsored basic board appraisal conducted by the IoDSA; and 3. Two organisations to have a fully sponsored in-house governance induction programme.

IoDSA members were asked to nominate individuals or organisations for this initiative via a defined application process. Applications were then reviewed by the IoDSA Executive team that then selected the individuals and organisations who were awarded the sponsorships.

Awarded Sponsorships went to:

Parts 1 to 4 of the IoDSA Being a Director series • Mdu Menze of Waumbe Youth Development Centre; • Lovemore Nyere of Dream Factory Foundation NPO; and • Sandisiwe Ncemane of Nuclear Industry Association of South Africa.

Basic Board Appraisal • Endangered Wildlife Trust; and • Savant Technology Incubator.

In-house Governance Induction Programme • Child Welfare Durban and District; and • Kotulong Community Centre.

2018 applications open in February 2018 29

Feedback from “IoDSA contributed immensely in “The Institute of Directors in Southern Africa capacitating our board of directors has an impeccable reputation for undertaking the Awarded as well as top management, objective, thorough Board appraisals. The EWT Sponsorships: including the social worker with the was eager to reap the benefits of having an corporate governance for nonprofit external appraisal for our Board, despite this not sector, training. The training was being a requirement for a Trust, as we aspire to informative and beneficial and the the highest levels of corporate government. As “The Board of Governors of Child information gained will be used such, we were thrilled when the IoDSA kindly Welfare Durban and District in running KCC better to further offered to sponsor this work for us. It resulted in applaud the training session improve the lives of the people in an excellent scorecard for our Board across the “Governance in the Not for Profit Midvaal and the surrounding area various categories that were assessed, and was Sector”, held at our Durban office of the Vaal Triangle. The King IV a smooth, professionally run process. The EWT on the 5th October 2017! The lines report on corporate governance has taken cognisance of the areas where we can of Governance outcomes leading is the pillar that KCC would work score even higher in the future, and how we can to Principles and Practices have and lean on whenever the lives of aspire to better the performance, despite it being never been clearer. This training the communities are concerned as excellent overall. We are grateful to the IoDSA for afforded immediate practical KCC believes in improving the lives this support, and for their input which ensures understanding of essential through sustainable development that the EWT is always striving for improvement in corporate governance.” and inclusive stakeholder approach.” our drive to achieve overall excellence.” Child Welfare Durban and District Kotulong Community Centre Endangered Wildlife Trust

“Savant Technology Incubator NPC the Savant Board appraisal ensured – further to the finalisation of the is a new organisation, and the Board objectivity and independence of the report, the board tasked one of the comprises a cross-section of individuals, process, which took into account the executive directors to identify some of some who are relatively inexperienced views of all the individual Directors on the key outcomes that can readily be and others who are more experienced the performance of the Savant Board as addressed by the board to enhance its in working on commercial boards. a whole. effectiveness. The project was an essential step in • Increased board participation in • The recommendations contained in the enhancing the effectiveness of the board. matters concerning strengthening report provided additional links to tools Although it is still early days to evaluate the board – the qualitative feedback and resources available from IoDSA that the full impact of the project, the provided by the board members gave an can potentially address some of the following are early positives emanating essential insight into areas which need areas of poor performance.” from our participation: improvement by the board which has • Independent facilitation by IoDSA – previously not been identified. Savant Technology Incubator NPC the role of the IoDSA as a facilitator of • Practical implementable outcomes

IoDSA Upcoming Training Member events

Being a Director Series: Part 5 Being a Director Series: Part 1 – 4 Member Orientation Date: 14 March 2018 Dates: 15 Feb, 07 Mar, 24 Apr, Date: 16 February Johannesburg 24 May 2018 Johannesburg Durban

Being a Director Series: Part 1 - 4 Social & Ethics Committees Member Open Day Dates: 06, 20 Feb, 06, 20 Mar 2018 Date: 27 February 2018 Date: 21 February Cape Town Johannesburg Durban

Governance of Ethics Mastering Board Leadership Member Open Day Date: 13 February 2018 Date: 01 March 2018 Date: 22 February Cape Town Johannesburg Cape Town

Secrets to being an effective Company Secretary Responsible Remuneration Member Cocktail Dates: 14 - 15 February 2018 Date: 14 March 2018 Date: 28 March Johannesburg Johannesburg Johannesburg IoDSA FAQs 30

Protection of Personal Information (POPI) – What you need to know Parmi Natesan, Executive: Centre for Corporate Governance, Tanya Nassif, Governance & Legal Specialist and Vikeshni Vandayar, Governance & Legal Specialist

What is the current status of Protection of Personal established with its members taking office on the Information Regulator and its Information Act? from 1 December 2016. The Information activities, visit http://www.justice.gov.za/ The Protection of Personal Information Regulator during 2017 issued the Draft inforeg/. Act No.4 of 2013 (“POPI Act”) was assented POPI Regulations for public comment and into legislation on 19 November 2013. is currently in the process of preparing the What is expected of an organisation in terms of the However, only those sections relating final Draft Regulations for presentation POPI Act? to the formation of the Information to Parliament. The Information Regulator In summary, the POPI Act places an Regulator and creation of ancillary anticipates the publication of the POPI obligation on organisations that collect regulations are currently in effect. An Regulations via Government Gazette and use personal information to ensure effective commencement date for the rest during April 2018 (however, this may that they do so lawfully. Lawfully means of the POPI Act is still to be proclaimed. change). To stay up to date on latest in compliance with the minimum The Information Regulator was formally developments and for more information requirements set out in the POPI Act 31

geared to protect the privacy/interests of Where should an organisation begin in its to protecting against the unauthorised the data subject. In a nutshell, this requires assessment and implementation of the POPI Act? electronic access to the information or organisations to ensure that they obtain There can be various approaches an data contained on the organisation’s consent to collect and use a data subject’s organisation may take in its assessment computers, networks, servers, and personal information, that they only use and implementation of POPI to ensure programmes, etc. Unlike information personal information for the purposes its compliance. The organisation should security, cyber security pertains exclusively for which it was collected, that they do ultimately find an approach that best to the protection of information/data not share that personal information with suits its operations in line with the that is in a digital form, i.e. accessible via anyone else, that they keep any personal level of compliance expected from that a digital form. In today’s age, almost all information that they store - whether organisation (depending on the extent personal information is digitally created/ for provision of services or for statistical, of personal information it handles). The saved, and thus cyber security is the more historical or research purposes - secure best place to start, however, is to first commonly used term. from unauthorised access and use, and identify all the personal information The type and extent of the personal that they communicate with the data which the organisation comes in contact information is the most relevant concern subject in regards to the above as well as in with (i.e. in respect to each and every for both types of security. In both the event of any potential breaches to their department, as well as between each circumstances, in order to create a security personal information. There are, however, department internally). Then to identify framework with the proper controls in exceptions provided to these general rules, and understand why this information place to prevent unauthorised access, and each organisation will need to access is collected (i.e. the purpose) Where is it is important to understand what what level of compliance is expected from it stored? Who has access to it? What data/information, if accessed without it, depending on the type of personal the current security measures are of authorisation, is most damaging to the information it collects and the purposes of the organisation around access to that organisation. The various legal, privacy such use. personal information (this includes overall and security teams within an organisation organisational information technology thus need to communicate with and work What is the governing body’s role? security and cyber security measures)? together on ensuring that the security From a very high-level view the governing body and/ What company information is provided to measures/programmes put in place or the members need to: suppliers, etc.? are most relevant and effective for that a) Understand what the organisation’s organisation’s specific needs. information assets are and what Without first understanding what these mean to the organisation. In personal information the organisation other words, the value - what would uses and, most importantly, the purpose be the extent of risk/damage to the of that personal information in relation to organisation should those information the functioning of or provision of services assets be unlawfully authorised from the organisation - the organisation whether through a privacy or cyber will not be able to (1) assess the relevance breach? How does this impact the of the personal information collected, (2) strategy and business plan of the the value of such personal information organisation? to the organisation, (3) the information b) Understand/ensure/provide oversight work flows across the departments to management on the creation of and entire organisation and (4) the Executive: the necessary policies and procedures necessary strategies, controls, policies Centre for Corporate around the collection, use, storage, and procedures that may need to be Governance security, etc., of personal information created in order to safeguard that personal [email protected] such as, for example, to ensure that information and protect the organisation the necessary crisis/disaster recovery against liability of any breaches. plans include cyber security/data breaches, and the risk register includes What this is the difference between information information technology and necessary security and cyber security? Tanya Nassif personal information controls, etc. Information security refers to protecting the Governance & c) Understand/ensure that the governing confidentiality, integrity, and availability Legal Specialist body is made aware by management of of all types of information (including [email protected] all breaches/incidents that occur, as well personal information) regardless of its as the course of action taken to address/ form. The information security programme rectify this in an organisation effectively provides the d) Understand what their role in the controls to protect personal information, event of breach is – i.e. Who is the key through limiting access and protecting Vikeshni Vandayar spokesperson, What is the procedure to against unauthorised use/acquisition Governance & Legal follow, etc. Cyber security on the other hand refers Specialist [email protected] Lessons from the boardroom 32 Clarifying the roles and responsibilities of shareholders, the governing body and management Richard Foster, IoDSA Facilitator

During the past year one of the key themes raised by delegates was the apparent lack of role clarity in many instances between shareholders, the governing body and management and the potential negative impact on good corporate governance.

his is of particular importance or governance guidelines are reasonably the other shareholders and stakeholders of with respect to two key aspects clear on same, there would still appear to the organisation. T which I wish to deal with. In the be some confusion and in more extreme The relevant legislation is generally clear first instance, the role of shareholders instances, the possible pushing across in that that members of the governing in relation to an organisation and the boundaries by various parties in order, body have a fiduciary duty towards the risk of possible adverse impact due to to further a specific self-interest. For organisation and need to perform their interference. Secondly, the role of the example, the furtherance of interests of a respective functions in good faith, for governing body in relation to management particular shareholder could be achieved proper purpose and in the best interest and the risk inter alia of micro by exerting influence on/or within the of such entity, with due care skill and management and/or interference. governing body, and can be exacerbated if diligence. Members of a governing body they happen to sit on such governing body may need to remind themselves on certain Governing body and shareholder relationship as a nominee of such shareholder. This occasions that they are not appointed Notwithstanding that both the law and/ situation can obviously be detrimental to in a proxy capacity but as members of 33

the governing body, who are required to in the organisation and a shareholder governing body. exercise their own independent judgement could be regarded as a shadow director The governing body should always on a matter in the best interests of the and be deemed to be a director for the endeavour to ensure that management organisation. purposes of accountability . In the ordinary are suitably empowered to get on and The playing field can become extremely course of events one should note that run the business whilst effective control challenging in this area from a practical shareholders have limited liability whilst is maintained over them doing so. This is perspective resulting in the following directors have unlimited liability. often a delicate balance and there are a question and concerns being expressed. number of factors that may influence the “But what if I support a governing body Governing body and management relationship governing body and should be considered decision not taken in the best interests of Having crossed the first bridge, let’s such as, i. trust and. level of confidence in the particular shareholder who nominated determine the primary corporate management, ii. complexity and size of the me? I could be fired!” It should always governance roles and responsibilities of a business and its attendant risk profile and be remembered shareholders owe no governing body which can be found laid stakeholder impact, and iii. the stage of an fiduciary duty towards the company as out in King IV. These are namely to: i. steer organisation in its life cycle. do the members of a governing body. and set strategic direction; ii. approve An aspect often raised is that that They do have certain rights either through policy and planning, iii. oversee and role clarity may not be as easily defined legislation or contractually provided monitor and iv. ensure accountability. in smaller organisations given that for, one of which would be the right to What then is the relationship and or the governing board member is often nominate and /or appoint or remove a distinction between the governing body a shareholder and manager. The King member of the governing body. I strongly and management and how is this working IV Sector Supplement for SME’s gives suggest however, that the veiled threat of relationship achieved? Professor Bob guidance on addressing this challenge and removal should not be allowed to fetter Tricker of the Hong Kong Business School inter alia, recommends that in order to ones judgment as difficult as that may articulated the roles as follows “The role of ensure role clarity, formal processes should be, as inter alia, it is unlikely to stand as management is to run the enterprise and be put in place to differentiate between a valid defence in respect of a decision that of the board is to see that it is being a single individuals roles as governing taken by a member of a governing body run well and in the right direction.” board member, manager and shareholder. which was not made in the best interests Having clarified the distinction in the Transition during an organisations growth of the organisation and was in fact unduly roles I suggest that Principle 10 in King cycles will be easier if the roles have been influenced by the shareholder. IV together with the attendant practices clearly defined from the start. It is imperative that the ground rules suitably provide for the required structure, In summing up it is suggested one are clearly documented as to what process and dynamics i.e. “The governing should endeavour to ensure that the the shareholder rights are, over and body should ensure that the appointment roles of shareholder, governing board and above those conferred by legislation, of, and delegation to management management and related governance in legally binding documents such as contribute to role clarity and the effective principles are suitably considered, the Memorandum of Incorporation, exercise of authority and responsibilities” documented and applied on a basis Shareholders Agreement or Shareholders The necessary delegation to proportionate to the requirements of Compact, which will vary depending on management is essentially achieved the particular organisation. In addition, the nature and type of the organisation. through the appointment of a Chief it is important that the communication In essence, these govern the various Executive Officer and subsequent of same is clear and the necessary relationships including the powers delegation of powers to such individual channels form part of the structure and reserved for shareholders in terms of within such parameters as the governing processes and allow for constructive decision making. Consideration and body may determine. The powers engagement between the role players. approval by the shareholders in respect specifically reserved for the governing body Such engagement, I suggest will to a of those particular matters would be should be clearly laid out as is the case large extent, determine the quality of required. with shareholders, to ensure management the relationships and enable a more In certain circumstances the court may are clear on what is within their remit effective execution of the various roles and however look through the structure to or mandate and what matters will responsibilities. ascertain who actually made the decisions need consideration and approval by the

"The governing body should always endeavour to ensure that management are suitably empowered to get on and run the business whilst effective control is maintained over them doing so." IoDSA Events 34 Year-end Member Cocktail - 23rd November 2017 35 Lifestyle 36

20 Surprising facts about coffee Amanda Hawkins

1. Shepherds discovered coffee in Ethiopia circa temperatures drop to negative 40 degrees because leaders believed it stimulated 800 A.D. F – first started during World War II to radical thinking. And, 16th century Italian Legend has it that 9th century goat herders preserve foods. clergymen tried to ban coffee because they noticed the effect caffeine had on their believed it to be "satanic." However, Pope goats, which appeared to "dance" after 5. There are two types of coffee beans: Arabica Clement VII loved coffee so much that he eating coffee berries. A local monk then and Robusta. lifted the ban and had coffee baptized in Seventy percent of coffee beans are Arabica. made a drink with coffee berries and found 1600. But Ottoman leader Murad IV took it Although less popular, Robusta is slightly that it kept him awake at night, thus the even further when he ascended the throne more bitter and has twice as much caffeine. original cup of coffee was born. in 1623 by creating the first punishments for drinking coffee, which included 2. Coffee is the second most traded commodity 6. The majority of coffee is produced in Brazil. Brazil produces 40% of the world's coffee, beatings and being thrown into the sea. on earth. which is twice as much as 2nd and 3rd In 1746, the Swedish government made it According to the Global Exchange, there place holders, Colombia and Vietnam. illegal to even have coffee paraphernalia, are approximately 25 million farmers in including cups and dishes. And finally, in over 50 countries involved in producing 7. Coffee was originally a food. 1777, Frederick the Great of Prussia issued a coffee. The number one commodity? Oil. Coffee berries were mixed with fat to manifesto declaring beer's superiority over create an energy-rich snack ball. It was coffee because he believed it interfered 3. In Italian espresso means "when something is also consumed as a wine when made from with the country's beer consumption. forced out." the pulp of coffee berries. This refers to the way espresso is made 10. You can overdose on coffee. – forcing boiling water through pressed 8. Coffee is actually a fruit. However, you would need to drink over 100 coffee grounds. And, although espresso Coffee beans as we know them are cups to consume the lethal dose of caffeine. has more caffeine per volume than coffee, actually the pits of a cherry-like berry that because it's consumed in smaller quantities, are grown on bushes. Even though coffee it actually has about a third of the amount is actually a seed, it's called a bean because 11. New Yorkers drink almost seven times as much of caffeine as a regular cup of coffee. of its resemblance to actual beans. coffee as the rest of the U.S.

4. Coffee was the first food to be freeze-dried. 9. There have been five attempts to ban coffee 12. Finland is the most caffeinated country. The process of freeze drying – when throughout history. The average adult consumes the equivalent fresh foods are placed in a dryer where Coffee was first banned in Mecca in 1511 of four or five cups of coffee a day. 37

8 awesome ‘coffices’ in Joburg 13. Coffee drinkers have a lower risk of Alzheimer's disease. Researchers found that older patients Need a place to work and eat? Speedy Wi-Fi, delicious snacks and with high levels of caffeine in their blood fantastic coffee – everything you need for your daily grind. Where were more likely to avoid Alzheimer's. do you go when you’re completely over the view from your desk? A Studies have also shown that caffeine coffice, of course! Here’s our round-up of eateries in Jozi that have has positive effects on type 2 diabetes speedy Wi-Fi, delish snacks and fantastic coffee – everything you need and Parkinson's disease. It has also been for the daily grind. shown to protect against skin cancer in women. Motherland Coffee Company My Bread and Butter, Parkview 14. Coffee stays warmer when you add cream. With branches in Rosebank, This Parkview café, crammed full of Coffee with added cream cools about 20% Dunkeld West and Parktown North, chatting breakfasters, might not seem slower than plain black coffee. Motherland’s menu isn’t especially an obvious choice for a coffice, but large, but the range of bowls, pancake walk through to the quiet back room 15. But when you add milk, it weakens the effects stacks, salads and paninis is fresh and (usually used for functions) and you’ll of caffeine. tasty. The coffee is more than just a full- find everything you need to pass a Our bodies absorb coffee much slower flavoured brew; Motherland is proud productive day, including a cosy fire when it has added fat milk content, to support Fair Trade and uses beans in winter. The morning menu gets a which decreases the stimulants. sourced from the continent, so every special thumbs-up; the salmon Eggs cup is a boost for African farmers. Benedict is particularly good, but 16. The largest cup of coffee ever was brewed in July there’s an expansive range of build- 2014 in South Korea. your-own options, too. It was over 14,000 litres. The largest iced Vovo Telo, Parkhurst coffee was brewed in Las Vegas in 2010, Venture past the harvest table where and was 5678 litres — ice not included. the day’s baked goods taunt your best Croft & Co Banting intentions, and you’ll find the Visit Croft & Co in the mornings, 17. Just smelling coffee can wake you up. quieter backroom where freelancers, and you’ll see so many laptops you’ll A group of scientists reported that simply writers and PR people set up their wonder if anyone still works in an inhaling the aroma of coffee can alter laptops or woo prospective clients. The office. This coffee shop’s appeal is easily the activity of some genes in the brain, coffee is good, the restaurant buzz is understood once you’ve sampled the reducing the effects of sleep deprivation. balm to self-employed people seeking a scrambled eggs – believed by many to And when you do drink that cup of coffee, bit of company, and the food is reliably be the creamiest served up in Jo’burg. caffeine reaches your blood fast, like 10 tasty. If you’re doing a morning stint, try minutes fast. the Pain Perdu; decadent French toast drizzled with berry coulis, mascarpone The Whippet 18. Dark roast coffees have less caffeine than and honey. Here’s the deal: you only get 45 minutes lighter roasts. of Wi-Fi, and after that you have to pay. Even though the flavour is often stronger, But you can overlook this once you’ve roasting actually burns off some of the Brewtown in Lonehill tasted the cake (try the Jode tart, layers caffeine. Lonehill’s contribution to coffice culture and layers of pancakes sandwiched offers up some irresistible caffeine with Rooibos-infused custard or the 19. Decaf does not mean caffeine-free. options – espresso and peanut butter Whippet cake, a concoction of milk A regular cup of decaf coffee actually shake anyone? – Solid sandwiches and tart, biscuits and lemon condensed has two-to-12 milligrams of caffeine. In great cakes. milk). Grab one of the bar stools comparison, a regular cup of coffee has looking out on to 7th Street so you can anywhere from 95 to 200 milligrams. watch Linden’s passing parade. Coffee Exchange, Parkmore 20. The original definition of coffee means "wine." The industrial chic interior might be Urban Grind Roasters Coffee's original name, qahwah, came super-cool, but everything else – from If you’re hungry, best bypass this from the Yemen term for wine. In Turkey the chill music to the sunshine that specialist coffee outlet – you can’t snack it was called kahveh, until the Dutch streams in through doors opening onto here, but what you can do is enjoy referred to it as koffie, where we get the a neighbourhood pavement bustle – a truly superb cup of joe while your English coffee. sets the scene for an easy and relaxed working session. Oh, and the coffee is emails download in a whizz, thanks to fabulously fast Wi-Fi. Source: www.goodhousekeeping.com easily amongst Jozi’s best.

Source: www.food24.com 38 Books

Mapping Innovation A Playbook for Navigating a Disruptive Age Greg Satell, McGraw-Hill, 2017 Innovation can be a long, tough slog. Consider the Macintosh. In 1968, US government engineer Douglas Engelbart demonstrated – in what is now called the ‘Mother of All Demos’ – how people could interact with computers. He used a keyboard and an innovation he called a ‘mouse’ to create, edit and move text on a screen and other seemingly magical things. Later, Xerox researchers enhanced his concept with the development of the Alto personal computer. But it wasn’t until 1984, 16 years after Engelbart’s demonstration, that Apple’s Steve Jobs transformed those developments into the Macintosh. That was fast action for its day, but innovation must move even more quickly now. Innovation expert Greg Satell explains how innovation works, what it requires, how to manage it and how to do it well. getAbstract recommends his comprehensive innovation manual to start-ups, investors, large firms and small businesses.

The Art of Connection 7 Relationship-building skills every leader needs now Michael J. Gelb, New World Library, 2017 Leadership expert Michael J. Gelb explains that many great businesses base their success on face-to-face communication. The leaders of these companies depend on seven personal relationship skills, such as practising humility and becoming a better listener, to increase the scope and the depth of their organisations. Gelb presents a compelling case that learning these skills can help you connect more profoundly with other people and with yourself. His supporting testimony from noted authorities becomes a little overwhelming, but his motives are clearly supportive. getAbstract recommends Gelb’s advice to everyone seeking to build better relationships, especially those in customer-facing jobs or in human relations.

The Stress Test How pressure can make you stronger and sharper Ian Robertson | Bloomsbury USA, 2017 German philosopher Friedrich Nietzsche (1844–1900) said, “What doesn’t kill me makes me stronger.” Nietzsche saw people as capable of managing their own destiny. He didn’t see them as passive entities who couldn’t challenge fate. Psychologist and neuroscientist Ian Robertson reports that recent research backs Nietzsche’s position. If you wish to overcome adversity you must believe that you can. Richardson draws on his professional experience plus advances in neuroscience and psychology to offer a compendium of case histories that add up to a hopeful, inspiring message. getAbstract recommends his report to those responsible for employee welfare or those who’d like insight into their own ability to meet challenges.

Ask More The power of questions to open doors, uncover solutions, and spark change Frank Sesno | AMACOM, 2017 Former CNN anchor and White House correspondent Frank Sesno spent his career asking questions. Based on his ‘ of questions’, he explores the value of inquiry. Each chapter covers a different type of question, including ‘diagnostic, bridging, confrontational, mission, interview, legacy’, and more. Sesno also discusses interviewing experiences, and he includes a helpful guide to possible questions you might ask within each category. getAbstract recommends his helpful manual to executives, managers, media professionals, teachers, health care practitioners, and anyone who uses questions every day.

The IoDSA partners with getAbstract getAbstract 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/iod Essential business reading brought to you by the Username: Please use your email address provided to the IoDSA IoDSA from getAbstract. Password: Please use your IoDSA membership number 39 Wine

Wines you can trust

he last issue of Directorship featured quite a lot! Largely confined to the Western successful brands of late is Mullineux, a range of articles looking at Cape – they can be so parochial – there has and Californian Andrea Mullineux was T reputational issues through various been an explosion of blends that without there, who with husband Chris has been lenses. And yes, I was a contributor, as inside knowledge, you have little or no one of the reasons the Swartland region I don’t just write about wine. So why is idea where they come from. This plethora has become hot property. Sitting in the reputation management critical? of new labels also seems to believe it gives back row, were two ‘quiet men’ with Are you really aware that the reputation them license to charge some fairly fancy huge reputations; Jan ‘Boland’ Coetsee of most institutions and companies are prices. (Vreisenhof) and Kevin Arnold (Waterford) impacted by the reputations of those at While I like to experiment, we all tasting each wine as if for the first time, director or senior executive level? want to be sure we are getting value for while beside them the irrepressible In the run-up to Christmas, we had the money – hence the need to solicit good David Nieuwoudt of Cederberg was fully future of a 106-year-old political party being advice – or stay with the tried and trusted engaged in proceedings. To the other debated largely around the reputations of winemakers. Which brings me neatly 80% of CWG members, I apologise for not a range of individuals; while at Steinhoff to the Cape Winemakers Guild. I was mentioning you, but all members can be a whole array of corporate personalities privileged again to be at a tasting of their found on www.capewinemakersguild. find their reputations in tatters. As 2017 auction wines. Usually just under com. There are, of course, many other Warren Buffet said: “We can afford to lose fifty or so members all produce limited rockstar winemakers outside the CWG, money – even a lot of money. But we can’t edition specials, and each winemaker is and there is an increasing number of afford to lose reputation – even a shred of there in person, and all made possible by international owners, so go and forage reputation.” And then I have to ask how a 22-year-old partnership with Nedbank. around. And remember, wine is not just many South African boards have people Looking around at the winemakers, I for drinking. I think it was WC Fields or on them who understand reputation reckoned we had around 1250 years of perhaps Keith Floyd who said: “I cook with and brand issues in today’s world? Crisis experience in the room. Some are about wine; sometimes I even add it to the food.” management is real, and silence is not to retire; Danie Steytler (Kaapzicht), Wishing you all a good 2018 in every the answer. The newly crowned richest Etienne Le Riche and Neil Ellis. All with respect. Let’s make it a good vintage for person in the world is Jeff Bezos of Amazon, towering reputations, great ambassadors South Africa, and I’m talking more than a company with the best corporate for South Africa over many decades, and just wine. reputation in the US. He understands: ‘Your interestingly all passing the baton to brand is what people say about you when sons. Others such as the Chairman of Jeremy Sampson you are not in the room.’ CWG, Miles Mossop, whose father was a [email protected] Now some of you will be asking what giant of the industry, has just left Tokara Fellow of the IoDSA all this has to do with wine? The answer is, to build his own label. One of the most 40 Road Test

Velar sets the pace

The much-anticipated fourth member of the Range Rover family has arrived – a mid-sized, five- seat, luxury SUV that aims at delivering superior levels of refinement, modernity and technology. Wynter Murdoch reports.

n much the same way as Land Rover’s Drag coefficient measures 0,32 – the in offering its occupants high levels of Range Rover Evoque captured lowest achieved by any Land Rover – performance and comfort. consumer attention following its helped by door handles that retract into From the stylish interior with its easy- introduction to South Africa in 2011, so the bodywork when the vehicle is on to-operate infotainment system to the Itoo is the recently released Velar likely to the move. Equally, headlight clusters are diverse powertrain and body kit offerings prove a hit in the sales charts. among the slimmest yet seen on an SUV – in the line-up, the vehicle tended to The all-wheel drive model – which yet they house the latest and brightest in deliver top-notch ratings for refinement, slots between its smaller sibling and the LED technology. form and function. larger and pricier Range Rover Sport – “Modernity, elegance and glamour, From the inside, the car’s appointments offers plenty of fashion appeal without underpinned by strength, solidity and are likely to be characterised as elegant deviating too far from the all-terrain path a fantastic presence,” is the way chief though simplistic, with trim lines beaten by generations of its luxuriously designer Gerry McGovern describes flowing gracefully across the fascia appointed, safari-grade forerunners. the Velar’s look, adding that tailored and along the doors. “An unwavering Like them, the Velar is eminently technology and innovation have been belief in reductionism has been fully off-road capable – though Land Rover’s combined to create a vehicle that the employed, with switches being kept to an prediction is that very few buyers are company hopes will resonate on an absolute minimum to help create a calm likely to take the vehicle into the bush; a emotional level with consumers. sanctuary,” is how a company statement little gravel road driving and pavement In this sense the Velar could be said to describes the cockpit. parking forming the boundaries of most have been styled to capitalise on the allure Centre piece of the cabin is the projected, adventure-related activities. created by the Evoque, a model which infotainment system – dubbed the Touch In the eyes of many, the vehicle helped to lift Range Rover’s popularity Pro Duo – which features two 10-inch represents one of the most effectively on a global level by creating a desirable high-definition touch screens that styled SUVs yet to be produced. While new segment within the SUV sector. Like have been integrated seamlessly into some of its artistically sculptured lines that derivative, the new model is said to the dashboard behind hidden-until-lit appear to have been borrowed from sister represent a unique market niche. surfaces. brand Jaguar’s F-Pace – with which it On test drives during the vehicle’s The upper screen houses navigation, shares its platform – there remains plenty launch in South Africa, the Velar drew audio and communication functions of functionality in its precision-crafted, attention wherever it went – its ability while the lower unit is used to operate minimalistic form. to stand out equaling its proficiency settings for the air-conditioning and the 41

brand’s trademarked Terrain Response chassis and powertrain controls. The system is user friendly and easy to navigate, the intuitive displays working with the cabin’s architecture to add elements of modernity. Steering-wheel- mounted touch controls include a module for managing audio programming and volume via an iPod-like circular interface. Though leather upholstery is invariably mandatory in a Range Rover, the Velar offers as an alternative sustainable, premium textile seat material. The cloth – manufactured in Dapple Grey – has been developed in conjunction with Danish company Kvadrat, said to be Europe’s leading manufacturer of high-quality designer textiles, and is complemented by suede inserts in Ebony or Light Oyster. The light, stiff, aluminium-intensive body, together with double-wishbone front- and integral link rear suspension, provides a good basis for agile handling and ride comfort. While less resolute in feel than those on Jaguar’s F-Pace, the underpinnings prove adept at soaking up bumps while keeping the upper structure on even keel, helped by four-corner air 177kW/500Nm variants as well as a performance stakes. suspension on top-level, V6 models. similarly force-fed V6 that produces 221kW Specification levels run from the Electrically assisted power steering is light and 700Nm – are said to be clean and standard Velar, through the usual S, SE but precise. refined. The petrol engine line-up – four- and HSE nomenclatures, with sportier From the off-road perspective, ground cylinder plants that deliver 184kW/365Nm body kit and wheels available if you opt clearance is said to measure 251mm – or 221kW/400Nm – is complimented by a for R-Dynamic derivatives. Additionally, deemed to be class-leading – though the supercharged V6 that delivers 280kW and customers are able to specify Black and figure drops 38mm to 213mm for models 450Nm. Premium exterior packs for an individual that aren’t equipped with air suspension. During the launch I was impressed by look or, alternatively, build their own Similarly, wading depth drops from the punch offered by the 177kW diesel Velars using Land Rover’s Configurator. 650mm to 600mm for vehicles with coil engine and the smoothness of the All models are sold with Land Rover’s springs only. Traction technologies across supercharged V6, the latter’s ability to Five-Year Care Plan: a five-year/100 the range include Terrain Response 2 and offer kick-in-the-back acceleration – 000km service plan, a five-year/100 All Terrain Progress Control. accompanied by a sonorous sounding 000km maintenance plan and a five- Power is supplied by a choice of exhaust note – adding appeal. year/100 000km warranty. petrol and diesel engines from Land Common to each of the models was the A couple of things: The model Rover’s Ingenium range, each matched degree of refinement palpable in the ride designation for each variant is determined to smooth-shifting, eight-speed quality, with little wind noise, vibration by the output of the engine in horsepower, ZF automatic transmissions which or harshness intruding into the cabin. prefixed by whether the unit is driven by incorporate Intelligent Driveline As eminently comfortable fast tourers, petrol or diesel. Prices of the models range Dynamics. each of the models scored highly for their from about the R950 000 mark for the The diesel units – four-cylinder, suppleness in riding undulations and standard version to more than R1,5-million turbocharged 132kW/500Nm and their ability to please and reward in the for a First Edition variant.

"Modernity, elegance and glamour, underpinned by strength, solidity and a fantastic presence.” 42 Travel

4 hours in Seoul Kate Kennedy

Seoul, the capital of South Korea, is a huge metropolis where modern skyscrapers, high-tech subways and pop culture meet Buddhist temples, palaces and street markets. If you find yourself with a few hours to spare in this vibrant city, here are a few ideas of where to go.

Samsung D'Light Nanta Inside Samsung’s head office is an exhibition space showcasing the latest product line-up by Samsung Electronics. There are three storeys filled with Samsung – televisions, mobile phones and gadgets from the company’s past, present and future. It’s a space of interaction, meaning that you can check your own laptop’s content on gigantic screens, play online games from your mobile phone, and test out new developments. www.samsungdlight.com

Nanta Nanta is a silent production, heavy with comedy. It is native to South Korea and performances take place in as many as Museum Kimchikan The museum collects data and statistics five theatres in Seoul. Be prepared for This is a museum dedicated to ; one on kimchi, and regularly offers activities props to come flying your way – balls, of the staples of Korean cuisine and the for visitors, such as demonstrations of the carrot shavings and cabbage chunks and country’s first-ever food museum. Exhibits kimchi-making process, kimchi tastings, the like – and possibly be hauled on to the focus on the food's history, its many and cooking classes. There are detailed stage to participate. historical and regional varieties, and its explanations of the process of making www.nanta.co.kr importance to Korean culture and cuisine. kimchi, with a diorama for each step, 43

items through an online cyber museum. These permanent exhibitions have free entry, but some wings of the museum host temporary exhibitions of art or photography. It’s worth checking out the museum’s website to see what’s going on before you visit. eng.museum.seoul.kr

Museum Kimchikan

of the Joseon Dynasty continued to expand the palace, but much of it was destroyed during a slave rebellion in 1592. Reconstruction started nearly 300 years later, in 1867, when over 300 new N Seoul Tower buildings expanded the complex to 5,792 Get up high for great panoramic views rooms, covering 410,000 square metres of Seoul. Situated on top of the Namsan of land. Today, only about 40% of the Mountain (represented by the N in the original buildings exist. Three tours a tower’s name) the structure stands nearly day are given in English, and the royal 480 metres above sea level, making it changing of the guard is held in front of one of the highest towers in the Orient. the main gate every hour from 10h00 to At the base of the tower is the Seoul 15h00 – definitely something not to miss. Tower Plaza, which was recently opened to the public and includes a number of www.royalpalace.go.kr restaurants and a gift shop. The tower is a source of great interest for the locals Seoul Museum of History thanks to its Digital Observatory and 32 LCD screens recounting the 600-year history of the city. www.nseoultower.co.kr/eng

C Through Coffee enthusiasts will enjoy a visit to this and a section in which people can view café. Owner and barista Lee Kang-bin is the typical environment in which kimchi well-known in Korea as a coffee artist. would be made, including the historic He is noted for his ‘Creamart’ which is pottery forms used for the fermentation essentially Dutch coffee with thick sweet and storage processes. You can also get a cream decorated with an elaborate closer look at the Seoul Museum of History painting on top like Van Gough's The in kimchi through a microscope. English Get a real feel for the Seoul of old, Starry Night which he makes for a Audio guides are available and a guided its traditional culture and even its single customer a day. If you’re not lucky tour is also available at designated times. landscape. Exhibits cover everything enough to be that customer you might from the prehistoric era to modern Seoul. want to try the Scotchino – a Scotch Gyeongbokgung Royal Palace Many relics from the Joseon Dynasty candy-tasting drink, overflowing with The ‘Palace Greatly Blessed by Heaven’ were donated during the Relic Donation sensuality. It comes in a mini tea cup has the longest and most storied history Campaign, so you’ll get a good sense of with the thick foam overflowing the rim, of any Korean palace, beginning in what the city was like at its founding. sprinkled with cacao and coffee powder 1395, three years after the beginning Another exhibit showcases the daily life and tastes both sweet and slightly bitter of the Joseon Dynasty rule. Later kings of the Seoulites, while another presents at times. 44 Insight

7 Essential habits of successful business owners John Jantsch 5. Fill the gaps Successful business owners seem Below are seven habits I’ve seen show up in most of the successful to always be asking what’s missing. business owners I know. This can develop into a distraction, but when you stay really, really close to your customer you can start to recognise gaps in what you have, how you communicate and what they want. 1. Get up early 3. Obsess over value There are few better ways to succeed So, let’s A lot people preach the idea of in business than to find a need and fill start with a obsessing over the customer, but it – all the better when that need exists tough one I’ve found that real success comes in people who already trust you to serve right off. from obsessing over value – valuable them. The key is to understand your Successful products, processes, communication, customer’s world and journey to get business follow-up, service, content, connection the information, products and services owners get and context. When you obsess about they seek. a tremendous amount of focused work delivering value, measuring value and done from about 5am to 7am. Now, this increasing value in everything you do, may or may not be client work. It’s just you start to realise that everything 6. Get out of the office as likely to be journaling, meditating matters and there are no small things – These days you or planning the week, but it’s how they and there’s no better way to serve your can run your get a jump on the coming storm of the customers than that. This is a subtle entire business day. I started this habit myself in an thing – the best way to serve your without actually attempt to get a few things knocked customers is to obsess over value. interacting with out before my children got up and it other human stuck even after they moved on. For me beings, but human it seems like the only quite time that 4. Take care of the plant beings need to exists in the day. Running a business is physically interact in order demanding to live. If you’re to grow, feel, learn, and understand 2. Focus on important first and mentally you’ve got to get out of the office. This one is so hard because Twitter and stressful. Go to a conference, grab coffee with Facebook and email just don’t want Yes, it’s also a customer and mingle with people you to do this. Successful business a pretty who are weird (your definition.) It’s owners ignore distractions and focus awesome ride, how you find strategic partners, new on the highest payoff work first. This but only if you perspectives and opportunities to may include doing the grunt work they maintain the learn and grow. don’t really want to do. This a mental stamina to win as much as a physical to do list put in long, win. There’s something really freeing high energy days. The most successful 7. Love to learn, learn to teach about realising you’ve conquered the business owners I’ve worked with Some of the most successful business toughest thing you have to do that take time to recharge, reenergise and owners are really great at selling, but day by 9am! On the days I actually do refuel through things like exercise, they don’t sell so much as passionately this I get so much more done in total healthy eating and rest. Once you’ve teach. Here’s the funny thing though, because I been doing this for a while you start many don’t actually like to teach. Just don’t fuss to realise that the time you invest ask someone who works for a small around trying in these kinds of things pays some business owner. They are rarely very to figure out pretty hefty dividends in terms of good at teaching employees how and how to put productivity. This is pretty easy one why to do things, but they are generally off what I to develop bad habits around too, so insatiable learners who realise they know I should finding ways to create accountability need to figure out how to teach and tell do. is essential. stories in order to succeed. ABU DHABI No pit-stop

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