A April | May | June 2015 SHAREHOLDER ACTIVISM - THE ACTIVIST REVOLT GET READY FOR KING IV WHY COMPETENT DIRECTORS ARE INVALUABLE B Secure Board Portal for the Paperless Boardroom • Content segregation • eSignaeSignaturestures • Online-offl ine syncing • SecurSecuree email • Annotation sharing • VVotingoting boardvantage.com 4th FloorFloor,, The Firs, Cradock AAvenue,venue, RRosebank,osebank, JohannesburJohannesburg,g, SouthAfrica | 011 759 4060 [email protected] Ad_BV_Africa_directorship_0914_FINAL.indd 1 9/24/14 1:34 PM 1 CONTENTS 04 From the IoDSA | Angela Oosthuizen 05 Editor’s note | Jeremy Maggs 06 The activist revolt | Rodney Weidemann 10 Agents of change | James van den Heever 12 Why competent directors are invaluable | Lynley Main 15 The Director 10 point self-assesment | Vikeshni Vandayar 16 Navigating the client lawyer relationship | Samantha du Chenne 18 Get ready for King IV | Donovan Jackson 20 The impact of the new auditors report | Linda de Beer 6 16 24 22 Better ways to manage and monitor relationships | Neil Morris 24 A view from... Simo Lushaba 26 Opening doors leading to the boardroom table | Michelé Serfontein Secure Board Portal for the Paperless Boardroom 28 Chairman, Chairwoman or Chair? | Michael Judin 30 IoDSA FAQs - Director Due Diligence | Parmi Natesan, Tanya Nassif & Vikeshni Vandayar • Content segregation • eSignaeSignaturestures 32 Profiling CD(SA)s • Online-offl ine syncing • SecurSecuree email 34 IoDSA events • Annotation sharing • VVotingoting 36 Member profile: Ingrid Goodspeed 38 Book reviews 39 Wine: Fakes, robbers and worse | Jeremy Sampson boardvantage.com 40 Road test: Formulating the Fusion | Wynter Murdoch 42 Travel: 4 hours in Guangzhou | Kate Kennedy 4th FloorFloor,, The Firs, Cradock AAvenue,venue, RRosebank,osebank, 44 Last word: In search of stationery’s Holy Grail | Jeremy Maggs JohannesburJohannesburg,g, SouthAfrica | 011 759 4060 [email protected] Publisher: Richard Lendrum Editor: Jeremy Maggs Managing Editor: Debbie Bassa [email protected] Layout: Buyisiwe Dlamini Production Manager: Mabel Ramafoko Directorship is published by Future Publishing (Pty) Ltd, 4 Biermann Avenue Rosebank, 2196 A division of Future Group Telephone: (011) 280 3000 Fax: (086) 509 2666. Opinions expressed in Directorship are not necessarily those of the publishers. (Pty) Ltd Permission to re-publish any article or image or part thereof must be obtained in writing from the publisher. © Future Publishing Ad_BV_Africa_directorship_0914_FINAL.indd 1 9/24/14 1:34 PM 2 The S-Class Coupé. Welcome to the view from the top. A sight of beauty and triumph. The S-Class Coupé, with industry-first curve tilting technology, leans itself into bends for ultimate driving comfort. Unveil a vision of performance, poise, and unparalleled luxury that can only be described as breathtaking. Welcome to the view from the top. Visit www.mercedes-benz.co.za/s-coupe Vehicle specifications may vary for the South African market. 3 The S-Class Coupé. Welcome to the view from the top. A sight of beauty and triumph. The S-Class Coupé, with industry-first curve tilting technology, leans itself into bends for ultimate driving comfort. Unveil a vision of performance, poise, and unparalleled luxury that can only be described as breathtaking. Welcome to the view from the top. Visit www.mercedes-benz.co.za/s-coupe Vehicle specifications may vary for the South African market. From the IoDSA 4 The courage of a director Office Bearers Patron Basil Hersov President Reuel Khoza First Vice-President Mervyn King Vice Presidents Roy Andersen, David Brink, Bertram Lubner Non-Executive Directors Venete Klein (Chairman), Prieur du Plessis (Deputy-Chairman), John Burke, Yolan Friedmann, nais Nin, author and novelist is quoted or unpopular viewpoints, courage to stand Ingrid Goodspeed, Sathie Gounden, as saying, ‘Life shrinks or expands in firmly by one’s own values or hold others to Khutso Mampeule, proportion to one’s courage’. I had the their organisational value; courage to admit great privilege of participating in our when one is on unfamiliar ground by saying, Marichen Mortimer, Pumla Radebe, Afirst Directors’ Circle group mentoring session ‘I don’t understand, please explain’; courage Muhammad Seedat. for 2015 in February and Courage was our first to innovate and change. In the face of the topic for discussion. It is neither an easy nor pressure for short-term profit, it takes courage Executive Director comfortable topic, but I was encouraged to raise the deep ecological and social crises Angela Oosthuizen (Chief Executive by the openness of the group to fill in the facing us as being pertinent to business Officer) following statement in relation to their roles performance and long-term viability. as directors or executives: ‘I really want to Directors are human, and have to manage Regional Chairmen (do something) but (this is what I perceive is the same fears as others, including the risks Sonny Ako-Nai (KwaZulu-Natal), preventing me from doing so)’. The apparently of not fitting in. The added pressure of power George Zacharias (Western Cape) simple expression of these limiting beliefs in and responsibility can heighten those fears. the company of strangers was itself an act of Directors are furthermore accountable to a Offices courage by the participants. variety of stakeholders and may feel pulled National Office It was acknowledged that the underlying in many – at times, opposing – directions. emotion relating to the limiting beliefs was I encourage directors to invest time in [email protected] fear. Fear of exposure, ridicule, reputation themselves to build courage, not least in Tel (011) 035 3000 or job loss, or the consequence being worse developing the supportive skill of raising than the current situation. In a practical way, difficult issues constructively. Great leaders the Directors’ Circle elicited the very definition know what they consistently stand for. Western Cape Branch of courage. Courage is not the opposite Growing your competencies and cultivating [email protected] of fear; courage is acting despite the fear. your understanding of the business will Tel (021) 715 3757 How one develops that courage is based in enhance your confidence and courage in a Fax (021) 715 3762 deepening awareness of one’s non-negotiable mutually bolstering positive cycle. values, and improving both one’s knowledge Having opened with a poignant quote, let KwaZulu-Natal Branch of the business and one’s competence as me close with one by a career officer in the [email protected] a director. Simplistically stated, acting Canadian Army, Peter Voyer, who wrote in Tel 082 495 9596 from a ‘blueprint’ of values + knowledge + an article titled Courage in Leadership: From competence equals courage. the Battlefield to the Boardroom – ‘Survive, and Fax (031) 266 5196 Directorship requires courage, and not only you’re likely agile, decisive, quick thinking and Website: www.iodsa.co.za as a dissenting director. Courage is perhaps – above all – courageous’. My only suggestion Connect with the IoDSA on a foundational characteristic of effective would be to replace survive with THRIVE. C social media directors, and is explored further as one of the five moral duties in King III. It is a trait Angela Oosthuizen Institute of Directors in Southern Africa that will be called upon and tested in many Chief Executive Officer instances in any directors’ career. Courage to @The_IoDSA @angelao28 ask the difficult questions and raise alternate #DirectorshipMag Editor’s note 5 Future planning and future proofing fter arguably the toughest state budget in 20 years III, and work is currently underway on the next iteration, which is of democracy, the business community is hunkering due by mid-2016. If you’re playing the board A-game you need to down for a 2015 that will see growth targets challenged, know what the current thinking in this respect is. power capacity constrained, and what promises to be We hope this edition of Directorship plays some role in helping a bitterA round of public service wage negotiations. If you thought you strike the right strategic path – you don’t want to be like the last year was tough, you ain’t seen nothing yet. balloonist in this old joke: To that end all stakeholders in business will be asking tougher questions this year, and company boards will be even more A man is flying in a hot-air balloon and realizes he is lost. He reduces exposed as they are scrutinised and held to even higher standards height and spots a man down below. He lowers the balloon further and of accountability. The age of stepping over the line or indulging shouts, “Excuse me, can you tell me where I am?” in any form of maverick behaviour is long gone. So, we take a close look in this edition at shareholder activism. Writer Rodney The man below says: “Yes. You’re in a hot air balloon, hovering 30 Weidemann tells us the idea of shareholder activism is, and has feet above this field.” always been, a divisive one, but whether positive or negative, “You must work in Information Technology,” says the balloonist. there is no doubt shareholder activism is becoming far more “I do,” replies the man. “How did you know?” commonplace. It’s a useful piece for board members to engage with as there will be more and more awkward encounters and “Well,” says the balloonist, “Everything you have told me is tricky questions. Part of effective corporate leadership is having technically correct, but it’s no use to anyone.” a strategic vision. If board meetings are not devoting a good The man below says, “You must work in business.” percentage of their time to future-planning and future-proofing, “I do,” replies the balloonist, “but how did you know?” then the job is not being done. In a second important article, James van den Heever tells us “Well,” says the man, “You don’t know where you are, or where you’re boards have the ultimate responsibility for ensuring the company going, but you expect me to be able to help.