Page 6 - KZN Business Sense - 8.2

A FRESH PERSPECTIVE ON CORPORATE GOVERNANCE

Cathie Lewis, Earth friend, or your worst enemy. The Covid-19 pandemic starkly brought He also apologised unreservedly Know what the conversation
Energy golden rule is to find the sweet to the fore the underlying ethics to all those employees who had should be
spot in the middle where there and morals of companies in the been affected by the culture and Good leadership knows what
is enough governance without it way they treated their stakeholders. thanked the employees for the the salient aspects of the company
ing IV becoming stifling and counter to willingness to come forward and
defines what the company set out to do in It is common cause that the share their stories and experiences. are, whether internally within
Kcorporate the first place. Governance should culture and ethics of a company The eight-month study resulted the company (on a micro level),
governance as be an enabler and driver of are driven from the top and in shared experiences by more or externally on a meso or macro
the exercise of purpose and strategic objectives, that the leadership sets the tone. than 10 000 people, more than level outside the company. The
ethical and not a bureaucratic nightmare that What kind of behaviour does 100 group listening sessions, 85 governing body should know and
effective restricts innovation and progress. the governing body actively confidential individual listening understand the material issues
affecting the company, its risks,
leadership encourage? What behaviour does sessions and nearly 140 individual opportunities, and drivers. These
by the Examples of best practice it condone, or turn a blind eye written submissions. issues are not the same but may
governing body towards processes and systems include to? Examples of toxic practices
the achievement of the following ISO standards, becoming a and cultures come to mind. The Knowledge is your friend in many instances overlap. It is
not always obvious what these
governance outcomes: signatory to the United Nations recent release of the review report Part of good corporate governance
Global Compact (UNGC), highlighting gender discrimination issues may be, especially when
■ Ethical culture becoming a member of industry and abuse by Rio Tinto shook the is knowing what information and they are more long term and
■ Good performance or sector associations and corporate world. The review was knowledge are required to get the further removed from the direct
job done. Make sure your employees
■ Effective control commit to implement their best conducted by former Australian are empowered with information operations of the company.
■ Legitimacy practice guidelines. Sex Discrimination Commissioner and actionable knowledge. They To start the conversation, or join
External integrated reporting, Elizabeth Broderick, and need to know where and how to an existing one, the governing
What does that mean? identified instances of bullying, body should have the required level
linked to the company’s internal get the relevant information to
At the heart of it, corporate reporting assists with identifying sexual harassment, racism and use their skills and expertise to of information and understanding
other forms of discrimination
governance deals with leadership. and explaining the key issues throughout Rio Tinto. take good decisions in the best of the specific issue. It is the
How does the governing body important to the company that interest of the company and its responsibility of management, and
of the company or organisation will enable the company to Of interest was the leadership’s stakeholders. If you have identified in particular the company secretary
lead, guide and set the direction to achieve its strategic objectives. response to the report. It chose an information or knowledge gap, or governance officer to ensure
achieve the strategic objectives and There are numerous integrated to make the review report address the issue through internal that correct, complete, timeous
outcomes the company wishes to and sustainability reporting publicly available, accepted and external sources of information. and decision-useful information
achieve? King IV identifies four key frameworks to consider, which can all 26 recommendations and If such information or knowledge is provided to the governing body.
outcomes, as set out above. It will However, the governing body is
not be enough to just achieve one or also responsible to keep up to date
two outcomes, but it is imperative with issues that may affect the
company, its business operations
to achieve all four. In fact, these and stakeholders, whether directly
outcomes are so intricately
connected and interlinked, that the or indirectly.
one cannot be achieved without the Examples of such conversations
other*. These outcomes are part of would include serious global risks,
the ecosystem of the company. including the Covid-19 pandemic
and its systemic socio-economic
How to interpret corporate impacts, the recent unprovoked
governance? Russian invasion of the Ukraine,
Corporate governance can be climate change, social incohesion,
considered from many angles and inequality and poverty, especially
perspectives. One such perspective in a country such as South
is the dichotomous nature of Africa. Other issues include more
corporate governance. It comprises regional, industry-specific and
both tangible and intangible company-specific issues. The
elements and characteristics. governing body should ensure that
these issues are incorporated into
Tangible Elements the strategy and operations of the
The tangible portion deals with company as may be appropriate,
and reported to its stakeholders,
the more visible, structural aspects assist the company in integrating committed to implement all of is not present in the company, forge where required.
and primarily drive and enable the Environmental, Social and them. The company will focus on partnerships or collaborations to
outcomes of good performance fill the gap. Alternatively join an Corporate governance is not
and effective control. These Governance (ESG) aspects into its three specific aspects: industry or sector association. In rocket science – it is mostly
strategy and business plan.
would include the governance ■ The company’s leadership the case of specialised information common sense. However, for good
hierarchy, roles, responsibilities, Intangible Elements committed to create a safe, and knowledge, a company could corporate governance to work
processes, structures, standards, respectful and inclusive partner with a university or relevant in practice, it takes discipline,
methodologies that companies use The intangible relates to the working environment to tertiary institution. dedication, commitment, a lot of
to organise themselves towards culture and ethics of the company prevent harmful behaviours courage and tenacity and the will
achieving their strategic objectives. – “how we do things around and better support the more Efficient and effective information to follow through, especially when
Examples include how the here” or “the vibe” and generally vulnerable in the company. flow within the company, and faced with a difficult situation
company’s decision-making forums reflects the DNA of the company. This includes focus on greater externally with its stakeholders, are when the right decision will require
crucial to the proper functioning of
and organs are structured to enable An ethical culture is essential to diversity. some sacrifice. 
effective and efficient decision- create and maintain a company’s the company. Create information
making. Who is accountable and legitimacy, or its recognised ■ Working on the safety and and knowledge hubs within the *For more information on King 4
responsible for what? How is the standing in society. It ensures its inclusivity of the company’s company and foster a culture of peer please see page 16
learning and sharing. Establishing
divide between accountability and social licence to operate and is camp and village facilities. self-organising Communities E: cathie@earth-energy.co.za
responsibility structured? How easy closely related to its good name ■ Enabling the ability for all of Practice (CoP) is an excellent
or difficult is it to communicate and reputation. What is the level people to point out way of empowering employees to
in the company? How effective or of trust that the stakeholders have unacceptable behaviours, improve their innovative problem
ineffective is information flow? in the company? What are the raising the flag when such solving skills. At the end of the day
What are the mechanisms in types of relationships the company instances occur and to receive leadership wants employees who are
place to ensure decisions taken are has and fosters? Are mutually support. willing and able to take proactive
implemented, and how effective is respectful relationships important action and addressing problems in SCAN
the review and monitoring of the to the company? How does the The CEO, Jakob Stausholm a more inclusive and collaborative QR CODE
implementation process? company trade off the needs, wants chose to take accountability TO SEE
and expectations of its various and responsibility for the toxic way, which generally may result
This is an area where corporate stakeholders, especially under culture of Rio Tinto and is in quicker and more sustainable VIDEO
governance can become your best times of pressure and stress? The actively addressing the findings. solutions.

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