Institute of Directors

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CSIG
ANN
Institute of Directors in  Southern Africa
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Tony DixonExecutive Director
Presents Corporate Governance A
Question of Balance Friday 9th September 2005
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Corporate Governance

• Corporate Governance is concerned with holding
  the balance
• between economic social goals and
• between individual communal goals

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Corporate Governance

• The aim is to align
• as nearly as possible
• the interests of individuals,
• corporations
• and society
• Sir Adrian Cadbury

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Governance applies to all organisations

• Government
• Municipalities
• Schools
• Companies
• Sporting bodies (etc.)
• ALL INVOLVED !!

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Corporate Governance

• Governance

Balance
What is fair
Sustainability
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• Stakeholders
• Schools, clubs, sub-unions, players, coaches,
  fitness trainers, medical staff, officials,
  administrators
• Spectators, hospitality industry
• Community at large

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History

• Birth of multi-shareholder companies
• Industrial Revolution
• The age of the worker
• The age of management

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Own Scandals

• Masterbond
• MacMed
• Regal Treasury Bank
• Leisurenet
• R1.2 Billion summons

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Corporate Governance

• Why did these companies fail ?
• Is the model sustainable ?

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The Future

• New Leadership Style
• Humility
• Team Builders
• Good to Great
• Greater Stakeholder Activism
• Longer Periods of Sustainability

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Corporate Governance

• Why
• Corporate
• Governance
• is
• vital to
• South Africa

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Corporate Governance

• Alleviate key problems of housing, health,
  education and unemployment
• Need growth rate of 6 per annum

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Foreign Direct Investment

• 7 million - homeless
• 4 million - HIV/AIDS
• 12 million - school pupils
• 580 000 - University / Technikon
• 14 million - economically active
• 30 - of population unemployed
• 45 million - total population

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Head Start

• Powerhouse of Africa
• GDP
• Africa - US 420 billion
• South Africa - US 113 billion
• Nigeria - US 62 billion
• Zimbabwe - US 9 billion
• Australia - US 368 billion

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Africa - Perception

• Unstable
• Corrupt
• Crime ridden
• Susceptible to despotic rule
• South Africa contaminated by this perception

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South Africa Reality

• Stable economy
• Sound macro economic policy
• Outstanding constitution
• World class infrastructure
• Banking system top 10 in the world
• Cellular networks ?
• Sasol oil from coal

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Corporate Governance

• Good governance
• Good business sense
• McKinseys Deutsche Bank

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Foreign Direct Investment

• If a country does not have a reputation for
  strong governance, capital flows elsewhere
• If investors are not confident with the level of
  disclosure, money will flow elsewhere
• If a country opts for lax accounting and
  reporting standards, capital will flow elsewhere

Arthur Levitt
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Foreign Direct Investment

• If a country is over regulated making it
  difficult rather than simple for enterprise to
  flourish, capital will flow elsewhere
• If a countrys rates of tax are too high,
  capital will flow elsewhere
• If crime and corruption are at unacceptable
  levels, capital will flow elsewhere

Tony Dixon
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Solutions

• Proudly South African
• King II This is how we do business
• Zero tolerance non compliance
• Let entrepreneurs do what they do best

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ANNUAL CONFERENCE
Institute of Directors in  Southern Africa