Southern Africa Division

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Southern Africa Division Centenary
Conference September 2009 Better Boardroom
Behaviour Seamus Gillen BA(Hons) MBA
FCIS Senior Policy Adviser ICSA UK
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ICSAs focus

• Risk
• Board Support
• Boardroom Behaviours

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Business case for best practice governance
Benefit best practice governance as a
business facilitator and not a business killer.
The value proposition maintain and grow the
legitimacy, credibility and capability of the
company to deliver the business plan and
strategy Failure failure to perform at a
satisfactory level can carry negative
consequences. Behavioural change in the
Boardroom will also be driven by taking account
of directors duties, responsibilities and
potential liabilities  
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Regulators views on risk
Walker ..board level engagement in the
high-level risk process should be materially
increased with particular attention to the
monitoring of risk and discussion leading to
decisions on the entitys risk appetite and
tolerance FRC Should the boards
responsibility for strategic risks and setting
risk appetite as set out in the Turnbull
Guidance be made more explicit in the Code? Is
the current balance between the Code and the
Guidance right?
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The Institutes view on the Secretary
The Code should encourage the establishment in
listed companies of an adequately resourced
company secretariat, headed by a company
secretary appropriately experienced in matters of
law, regulation, secretaryship, accounting,
business finance, strategy, ethics and
governance, with a reporting line to the chairman.
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The Regulators view on the Secretary
FRC The role of the company secretary was
considered important to the effective functioning
of the board. Various proposals were put forward
for increasing its effectiveness, for example
through greater resource, more clearly defined
responsibilities or a change of reporting lines.
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The Regulators view on the Secretary
Walker There has been extensive comment to
this Review on the importance of assuring fully
adequate and dedicated internal support for NEDs.
A practical process, used in several cases, is
through installation of a dedicated resource
under the group secretary which can also
coordinate arrangements for induction and
training. Where the group secretariat is the
focal point for such support, adequate resourcing
in terms of available time commitment and
capability will be required. external
(adviser) involvement would be unlikely to
provide more continuously dependable support than
that provided by the company secretariat ...
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Reputational risk the ultimate driver
Improvements in behavioural practice will also be
built on a deeper understanding of the relevance
of, and emphasis on, culture, vision and values
informed, in turn, by greater buy-in to the
importance of the relationship between issues of
disclosure, transparency, accountability,
confidence and trust. Business-critical areas as
much for Boards operating in steady state as for
those contemplating strategic or corporate
change.
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Regulators views on behaviours
Walker principal deficiencies in bank
boards related much more to patterns of behaviour
than to organisation. The most critical need is
for an environment in which effective challenge
of the executive is expected and achieved in the
boardroom...As part of their role as members of
the unitary board of a bank, NEDs should be
ready, able and encouraged to challenge and test
proposals on strategy put forward by the
executive....
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Regulators views on behaviours
FRC There is a recognition that the quality of
corporate governance ultimately depends on
behaviour not process, with the result that there
is a limit to the extent to which any regulatory
framework can deliver good governance...
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Regulators views on behaviours
FRC Should the FRC give further clarification of
the role, key responsibilities and expected
behaviours of the Chairman, the Senior
Independent Director and the NEDS in the Code or
in non-binding guidance?
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London Times and the Financial Times.
graphic
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Business case for best practice governance
Maintain and grow the legitimacy,
credibility and capability of the company to
deliver the business plan and strategy  
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Raising the issues which matter

• need to strengthen process on risk and board
  support
• missing piece in the governance jigsaw
  boardroom
• behaviours
• business case for best practice governance
• importance of the concepts of director benefit
  and
• failure reputation risk the relevance of
  culture, vision,
• values, transparency and trust
• case for the presence at the centre of the
  boardroom of
• a secretary with the essential skills needed
  to ensure best
• practice governance practice
• high-profile and prestigious awards scheme to
  reward
• improved standards in disclosure (and,
  ultimately, in
• governance performance)