Stephen Sadie, CGISA CEO

As I interact with people in different social settings, I find many of them quite curious about our Institute,
what it does and how it fits into the broader governance landscape. These days everyone has an opinion
on corporate governance. It has become a topic for conversations in Southern Africa. It happens around
dinner tables, at work, and at weekend braais. This CEO’s message will elaborate on these issues.

Corporate governance qualification

We are an education and qualifications body that trains our students to become fully fledged
professionals. Our robust curriculum and stringent examinations and assessment processes mean that
when our members are employed, an organisation has the appropriate resources to be properly
governed.

Our qualification is an NQF 8 level (honours level) qualification. We offer the premier corporate
governance qualification in Southern Africa. It’s not the kind of thing you can do on a one-day training
course. Our rigorous qualification provides a strong foundation for the kind of challenges company
secretaries and governance professionals may face in their career.

We have two titles – chartered secretary and chartered governance professional. What this means is that
some people are interested in corporate governance but do not want to be a company secretary. So,
governance professionals include people such as governance advisers, compliance officers, risk
managers, legal counsel, non-executive directors, accountants, finance managers, CEOs, etc. Some
people are confused about what the term ‘chartered’ means. It simply means our Institute has a charter
which has been signed off by the King or the Queen of England.

And we have two entry points – those who have a degree and those who have matric. If they have a
matric certificate, they need to take 11 subjects. If they already have a degree, they can proceed directly
to the board stream which features six subjects. Throughout the student process, we support our
students by providing the curriculum and study materials to become the best-grounded governance
professional that they can be. When they graduate, we onboard them as members so that they become
part of a network of company secretaries and governance professionals.

Membership

The Institute is a leader in corporate governance. It is a premier, inclusive representative body for company
secretaries and governance professionals. Our Institute in Southern Africa is part of the CGI Global, which
has nine divisions around the world consisting of 28 000 members. It has existed in Southern Africa for 117
years making it one of the oldest professional bodies in Southern Africa.
The intrinsic value of membership is that one gets to learn about corporate governance as a student. Once a
student graduates to becoming a member, then the member continues learning about corporate
governance as lifelong learning. In this process a member becomes part of a supportive community of
company secretaries and governance professionals.

In terms of the Companies Act, both listed companies and state-owned companies must have a company
secretary. There are about 300 listed companies and about 800 state-owned companies in SA. However,
there are a whole range of other organisations, who also employ company secretaries or governance
professionals because of the importance of the role.

The role of the company secretary is way more than just taking minutes. The profession is an opportunity to
impact how each organisation is governed and contribute to its success. Company secretaries work at a
board level, engaging with non-executive directors and senior executives. Company secretaries and
governance professionals are the sounding board on good governance that guide the boards in making
informed and ethical decisions to keep things on track.

State of governance

At the moment we’re seeing a lot of negative press around governance in municipalities. Poor governance
inevitably ends up as poor service delivery such as water shortages, electricity outages, potholes, broken
traffic lights, and uncollected waste. This points to the very important consideration that must be given to
developing good governance structures and accountability. These problems lead to a great inconvenience
for ordinary citizens and companies alike. These issues have become prominent due to the forthcoming
municipal elections in November.

The metropoles have developed municipal-owned entities – in Johannesburg, residents interact with Jhb
Water, City Power, JRA, Pikitup, City Parks etc. They all have boards of directors who are well remunerated.
Many of their CEOs earn salaries way above what the president earns. These entities are responsible for
driving governance but too many obviously haven’t been able to. And this is a governance issue. We are not
engineers. We can’t comment on engineering matters such as how to fix our pipes, but we can comment on
the governance issues. And if the governance had been done properly over the past few years, we would
not be having all these challenges.

We have witnessed governance problems at national and provincial level as well, where we also strive to
contribute by supporting governance professionals in the public sector where many of our members work.
We help to make sure that there are people in the public sector who are able to place the right focus on the
right areas when it comes to making decisions and doing them ethically and responsibly.

Having said that, we observe poor governance across private entities as well – and when that information
becomes public, it results in corporate and personal reputational loss, which affects operations and the
bottom line. Poor governance is expensive and wasteful. We have had our fair share of private sector
governance lapses such as Steinhoff, Tongaat Hulett, African Bank, EOH, KPMG to name a few. On the
other hand, some of our listed companies are actually very good on corporate governance. They’re well
known internationally and some have won awards both locally and internationally.

We must examine this: on the one hand, we have one of the world’s best corporate governance codes –
the King Code. On the other hand, we have very poor levels of governance. So, we have this big dichotomy
between the King Code and what happens in practice and in reality. The challenge facing company
secretaries and governance professionals is to close this gap.

Artificial intelligence | AI

One of the biggest challenges facing companies currently is the issue of artificial intelligence. AI is a game
changer and a great accelerator for growth. It allows for productivity gains and helps companies increase
their profits. However, there are major ethical issues that we need to think about when it comes to AI and
its use – hence the need for ongoing education and exposing company secretaries and governance
professionals to its benefits and pitfalls.

A particular area of interest for company secretaries is the use of AI in minute-taking. There are a number of
AI tools for minute-taking on the market. However, security issues are a concern depending on which
particular AI tool you use. AI sometimes hallucinates and provides case law that actually doesn’t exist. In
general, company secretaries are experimenting with AI and mostly trying to get up to speed on it.
As an Institute, we are passionate about corporate governance and encourage all company secretaries and
governance professionals to join us and reap the benefits of membership. Together we are stronger!