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 More ethical leadership and legitimacy needed in boardrooms

2017-08-17 00:00
by MediaVision on behalf of USB-ED

Prof Marc Le Menestrel (visiting professor of Ethics at INSEAD Business School and co- director of the programme), Dr Lulu Gwagwa (CEO of Lereko Investments and guest speaker), Prof Arnold Smit (co-director of the programme) and Anya Frey (Executive Director at Global Load Control, and EDP alumnus, attending ADP this year).

The focus around the boardroom table of companies tend to be on good performance and effective control, but an ethical leadership culture and legitimacy seems to be underplayed.


This is while the latter two subjects are now the new big issues globally and locally, and highlighted in the King Report on an equal footing.


Two important questions beg to be answered around boardroom tables today, especially in the current political environment in South Africa. Is there clarity for what a company stands for? Secondly, do decisions taken lower down in a company relate to directors sitting on a board higher up?


Setting on culture in a company about the "way of doing business" has become critical and boards should know that they remain accountable for decisions taken at lower levels. The buck stops with them.


This is according to Dr Nolulamo (Lulu) Gwagwa who was recently the guest speaker at the opening of the Africa Directors Programme (ADP) presented by USB Executive Development (Pty) Ltd, USB-ED, the private executive development company of Stellenbosch University.


Dr Gwagwa, who serves as a non-executive director on several boards and is currently the CEO of Lereko Investments, completed the ADP in 2016.


The programme, being presented in Stellenbosch, was designed and is presented by governance and leadership experts with international experience. It has the Old Mutual Investment Group as corporate partner, as well as the involvement of the esteemed INSEAD Corporate Governance Initiative with its world renowned International Directors Programme, the USB Centre for Corporate Governance in Africa and the IoDSA.


She said the directors of companies always have to ask in what environment are they operating in. Currently that environment - locally and globally - is characterised by political and economic instability, disruptive technologies and climate change.


"Then we are also employing millennials, who are loyal to no one and only loyal to ideas. They do not care about going up the ranks in a company.


"The role of boards have never been as important as in this environment. But at the same time boards are seen as the weakest link in the capitalistic chain to pull things together. The big question boards should ask themselves is if they indeed add value to the company?"

Sitting around a table, directors should not only draw on their technical capabilities – there is a management team for that. They should go beyond that and really add value by providing guidance.


"Also of great importance is the particular dynamic that women bring to a boardroom table. Experience has taught me that there should at least be three woman around the table to have an impact and to change the culture in a boardroom."


The role of the chairperson in managing boardroom dynamics and leadership in making effective decisions is key. Also, setting the agenda for the board is of major importance.


"If it is found that an agenda has already been set by the chairperson before any discussions around the table, I as a director would consider resigning from that board. My feeling in this regard is simply that I do not 'own' decisions that are made.


This is especially a danger at public enterprises where chairpersons are mostly appointed by a minister in the government."


Programme facilitator of the ADP on USB-ED's behalf, Prof Arnold Smit, said that "Dr Gwagwa exemplifies the integrity and competence we need today in the boardrooms of companies and state-owned enterprises. With such an approach boards will be better able to fulfil their fiduciary duties and instil a culture of trust and achievement in the organisations they govern".


For enquiries about the Africa Directors Programme, please contact Zahn de Bruyn at +27 (0)21 918 4350 or USB-ED website:

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Africa; Courses / Programmes; Executive Development; Leadership; Partnerships