Finance Minister Trevor Manuel has called for a deepening of corporate governance and accountability. His comments coincided with more details being released on SA’s African Peer Review Mechanism report, which also emphasised a need to improve corporate governance, writes E-Brief News.

Manuel said there was shared interest as citizens, as responsible inhabitants of an abused planet, in being partners in the challenge of creating a fairer world in which opportunity and assets were more broadly held. ‘These shared interests will not be addressed by corporations acting and keeping with their narrow self interest, nor can they be addressed by governments acting alone or even by governments and public international organisations acting in concert internationally.’ Manuel was addressing the annual conference of the International Corporate Governance Network at the International Convention Centre in Cape Town, notes a report on the Business Report site. Manuel said they also required a broader concept of corporate responsibility than the idea of governance that currently enjoyed popular currency. ‘Just as we exist as human beings, through others, so also the responsible corporation has its identity in part through the values and commitment it shares with others.’ The corporate extravagance that captured headlines in more recent times had perhaps more often involved financial treachery than human brutality. But it was still the case in the 21st century that respected corporations took advantage of exploitative labour conditions or weak environmental standards in developing countries.
Full report on Business Report site

Manuel’s comments coincided with President Thabo Mbeki’s statement on SA’s APRM report, which he presented to the AU summit in Ghana this week. The Review Report recognised 18 South African best practices, Mbeki said, including co-operative governance, popular participatory governance practices, achievements of SARS, the Johannesburg Securities Exchange, the JSE and Triple Bottom Line Reporting, the Financial Service Charter and the King Reports, among others. According to a statement on the Government Information Services site, SA raised concerns around the panel's approach. Mbeki emphasised that the concerns were raised in the spirit of peer review and genuine debate and dialogue, but did not amount to a rejection of the report. With respect to corporate governance, the Programme of Action contains actions to address challenges: including company legislation not being transformative and requiring review; the underdevelopment of key institutions and certain social groups; the failure by consumers and shareholders to assert their rights and the need to develop strong corporate governance in civil society organisations. But Mbeki was cautious about the report, notes Business Report, particularly in regard to comments on the need to fight corruption more effectively and to better engage communities to tackle rising crime and violence.
Full Government Information Services statement
Full report in Business Report

Mbeki has been criticised again over the government’s dealing with the review. The government has been accused of being obsessed with its image and failing to make the Peer Review process in SA inclusionary. The criticism, notes Business Day, comes from South African NGO Coalition executive director Hassen Lorgat, who said there was no sense of an inclusive national programme of action. The process should have been a major issue in SA, but lost space to the recent ANC conference. Lorgat said the review had missed out on an opportunity to develop a national programme of action in which everyone could participate. He said the government was obsessed with looking good. Public Service Minister Geraldine Fraser-Moleketi, chairperson of the National Governing Council leading the APRM in SA, refused last month to show civil society partners the final version of SA’s APRM programme of action before it was presented to heads of state in Ghana. This week, she said SA might see the report within six months of its review.
Full Business Day report

Issues of corporate governance have also surfaced in a spat between Barloworld and leading businessman Brian Molefe. Barloworld responded to Molefe’s attacks on one of the independent directors on its board, Mike Levett, by saying it believes it has complied with local and international codes of corporate governance. Molefe, CE of Barloworld’s major shareholder, the Public Investment Corporation, implied in earlier comments that Levett might lack independence after serving 22 years on the board. The position of other independent directors, such as Eddie Theron, who has served more than 10 years on the board, could also hang in the balance, notes a Business Day report. It says this is the third time in six months that Molefe has criticised decisions by the company. Sibani Mngomezulu, group executive for governance and corporate affairs, said in response to Molefe’s latest comments: ‘The positions of individual directors on the company’s board (are) fully compliant with King 2 codes of corporate governance and are cognisant of international standards. The company will obviously take regard of what our shareholders say.’ Tony Dixon, executive director of the Institute of Directors, said a clear definition of an independent director was needed. The second King report was vague, he said. ‘It says things like you cannot be related to anyone in the company, or have a significant contractual relationship with the company or group. It has been silent on issues like the length of time a director should serve.’ Dixon said there was much debate on whether it would benefit companies to set a time limit for non-executive directors.
Full report in Business Day

A senior governance analyst has emphasised the importance of disclosure. Forcing fund managers to disclose how they voted at annual general meetings would increase the returns for those with pension funds, argues David Couldridge, senior governance analyst at Frater Asset Management, one of only two SA fund managers that publicly discloses how it votes at annual general meetings, in a Business Day report. He was responding to comments made by Stephen Davis, a spec ialist in international corporate governance, who said last week people with pension funds lost on average 3% of the value of their pension thanks to a lack of governance on the part of the fund managers. He said shareholder activism and transparency from fund managers was the key to better returns, the reining in of executive pay and, subsequently, improved social cohesion. Couldridge said more transparency from fund managers would mean trustees would insist that asset managers considered the longer term more often and that they steered clear of a ‘ridiculous short-term focus’. He said the amount of trading asset managers had to do to suit a shorter-term focus destroyed some of the value of the funds they were managing.
Full Business Day report