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IOL News
2 days ago
- Business
- IOL News
Reimagining global trust: when truth isn't enough
As the digital age accelerates, the need to rebuild trust in data, governance and institutions grows more urgent. Image: AI Lab Trust is no longer just a social virtue. It is the operating system of modern society. Whether navigating a job search, accessing a social grant or questioning an election result, citizens rely on public data to make life-altering decisions. Yet across the globe, this trust is eroding. The 2025 Edelman Trust Barometer found that 80% of people distrust information they encounter online. By 2030, 90% of humanity will be digitally connected but half will lack confidence in the systems that connect them. Trust has become both a currency and a casualty of the digital age. South Africa is no exception. In 2022, fake notices claiming that social grants would be suspended or reduced went viral on Facebook and TikTok, sparking widespread panic among vulnerable households. Despite SASSA's swift clarification, the misinformation revealed a deeper problem: when public data is unclear or inaccessible, trust quickly unravels. This erosion of trust is more than reputational. It is a barrier to investment, a risk to democratic stability and a threat to inclusive development. The South African Chamber of Commerce and Industry estimates that mistrust in public institutions and data has cost the country R10 billion in annual investment and reduced GDP growth by 0.5%. Statistics South Africa is internationally recognised as the continent's leading statistical agency. Whilst in the 2022 Census and its most recent account of the nation it had a very high undercount, it transparently provided an account of where and how it got the high undercount and accordingly adjusted for this global record in undercount of population where estimates of undercount are undertaken. However, the recent out-of-the-blue public discourse of unemployment, including attendant reactions by influential figures, has highlighted a persistent challenge: not limited to the credibility of the data itself but unfounded allegations on methodological flaws, in how it is explained and understood across society. This misplaced critique by some in business and in politics is damaging for absolutely no sound science and represents deliberate smirching that will make the grey listing South Africa has had look like a kindergarten picnic. It undermines a credible and deserved opportunity to leverage statistical excellence as a means of bolstering public confidence and deepening civic participation. The situation is compounded by a long history of policy fatigue. Since 1994, more than seventy national development strategies have been launched but fewer than 15% offer publicly accessible closeout reports, according to a 2024 policy implementation review by the African Journal of Public Administration. These reports may exist in government archives or departmental repositories but their inaccessibility feeds perceptions of opacity and weakens accountability. In any healthy democracy, information must not only be available but also understandable. South Africa does not lack good institutions. It lacks systems that convert institutional excellence into public confidence. As the digital age accelerates, the need to rebuild trust in data, governance and institutions grows more urgent. But doing so requires more than digital tools. It demands public intelligibility. That is where artificial intelligence, if ethically governed, offers a real opportunity. Emerging technologies can help turn information into interpretation and interpretation into interaction. Yet they must be deployed not just for automation but for inclusion. For instance, mobile-first dashboards could simplify national statistics into plain-language summaries, charts and visual explainers. With over 80% mobile phone penetration in South Africa, scalable access is feasible. digital platform drove a 20% rise in public engagement. In rural areas, where 43% of people remain offline, community-based 'data ambassadors' could offer low-bandwidth formats in schools, clinics and cooperatives, drawing on models proven in Rwanda and Kenya. Other opportunities include AI-powered scorecards that track delivery, performance and budget discrepancies across departments. Rwanda's use of public performance scorecards improved district delivery by 25%, while Kenya's Presidential Delivery Tracker provides a live view of government performance. In South Africa, Auditor General and DPME systems could be enhanced in similar ways, turning technical reports into simplified, citizen facing updates. However, technology alone will not rebuild trust. That is why a national data literacy effort is needed to close the gap between statistical production and public understanding. According to the Human Sciences Research Council, only 35% of South Africans can interpret basic statistical information. This knowledge gap allows misinformation to flourish and reduces the public utility of even the most rigorous data. Bridging this divide would involve three key interventions: First, simplified digital dashboards, aligned with multilingual and mobile access, must be designed to meet people where they are. Second, civil society and public institutions can partner to train 'community data ambassadors' who explain government information in offline and under connected spaces. Third, youth engagement tools, such as AI-powered chatbots, could be embedded in schools and civic education programmes, making national data interactive, understandable and engaging. Research shows that data-literate citizens are 30% less likely to spread misinformation and far more likely to engage constructively in civic life. Boosting national data literacy from 35% to 50% by 2030 is both feasible and transformative. It would also counteract the growing threat of AI-generated disinformation, deepfakes and digitally enabled manipulation. Economically, the stakes are high. McKinsey estimates that trust-enhancing reforms could add $3 trillion to global GDP. In South Africa, restoring public confidence in government data and performance could unlock billions in investment, improve budgeting transparency and reduce the social costs of disinformation. Metrics matter. Dashboards, citizen feedback tools and real-time transparency indices, continuously updated, could help track government performance, institutional reliability and civic confidence. These are not distant ideas. Rwanda's governance benchmarks and the AUCPCC scorecard have already demonstrated that trust itself can be measured. Sceptics may argue that South Africa lacks the infrastructure, political alignment or financial capacity to pursue such a path. But this view underestimates what already exists. The country has five undersea fibre-optic cables, a growing digital talent base and internationally respected institutions such as Stats SA and the CSIR. It has strong privacy legislation in the form of POPIA. And it has civic platforms like Vulekamali already proving the appetite for accessible data. Trust does not require perfection. It requires participation. As the G20 confronts rising digital inequality and public scepticism worldwide, South Africa can lead not just in technological capability but in democratic design. The future will not belong to the most connected. It will belong to the most trusted. Nomvula Zeldah Mabuza is a Risk Governance and Compliance Specialist with extensive experience in strategic risk and industrial operations. She holds a Diploma in Business Management (Accounting) from Brunel University, UK, and is an MBA candidate at Henley Business School, South Africa. Nomvula Zeldah Mabuza is a Risk Governance and Compliance Specialist with extensive experience in strategic risk and industrial operations. She holds a Diploma in Business Management (Accounting) from Brunel University, UK, and is an MBA candidate at Henley Business School, South Africa. Image: Supplied
IOL News
2 days ago
- Business
- IOL News
Reimagining global trust: when truth isn't enough
As the digital age accelerates, the need to rebuild trust in data, governance and institutions grows more urgent. Image: AI Lab Trust is no longer just a social virtue. It is the operating system of modern society. Whether navigating a job search, accessing a social grant or questioning an election result, citizens rely on public data to make life-altering decisions. Yet across the globe, this trust is eroding. The 2025 Edelman Trust Barometer found that 80% of people distrust information they encounter online. By 2030, 90% of humanity will be digitally connected but half will lack confidence in the systems that connect them. Trust has become both a currency and a casualty of the digital age. South Africa is no exception. In 2022, fake notices claiming that social grants would be suspended or reduced went viral on Facebook and TikTok, sparking widespread panic among vulnerable households. Despite SASSA's swift clarification, the misinformation revealed a deeper problem: when public data is unclear or inaccessible, trust quickly unravels. This erosion of trust is more than reputational. It is a barrier to investment, a risk to democratic stability and a threat to inclusive development. The South African Chamber of Commerce and Industry estimates that mistrust in public institutions and data has cost the country R10 billion in annual investment and reduced GDP growth by 0.5%. Statistics South Africa is internationally recognised as the continent's leading statistical agency. Whilst in the 2022 Census and its most recent account of the nation it had a very high undercount, it transparently provided an account of where and how it got the high undercount and accordingly adjusted for this global record in undercount of population where estimates of undercount are undertaken. However, the recent out-of-the-blue public discourse of unemployment, including attendant reactions by influential figures, has highlighted a persistent challenge: not limited to the credibility of the data itself but unfounded allegations on methodological flaws, in how it is explained and understood across society. This misplaced critique by some in business and in politics is damaging for absolutely no sound science and represents deliberate smirching that will make the grey listing South Africa has had look like a kindergarten picnic. It undermines a credible and deserved opportunity to leverage statistical excellence as a means of bolstering public confidence and deepening civic participation. The situation is compounded by a long history of policy fatigue. Since 1994, more than seventy national development strategies have been launched but fewer than 15% offer publicly accessible closeout reports, according to a 2024 policy implementation review by the African Journal of Public Administration. These reports may exist in government archives or departmental repositories but their inaccessibility feeds perceptions of opacity and weakens accountability. In any healthy democracy, information must not only be available but also understandable. South Africa does not lack good institutions. It lacks systems that convert institutional excellence into public confidence. As the digital age accelerates, the need to rebuild trust in data, governance and institutions grows more urgent. But doing so requires more than digital tools. It demands public intelligibility. That is where artificial intelligence, if ethically governed, offers a real opportunity. Emerging technologies can help turn information into interpretation and interpretation into interaction. Yet they must be deployed not just for automation but for inclusion. For instance, mobile-first dashboards could simplify national statistics into plain-language summaries, charts and visual explainers. With over 80% mobile phone penetration in South Africa, scalable access is feasible. digital platform drove a 20% rise in public engagement. In rural areas, where 43% of people remain offline, community-based 'data ambassadors' could offer low-bandwidth formats in schools, clinics and cooperatives, drawing on models proven in Rwanda and Kenya. Other opportunities include AI-powered scorecards that track delivery, performance and budget discrepancies across departments. Rwanda's use of public performance scorecards improved district delivery by 25%, while Kenya's Presidential Delivery Tracker provides a live view of government performance. In South Africa, Auditor General and DPME systems could be enhanced in similar ways, turning technical reports into simplified, citizen facing updates. However, technology alone will not rebuild trust. That is why a national data literacy effort is needed to close the gap between statistical production and public understanding. According to the Human Sciences Research Council, only 35% of South Africans can interpret basic statistical information. This knowledge gap allows misinformation to flourish and reduces the public utility of even the most rigorous data. Bridging this divide would involve three key interventions: First, simplified digital dashboards, aligned with multilingual and mobile access, must be designed to meet people where they are. Second, civil society and public institutions can partner to train 'community data ambassadors' who explain government information in offline and under connected spaces. Third, youth engagement tools, such as AI-powered chatbots, could be embedded in schools and civic education programmes, making national data interactive, understandable and engaging. Research shows that data-literate citizens are 30% less likely to spread misinformation and far more likely to engage constructively in civic life. Boosting national data literacy from 35% to 50% by 2030 is both feasible and transformative. It would also counteract the growing threat of AI-generated disinformation, deepfakes and digitally enabled manipulation. Economically, the stakes are high. McKinsey estimates that trust-enhancing reforms could add $3 trillion to global GDP. In South Africa, restoring public confidence in government data and performance could unlock billions in investment, improve budgeting transparency and reduce the social costs of disinformation. Metrics matter. Dashboards, citizen feedback tools and real-time transparency indices, continuously updated, could help track government performance, institutional reliability and civic confidence. These are not distant ideas. Rwanda's governance benchmarks and the AUCPCC scorecard have already demonstrated that trust itself can be measured. Sceptics may argue that South Africa lacks the infrastructure, political alignment or financial capacity to pursue such a path. But this view underestimates what already exists. The country has five undersea fibre-optic cables, a growing digital talent base and internationally respected institutions such as Stats SA and the CSIR. It has strong privacy legislation in the form of POPIA. And it has civic platforms like Vulekamali already proving the appetite for accessible data. Trust does not require perfection. It requires participation. As the G20 confronts rising digital inequality and public scepticism worldwide, South Africa can lead not just in technological capability but in democratic design. The future will not belong to the most connected. It will belong to the most trusted. Nomvula Zeldah Mabuza is a Risk Governance and Compliance Specialist with extensive experience in strategic risk and industrial operations. She holds a Diploma in Business Management (Accounting) from Brunel University, UK, and is an MBA candidate at Henley Business School, South Africa. Nomvula Zeldah Mabuza is a Risk Governance and Compliance Specialist with extensive experience in strategic risk and industrial operations. She holds a Diploma in Business Management (Accounting) from Brunel University, UK, and is an MBA candidate at Henley Business School, South Africa. Image: Supplied
IOL News
2 days ago
- Business
- IOL News
Unsung power: the strategic role of the Company Secretary
Far from being a mere administrator, the CoSec is the custodian of governance, the interpreter of legislation, and the quiet force that holds the board together. Image: AI Lab By Nqobani Mzizi A board's effectiveness is often judged by the calibre of its directors, the quality of their decisions and the outcomes they deliver. Yet behind every well-functioning board is an unsung enabler: the Company Secretary (CoSec). Far from being a mere administrator, the CoSec is the custodian of governance, the interpreter of legislation, and the quiet force that holds the board together. Their influence shapes not only how the board operates but also how it aligns with its regulatory and ethical obligations. While the statutory duties of the CoSec may include minute-taking, maintaining records, and certifying compliance with rules and legislation, the role goes far beyond these functions. A proficient CoSec provides ongoing governance advisory to the board and its committees, facilitates director induction and training, and ensures that board performance evaluations are both credible and constructive. In South Africa, the Company Secretary's role is well entrenched in the Companies Act (No.71 of 2008), which provides a statutory foundation for their appointment, duties and liabilities. The Act mandates that every public company must appoint a Company Secretary who is suitably qualified and experienced, and who must remain accountable to the board as a whole. Further reinforcement comes from King IV, which elevates the CoSec's responsibilities beyond compliance, positioning them as an architect of ethical and effective governance practices. Principle 10 underscores their critical role in ensuring board efficiency, mandating that they serve as a central source of guidance on governance, legislation, and ethics. It also emphasises the importance of independence, calling for a direct reporting line to the Chairperson and the Board, affirming their role as an officer of governance rather than a tool of management. For listed companies, the JSE Listings Requirements add another layer of accountability. These require the board to consider and confirm annually that the CoSec has the competence, qualifications and independence to perform the duties effectively. This annual assessment underscores the strategic and technical nature of the role, while creating a measure of public accountability. Together, these frameworks have helped professionalise the role of the Company Secretary, placing it at the heart of corporate governance, supporting board effectiveness and ensuring compliance. They also create the necessary conditions for them to serve as a neutral yet influential advisor, capable of navigating the complex terrain between boardroom, regulators and shareholders. A modern CoSec must balance professional detachment with organisational immersion. While appointed by the board, they often operate within executive structures, making their independence, credibility and reporting lines critical. Far from being abstract, these frameworks empower CoSecs like Thabani Jali and Ann Fiona Maskell to redefine governance in practice. Thabani Jali, who served as Group Company Secretary at Nedbank before advancing to a senior governance leadership position of Chief Governance and Compliance Officer, exemplifies the evolving role of the CoSec in large, complex financial institutions subject to intense regulatory scrutiny. During his tenure, Jali embedded a culture of ethical leadership and robust compliance that resonated across the organisation. He was known for elevating the role of the CoSec from operational support to strategic influence, helping the board to integrate governance into its decision-making processes. His leadership demonstrated how a fully empowered and trusted Company Secretary can shift an organisation toward long-term sustainability. Jali also played a visible role in shaping Nedbank's stakeholder engagement and integrated reporting approach, both of which are now seen as benchmarks in the sector. If Jali illustrates the strategic reinvention of the CoSec in a large listed bank, Ann Fiona Maskell shows what sustained, quietly tenacious governance looks like inside a specialist insurer that answers both to South African regulators and a German-headquartered parent. Over almost two decades she has stewarded Munich Re Africa through Solvency II-style capital regimes, multiple IFRS updates and the transition to the Insurance Act, all while keeping the board focused on risk culture. Her hallmark contribution has been an integrated solvency-and-risk dashboard that lets directors see capital adequacy, conduct findings and emerging climate-related exposures on a single page, now used as a template across the group's African subsidiaries, as cited in Munich Re's 2022 Integrated Report. These examples highlight not only the versatility of the CoSec role but also the fortitude, adaptability and credibility required to execute it effectively. The challenges are significant: unclear reporting lines, inadequate independence, the complexity of ever-evolving regulatory demands and sometimes a lack of board appreciation for the CoSec's strategic value. Yet when the role is respected and well-resourced, the benefits for governance and board performance are immense. The strategic importance of the CoSec role cannot be overstated. It helps to align the board's work with best practice governance and is often the last line of defence against procedural missteps. A well-supported and independent CoSec can raise red flags, ensure that proper processes are followed, and uphold ethical standards even in the face of resistance. Conversely, a marginalised or underqualified CoSec can render the entire governance system vulnerable. Ultimately, the Company Secretary is not just an administrator of meetings or a keeper of registers. They are a guardian of governance integrity, a strategic partner to the Chairperson and a resource for directors. Boards that invest in the capabilities and independence of their CoSec are better positioned to steer organisations through complexity and uncertainty. To stimulate reflection and discussion in boardrooms across sectors, I leave readers with four questions: 1. Does our Board fully understand and support the strategic value of the Company Secretary? 2. Are we providing the CoSec the independence and access they require to discharge their duties? 3. How does our CoSec facilitate continuous director development and governance maturity? 4. In what ways does the Company Secretary protect the integrity of board processes? The answers to these questions could determine whether the board is merely functional or truly effective. Boards that dismiss these questions risk governance performativity oversubstance. Nqobani Mzizi is a Professional Accountant (SA), (IoDSA) and an Academic. Image: Supplied * Nqobani Mzizi is a Professional Accountant (SA), (IoDSA) and an Academic. ** The views expressed do not necessarily reflect the views of IOL or Independent Media. BUSINESS REPORT
IOL News
25-06-2025
- Business
- IOL News
Governing strategy and risk: How boards can steer the future
A board that is too polite, too deferent, or too focused on oversight rather than direction risks becoming irrelevant. The future of governance belongs to boards that are intellectually engaged, emotionally resilient and strategically aware. Image: AI Lab By Nqobani Mzizi In the theatre of corporate leadership, strategy is often presented as a management exercise, being something crafted by executives, presented in compelling slides, and approved by the board before being shelved until the next annual review. But governance theory, particularly King IV, challenges this view. Principle 11 is unambiguous: the governing body should govern risk in a way that supports the organisation in setting and achieving its strategic objectives. That is, strategy cannot be separated from risk, and boards cannot be passive participants in either. From observations of governance practice, it appears that the board's involvement in strategy tends to be more reactive than generative. Strategic plans are often presented for endorsement rather than developed in close partnership with the board. Even multi-day strategic planning workshops, intended to promote alignment and long-term vision, can end up validating management's predetermined direction, rather than enabling critical reflection or true co-creation. Yet, the board's role in strategy is not merely to approve, it is to shape. It is to interrogate, anticipate and guide the organisation's navigation through complexity. The MTN Group offers a compelling case of the dynamic interplay between strategy and risk. Operating in more than 18 countries, many of which present volatile political and regulatory conditions, MTN has had to continuously recalibrate its strategic posture. Its challenges have ranged from a record-setting regulatory fine in Nigeria to managing sanctions exposure in Iran and dealing with compliance scrutiny in multiple jurisdictions. Each of these moments has tested the resilience of MTN's governance structures and demanded strategic agility from its leadership. Yet, despite these headwinds, MTN has continued to evolve, shifting from being a traditional telecoms provider to a broader digital operator, with fintech and mobile banking now central to its growth strategy. This expansion has introduced new layers of risk, including cybersecurity, financial regulation and data privacy. Through it all, MTN's board has had to play a critical role in balancing opportunity with caution, growth with governance. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading In this context, a board cannot simply react. It must be deeply embedded in understanding the environments the business operates in, the stakeholder pressures it faces and the direction the company is moving toward. The strategic pivot toward becoming a digital services provider across Africa, rather than remaining only a telecoms operator, is a massive shift. It alters the risk landscape, invites new competitors, and demands new strategic capabilities. For a board, this goes beyond being an issue of oversight. It is one of direction-setting. King IV encourages boards to ensure that strategy is not developed in isolation from the organisation's risk appetite and its long-term value creation goals. Principle 4 reinforces this by asserting that purpose, risk, opportunity, strategy, performance and sustainability are inseparable elements of the value creation process. This means governing risk is not a brake, it is a compass. Risk should inform, not inhibit, strategic thinking. Yet, too many boards only engage with risk through the audit and risk committee's heatmaps and registers rather than seeing risk as central to framing opportunity. Where MTN's board demonstrated resilience in the face of adversity, Tongaat Hulett's governance unravelled under intense financial and ethical pressures. While the company's strategy, centred on agricultural production and property development appeared sound, it was later revealed that management had deliberately misrepresented financial results, overstating assets and revenue over several years. Although the board may have been misled by executives' intent on concealing the truth, this does not negate the importance of robust, independent scrutiny. Even well-constructed strategies require validation against internal controls and financial integrity. In hindsight, stronger challenge and more probing oversight might have helped surface concerns earlier. The strategy, though seemingly coherent, was built on flawed assumptions and insufficient transparency, revealing how strategic governance can falter not only through negligence but also through misplaced trust. To govern strategy effectively, boards must go beyond surface-level presentations and engage meaningfully with the assumptions, risks and long-term objectives that underpin the organisation's direction. This requires both critical inquiry and contextual awareness. Too often, strategies are based on outdated data or overly optimistic forecasts, with boards accepting projections without testing their realism against emerging economic, political and technological realities. A risk-based strategy, as envisaged in King IV, calls for continuous interrogation, not only of external threats, but also of internal blind spots, capabilities and culture. Governance that merely rubber-stamps strategy, without challenging its basis, exposes the organisation to material risk. Boards must therefore play an active role in shaping, refining and stress-testing strategy throughout its formulation and execution. An effective board engages not only with the content of strategy but with the process through which it is formed. It ensures that multiple voices are heard, particularly those of risk, sustainability and technology leaders. It understands that strategy is not just a forecast. It is a set of choices about where to play and how to win, made in a context that is always shifting. Moreover, boards must remain agile. The strategy set in January may need adjustment by July. This is especially true in a post-pandemic world disrupted by AI, climate shocks, and geopolitical volatility, among other factors. Boards that fail to revisit strategy in the face of change risk undermining organisational resilience. This demands courageous governance, the kind that trades politeness for probing questions, and oversight for ownership. It means being willing to challenge the executive team's narratives, to voice dissent, to ask uncomfortable questions about ambition versus capacity. A board that is too polite, too deferent, or too focused on oversight rather than direction risks becoming irrelevant. The future of governance belongs to boards that are intellectually engaged, emotionally resilient and strategically aware. The board's role in strategy is not to rewrite the business plan but to ensure that the strategy is rooted in reality, aligned to purpose, responsive to risk, and capable of creating long-term value. And so, to board members everywhere, four questions remain: Is your strategy a living framework or a static document? Can your board connect the dots between risk and value creation in every major decision? Do you truly understand the external forces reshaping your industry, and are you adjusting accordingly? And most importantly, are you governing strategy, or just approving it? If strategy shapes destiny, then the board must be more than a steward. It must be its architect. Nqobani Mzizi is a Professional Accountant (SA), (IoDSA) and an Academic. Image: Supplied * Nqobani Mzizi is a Professional Accountant (SA), (IoDSA) and an Academic. ** The views expressed do not necessarily reflect the views of IOL or Independent Media. BUSINESS REPORT
IOL News
24-06-2025
- Business
- IOL News
The seat of power: Why chairperson appointments define governance integrity
Chairpersons must not only be skilled and independent. They must be trusted stewards of the board's collective conscience. They must create space for challenge, dissent and deliberation. This means resisting pressure from appointing authorities, whether regulators, politicians or powerful shareholders, writes Nqobani Mzizi. Image: AI Lab By Nqobani Mzizi Few roles in governance carry more symbolic and functional weight than that of the board chairperson. They are expected to steward the board's independence, manage its dynamics and serve as a principled intermediary between executives, stakeholders and oversight bodies. And yet, when the process of appointing a chairperson becomes opaque or politicised, it risks undermining the very integrity the role is meant to uphold. Though arising in vastly different contexts, one in a listed financial institution, the other in State training entities, recent controversies in South Africa surrounding chairperson appointments have revealed a common vulnerability: when power over these appointments is exercised without transparency or accountability, it threatens the legitimacy of governance itself. The chairperson of a board is not merely a ceremonial figure. King IV describes the role as fundamental to 'setting the ethical tone' and ensuring 'effective functioning of the board'. The chair leads the board, facilitates engagement, ensures balanced debate, and acts as a trusted guide on matters of governance, strategy and risk. The chair must be independent, capable and committed to ethical leadership. The Companies Act of South Africa (Section 66) allows companies broad discretion in how they constitute boards, but King IV's Principle 7 provides clearer direction: the chairperson should be an independent non-executive director, free from conflicts of interest. The rationale is sound: a board cannot hold management to account if its leadership is compromised or beholden. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ In the Sipho Pityana case, the North Gauteng High Court found that the South African Reserve Bank's Prudential Authority (PA) acted unlawfully by interfering in the process to nominate him as chairperson of the Absa Group. The court held that the PA, by engaging in informal and opaque discussions with Absa, and raising prior, untested allegations, had exceeded its mandate under the Banks Act and denied Pityana his right to procedural fairness. This judgment is about more than legal overreach. It raises a fundamental governance concern: when regulatory authorities bypass transparent and lawful procedures, they risk becoming gatekeepers rather than guardians. The independence of board appointments must be upheld, not just from political interference but also from regulatory discretion exercised without due process. Otherwise, credible and qualified individuals can be sidelined without recourse, weakening both institutional trust and governance legitimacy. On the other end of the spectrum is the controversy surrounding the appointment of the Sector Education and Training Authority (SETA) board chairs by Higher Education Minister, Dr Nobuhle Nkabane. Despite SETAs being critical for skills development, their governance has often suffered undue interference. In this latest case, individuals reportedly aligned with politically influential networks were handpicked without transparent processes or demonstrable governance credentials. Following public enquiries, Parliament's Portfolio Committee on Higher Education raised alarms, demanding accountability for appointments that appeared to have flouted the basic tenets of governance. Although the minister has since withdrawn the appointments, the reputational and institutional damage is already done. Further controversy surrounded the selection panel, which reduced over 500 applications to a disputed shortlist of 21, several of whom had strong political ties. While the question of competence and independence lingers, the appointment of chairpersons based on allegiance rather than merit raises concerns of institutional capture and erosion. This perception disincentivises ethical leadership and discourages independent directors from serving. Worse, it signals that governance can be gamed, and that the boardroom is a reward for loyalty, rather than a forum for oversight. These cases remind us why King IV places such emphasis on the composition and leadership of governing bodies. The independence of the chairperson is not optional. It is foundational to the credibility of the board and its ability to serve the organisation's purpose, oversee strategy and govern risk. King IV further recommends that the nomination process be 'formal, considered and transparent', involving a nomination committee that evaluates candidates against a defined skills matrix, independence criteria and leadership capability. Anything less risks populating the board with individuals selected for alignment rather than governance fitness. Complementing this, Principle 6 of King IV calls for the board to be appropriately constituted with the right balance of skills, experience, diversity and independence, ensuring objectivity in decision-making. Principle 1 reinforces that governance must be exercised in the interest of ethical and effective leadership, including resisting the temptation to use board appointments for private, political or factional ends. The real test of governance is not just in ticking the boxes but in doing what is right when it is inconvenient. It is about creating conditions where board members can govern without fear or favour. If those in the chairperson role are captured or compromised, the board is weakened from the top. Chairpersons must not only be skilled and independent. They must be trusted stewards of the board's collective conscience. They must create space for challenge, dissent and deliberation. This means resisting pressure from appointing authorities, whether regulators, politicians or powerful shareholders. If board leadership is compromised, governance becomes performance art. The chair's influence on tone, accountability, strategic direction and ethical conduct is too significant to be left to chance, politics or personal networks. A chairperson should not be appointed because they will go along with the status quo, but despite the fact that they may disrupt it. Sound governance requires chairpersons who are not only competent and compliant but also courageous and principled. It demands appointment processes that are above suspicion and beyond manipulation. Whether in the private sector, public entities or non-profit organisations, the chairperson's seat must remain sacred and reserved for those who are governance fit. As we reflect on these two cases, boards and shareholders must ask themselves: Is our chairperson genuinely independent and objective, or merely compliant? Do our appointment processes stand up to public scrutiny? Are we equipping our board leaders with the courage to challenge or selecting themto conform? How does the manner of a chairperson's appointment affect the board's ability togovern ethically? Because when the process fails, and independence is lost, it is not just one appointment that suffers. It is the integrity of the entire board, and the trust of those they serve. Nqobani Mzizi is a Professional Accountant (SA), (IoDSA) and an Academic. Image: Supplied * Nqobani Mzizi is a Professional Accountant (SA), (IoDSA) and an Academic. ** The views expressed do not necessarily reflect the views of IOL or Independent Media. BUSINESS REPORT
