IoDSA
Governance Assessment Instrument
Information 2012
Contents
Contents 1
Introduction 2
Benefits 2
Functionality 3
Costing 4
Subscription 5
Partners 5
About the IoDSA (www.iodsa.co.za) 5
Contact Details 5
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Introduction
The Institute of Directors in Southern Africa (the IoDSA) is the convener of the King Committee and the custodian of the King Reports. It is one of the main objectives of the IoDSA to promote corporate governance, and implicit thereto is application of the King Report on Governance in South Africa, 2009 (King III).
There have been two primary challenges for organisations when considering King III:
1. King III has to be interpreted and understood within the context of the nature, size and complexity of each organisation;
2. There has been no credible and generally accepted national benchmark to measure performance in relation to governance.
In order the meet the above challenges, the IoDSA has developed the Governance Assessment Instrument (GAI).
Benefits
1. The GAI assists with the implementation of King III and the continual assessment thereof in accordance with the notion that governance is a journey.
2. The GAI offers a complete assessment of the application of King III providing assurance that all governance structures and processes recommended therein have been considered.
3. The GAI enables directors to discharge their responsibilities properly by having a framework that offers a proper review and consideration of the application of King III; it reduces voluminous reading material for directors into succinct high-level relevant reports that provide a birds-eye view of the organisation’s application thereof.
4. The GAI attributes a weight to each assessment statement based on the recommendations contained in King III. This results in a meaningful scoring mechanism that is reflective of the organisations adoption of King III, and highlights prioritisation of areas needing attention.
5. The GAI gives holding companies a concise view of their subsidiaries’ governance.
6. The GAI provides a framework by which governance can be assured by independent service providers.
7. The GAI offers a reporting mechanism for peer-to-peer comparison by stakeholders in order for confidence in the quality of governance reporting to be enhanced.
8. As different modules have been developed to cater for various industry sectors, the GAI provides an interpretation of King III within the context of each sector. Included are the following modules:
· Listed and large private companies
· Owner-managed privately held companies
· Widely-held privately held companies
· Non-profit organisations
· Government departments
· Major, national & provincial entities
· Municipalities
· Municipal entities
· Pension funds
· Retirement funds
9. The assessment criteria include all legislation relevant to governance applicable in all the particular sectors for which the modules have been developed.
Functionality
The GAI covers the following main categories:
· Board composition
· Remuneration
· Governance office bearers
· Board role and duties
· Accountability
· Board committees
· Group boards
· Performance assessment
The assessment is done through a series of weighted statements to which multiple answer types are offered for selection by the user. Weighting is determined in accordance with the relative risk associated with non-application with the King III recommendation represented by the statement. In addition, organisations have the option to explain why a recommended practice is not applied or applied differently from the way it is recommended in King III, so that the organisation is not penalised for not achieving the maximum score as for full application.
The GAI calculates an overall score indicating the level of application of King III as follows:
The overall score and the score per category is represented as follows:
Complementary modules are released on an ongoing basis at no additional cost to the GAI monthly subscription fee. The modules are based on practice notes released by the Kind Commission. Current complementary modules are listed below:
· New directors’ self-assessment checklist; this guides newly appointed directors as to the documentation they should access and the matters they should inform themselves about in order to become fully functional board members.
· Company secretary checklist; this assesses the performance of the company secretary, and whether this function is adequately addressed by the organisation.
· CRISA; Code for Responsible Investing in South Africa.
· External Audit Review; this is a checklist for the assessment of the external auditor by the audit committee.
Costing
The monthly subscription varies dependent upon industry and size with R2,400 per annum for Non-Profit Organisations being the lowest, and R24,000 per annum for Listed or Large Private Companies the highest subscription fees. All other Industry module pricing lie between these.
Subscription
Order forms are available from the IoDSA website at www.iodsa-gai.co.za; completed forms can be sent to .
Partners
The IoDSA would like to thank the following Founding Partners for their financial support and pilot feedback during the development of the GAI.
For a list of current subscribers visit: http://www.iodsa-gai.co.za
About the IoDSA (www.iodsa.co.za)
The Institute of Directors (IoDSA) is a non-profit organisation that is unique in that it represents directors, professionals, business leaders and those charged with governance duties in their individual capacities in southern Africa. As the primary decision-makers in the private and public sectors, these individuals hold a special position of leadership and trust, and are responsible — both legally and morally — for the direction of economic enterprises.
The IoDSA is committed to the development of those charged with governance duties, directors, board learning and improving board effectiveness. Our vision is expressed through our slogan: Better Directors, Better Boards, Better Business.
Contact Details
Ansie Ramalho Angela Oosthuizen
Email: Email:
Tel (011) 430 9900 Tel (011) 430 9900
Michael Lasch Julie Peters
Cell: 083 377 0559 Cell: 082 990 6218
Email: Email:
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