Governance Review Task Team Structure Questionnaire and Roadshows January 2019
Johannesburg, 14 December 2018 - We are confident that you are aware that SAICA and the accounting profession received considerable criticism over the past year. Much of the criticism has arisen from allegations of inappropriate work carried out by firms, corporate scandals involving chartered accountants and allegations of corruption. The Board of SAICA has implemented various actions to address these issues. At the annual general meeting held on 26 June 2018, the chairman of SAICA announced that the Board would set up a process to look at the governance structure of SAICA and to involve members in the process. In a letter to members sent out on 31 August 2018, the chairman further announced that a Governance Review Task Team (GRTT) had been formed to assess the appropriateness of the current SAICA governance structures and to make recommendations on how they can be improved to deal with issues more effectively and in a more timely manner.
When SAICA was established in 1980, its governance structure comprised a Council based on geographic representation. Over the years, the structure was changed to include representation from various member constituencies such as small and medium practices, members in business, members based in other countries and ABASA. This structure may no longer be appropriate to deal with current and future challenges facing the accountancy profession.
The GRTT has met several times, and it has conducted research into how similar bodies around the world are structured. An appropriate structure for SAICA may not necessarily be the same, or similar, to that used by any other institute. In addition to challenges faced by the global profession, the profession in South Africa faces unique difficulties. The GRTT believes that it cannot arrive at a suitable solution without input and advice from members and member groupings. Accordingly, the GRTT is inviting members and interested member groups to provide input.
The GRTT is proposing, as part of phase one of its terms of reference (as detailed in the circular to members on 31 August 2018), a governance structure in line with the principles of King IV ™. The proposed structure would consist of an inclusive, independent, member-elected, professional, paid Board, supported by an advisory Council that is representative of the diverse interests of all members. The President of the Council would serve as a member of the Board, but would not be Chairman of the Board.
Please read Appendix A, which is included to provide background and context to the proposed governance structure.
We have developed an anonymous questionnaire, in the form of a survey, which we would like you to complete. All responses will remain anonymous and only aggregated data will be used in the report. We have kept the questionnaire short so that it does not take up a lot of your time. Members are welcome to supplement the questionnaire with additional comments and input. We appreciate your cooperation and thank you for your assistance. This is a critical time for the profession. Decisions made now will impact the future standing of the profession and its members.
Members should follow this link to complete the questionnaire immediately on receipt of this email, however the final submission date will be 31 January 2019. (If you have difficulty with the questionnaire, please copy the link to a different browser.) For members who wish to engage with the GRTT on this topic prior to completing the survey, there will be consultation sessions and webcasts on the following dates and cities:
Please help us to develop a governance structure that will ensure quick and efficient decision-making, address key member needs and restore confidence in the accountancy profession in South Africa.
Chairman of the Board
Chairman of the GRTT
Further update on the SAICA Governance Review
Johannesburg, 31 August 2018 - Our previous communication, dated 31 July 2018, informed you of the outcomes of the workshop that was facilitated by Professor Mervyn King, held on 28 July 2018. The workshop was a preparatory first step for the SAICA governance review, aimed at ensuring that all of SAICA's leadership structures were on the same page regarding what needed to be done when it came to addressing the governance matters at hand for the Institute and the profession.
Since then, the Board of SAICA met to formally ratify the formation of the governance review task team and approve the members earmarked for the task team, as well as their terms of reference. Following this, we convened with the task team in order to communicate to them the key matters around the review, including the need for stakeholder engagement during the process and the preferred timelines for the conclusion of Phase 1 of the review, as committed and communicated to members at the last AGM of 26 June 2018 and in subsequent Board Digest communications. However, the Board is aware, and wishes to remind members also, that the final timing for the completion of Phase 1 will only eventually be determined by the work plan and schedule that the task team adopt, having determined the extent of the fieldwork and consultation required of them in order to deliver on the terms of reference.
We are privileged to have some of our profession's most active, respected and progressive members agree to serve the profession by volunteering their time to the critical review of our Institute. The final task team comprises the following members:
- Roy Andersen - Task Team Chairman
- Graham Terry
- Gloria Serobe
- Suresh Kana
- Tumeka Matshoba-Ramuedzisi
- Gil Gorgulho, and
- Ignatius Sehoole
Together with the task team, we have agreed that for Phase 1 of the governance review, these are the deliverables:
- a simplified and fit-for-purpose governance model;
- a nomination and appointment process for the Board and Board structures;
- to define a balanced Board which will encompass greater diversity and inclusion of stakeholders from outside the membership base of SAICA (i.e. independent representatives who have the necessary skills and experience to help provide strategic guidance), and possibly give consideration to the inclusion of other designations from within the membership base, being Associate General Accountants [AGAs(SA)] and Accounting Technicians [ATs(SA];
- to review the roles and responsibilities of Board members, including the Chairman and Vice Chairmen, as well as Board sub-committee members;
- to recommend an appropriate size and structure for the Board and Board Sub-Committees;
- to recommend a transitional process to ensure the continuity and effectiveness of the Board;
- if a regional and/or constituency-based model is recommended, to provide guidance to enable the Board to distinguish between governance, representation and engagement activities (i.e. provide clarification on the functions of constituency representatives in terms of their responsibilities and accountability to SAICA as Board members versus their regional and/or constituency roles);
- to consider the appropriateness of remunerating members of the Board;
- a strong succession planning process, including tenure of service for Board members and a process for the removal of Board members;
- to recommend the extent to which King IV principles should be adopted, taking note of the need to recommend the structures for Board sub-committees (point 5 above);
- to provide guidance and direction to the Board on urgent items that need to be addressed in order to restore trust in the profession.
At the AGM of 26 June 2018, we committed to members that we will explore ways of ensuring that they are involved in this governance review. The task team has been made aware of this commitment and the importance of ensuring that it is met, so they will consider the most effective ways of achieving this member engagement as they progress with their work.
The task team will be keeping the Board informed of their progress throughout Phase 1 of the governance review. In the meantime, the current Board and the executive management of SAICA will continue to focus on ensuring that the operations of SAICA continue uninterrupted and that the Institute is ready to receive the task team's recommendations on completion of their work.
We will continue to ensure that we communicate with you and keep you informed as and when there are key developments, so that the profession walks this path collectively.
Chairman: SAICA Board
SAICA Acting CEO
Professor Mervyn King to lead SAICA’s governance review
Johannesburg, 01 August 2018 – The accountancy profession has been under various forms of challenges and in the spotlight for some time and this necessitated the need to review the purpose, relevance and governance processes of the South African Institute of Chartered Accountants (SAICA) to deliver on its mandate and stakeholders’ expectations.
At the SAICA Annual General Meeting held on 26 June 2018, the SAICA Board announced it would initiate a thorough governance review of the organisation with the intention of rebuilding public trust in the profession and re-establishing the reputation of the CA(SA) brand. The Board also committed to reviewing the constituent nature in which the Board was appointed and also aligning the Board composition with the relevant standards of Corporate Governance. This is to ensure that SAICA continues to add value and sustain the Institute’s relevance to its members and all the other stakeholders who rely on the chartered accountancy profession.
Since then, SAICA has appointed Professor Mervyn King, world-renowned corporate governance specialist and chairman of the King Committee on Corporate Governance and lead author of the Institute’s integrated reporting guidelines, to advise and lead the governance review. Professor King is highly regarded for his work advising corporates and professional services bodies, including international auditing and accounting member institutions. Professor King has assisted with similar reviews of accounting and other organisations to ensure they remain relevant and are able to respond to societal and regulatory demands for improved governance and increased transparency.
On Saturday 28 July 2018, Professor King led a workshop at SAICA’s head office which was attended by over 50 people representing SAICA’s major stakeholders. These included the SAICA Board, its Advisory Council, chairpersons of regional Board committees, as well as the senior management team.
The meeting produced robust debate about the issues and challenges facing the profession. There was widespread concern that recent events impacting negatively on the profession should not be allowed to irreversibly taint the reputation of members who are adding substantial value to the economy and society. It was also noted that SAICA needed to further consider the broader range of challenges to the profession ranging from the impact of new technology, to maintaining relevant education and standards, and the respect accorded to members by the broader spectrum of stakeholders who rely on the value delivered by members.
The workshop concluded that SAICA’s purpose would be premised on three important principles, namely: ensuring quality, trust and integrity in the chartered accountancy profession. Not only is this in the public interest, but it is also vital in guaranteeing the continued value and relevance of the CA(SA) designation, which remains of paramount importance for all current and future members.
Another important step in rebuilding trust in the designation as a guarantor of trust in the profession is to align SAICA’s governance structures with the highest standards of corporate governance. “SAICA needs to embrace the impetus for change and use this as an opportunity to build a member organisation that is not only fit for today but also for where the profession needs to be”, stated SAICA Board Chairman Lwazi Bam. The meeting resolved to establish a task team of senior and respected members of the profession to work with Professor King as Phase 1 of SAICA’s governance review. This task team will comprise members of the Advisory Board Council as well as respected external leaders and corporate governance specialists. The focus of Phase 1 will be:
- Redrafting the sections of the SAICA Constitution relating to the composition of the Board. The objective will be to establish a balanced Board in line with current guidelines on good corporate governance.
- Consulting with SAICA members on the outcomes of this process before making final recommendations. The task team will be engaging members throughout the country on a series of roadshows to be held from August to October 2018.
Upon completion of this review and the resultant proposed amendments to the constitution, it is anticipated that a new diversified SAICA Board will be appointed by the provisional targeted date of 30 November 2018. This new Board will be tasked with leading the final phase of the governance review which is to undertake a fundamental review of the rest of the SAICA Constitution as well as its by-laws and the disciplinary processes. Their role will be to ensure buy-in and support for common purpose and vision for SAICA and to ensure that the Institute take considered steps to adequately future-proof the value and relevance of the chartered accountancy profession.
The task team is required to report back to the Board and members throughout the various stages of the process. Calling on members to participate in the roadshows and provide input to the task team, Fanisa Lamola, SAICA Acting CEO, said: “We have made good strides on the journey we outlined to members at the AGM in June and look forward to receiving members’ input during the roadshows.”