King III Report Ad Hoc Meetings: the bucks start here!

Feb. 11, 2010 - PRLog -- Stuck in meetings with clients in Corporate South Africa, I’m reminded of the comment by my foreign colleague across the table (during the commercial break) saying that the habits of people in the countries in the world are of two types “When you ask a question…you get the nondependable YES answer and then in situations, when you ask a question you get the straight NO which you can count on”. Nondependable meaning: Quick to say YES but no execution to get to YES."

Is this the loophole in “activist accountability” ? "Well, if it is, it prevails in many corporates", as my friend exclaims. So what does “activist accountability” really mean and how would this relate to the King III report for corporate governance.  This point is often forgotten in the midst of disputes between parties; who was really accountable?

So it's no use thinking about accountability after the event; it's not the buck stops here but should be the bucks start here. A root cause to the issues relating to meetings, especially the issues that may relate to convening ad hoc meetings (King III) is the issue of scheduling the time of the meetings.

Time variations in meetings should be acceptable and should be brought to all parties in advance. It is where issues arise after the event of the meeting, this is a clear signal of a break down in full cycle governance. Full cycle governance requires changes in roles, attitudes and culture of the organisation.

There should be absolute minimum requirements when it relates to meetings e.g. authority to veto an appointment, meet in advance - meet with Executive Directors and/or Secretary before meetings. In the case where there is a reactive breakdown in communications between stakeholders, much like leading to “piggy in the middle” (perhaps we like to still bring out the kids in us), the King III report does account for this. The “King III proposes that companies institute measures to ensure they are able to proactively manage the relationships with all stakeholders and includes shareholders". The company should encourage constructive stakeholder engagement.

There are effective ways to resolve the above using technology as a consideration. Technology also helps cut out all the subjectivity that leads to dead end debates.

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