BEST PRACTICES OF BOARDS OF DIRECTORS OF JSE LISTED COMPANIES IN THE ICT SECTOR IN SOUTH AFRICA
Date
2012-01-19
Authors
Sikhondze, Rita
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Abstract
The purpose of the research was to determine the best practices needed by
Boards of Directors of JSE listed companies in the Information and
Communication Technology (ICT) sector in South Africa. The best practices
were solicited with the aim of assisting Boards of Directors in ICT listed
companies in South Africa to ensure that their Boards function effectively
and optimally. In the process of conducting this research, best practices of
Boards of Directors in the ICT listed companies were identified.
An academic literature review was compiled with the aim of exploring
existing academic literature and applying it to the main research problem
that was being investigated. The literature review established a number of
best practices needed by Boards of Directors in ICT listed companies. These
best practices included, but were not limited to: the importance of good
corporate governance, Boards of Directors having clear guidelines on their
roles and responsibilities, CEO and Chairman duality, Board composition,
Board size, efficient Board processes, presence of Board committees, the
relationship between management and the Board, Board diversity and Board
recruitment programmes.
The research employed an interpretive analysis as part of the qualitative
methodology. 14 in-depth interviews were completed with Boards of
Directors in ICT listed companies. Interviews were transcribed and content
analysis was performed in order to generate recurring themes.
The research was able to establish and validate a number of propositions
formulated in the literature review. The validated propositions included the
following:
· Effective Boards of Directors have clarity of their roles and
responsibilities on the Board
· Best practice dictates that there should be separation of CEO and
Chairman duality
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· Boards should comprise a majority of non-executive directors as it
ensures effectiveness and accountability
· Small Boards are advisable as there are easier to manage and they
function more effectively than larger Boards
· Efficient Board processes and constructive conflict on the Board
facilitate a climate of productive director participation
· Best practice in corporate governance dictates that Boards should
have specialized committees on the Board
· In order to optimize Board effectiveness, it is important that there exist
Board recruitment and development programmes
· A strong, positive relationship between the Board and management
will ensure that the Board functions effectively
· Diversity is important for all Boards for improved effectiveness
The key message is that it is in the best interest of ICT listed companies to
adopt and conform to the best practices identified in this research as this will
ensure Board effectiveness, and sustainable growth and performance.
Description
MBA thesis - WBS
Keywords
Boards of Directors, ICT companies, Information technology companies, Directors