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PwC: Greater demands and personal liability on South Africa’s non-executive directors
January 28, 2013
By Rob Starr, Content Manager, Big4.com
The Sixth Edition of the PwC Annual Review of Non-Executive Directors’ Practices and Fees Trends Report has some interesting findings. For example,the duties and responsibilities of South Africa’s non-executives directors continue to be increasingly broadened in the wake of new legislation and corporate governance principles.
“The continuing focus on corporate governance and the notable increase in stakeholders awareness of their rights and remedies have placed the conduct of directors under far greater scrutiny and by a far larger stakeholder base. The marked increase in the regulatory burden on companies and their directors, as well as the additional time constraints on non-executive directors have added to their challenges,” says Gerald Seegers, Director for Human Resources Services at PwC.
Seegers says that the demands on non-executive directors are significantly greater than they used to be in the past and there are increasing concerns around risk and personal liability, particularly in the advent of the new Companies Act of 2008.The PwC report examined the boards of 373 companies listed on the Johannesburg Securities Exchange (JSE) and was based on information publicly available as at 30 November 2012.
The talent pool in South Africa is plagued with a shortage of non-executive directors, with the number increasing by 1.2% to 2,294 (2,267 in 2011). Included in this year’s total count are 249 chairpersons, 76 deputy chairpersons, and 69 lead directors. Lead independent directors make up the majority of all directors since PwC began tracking the ratio of independent to non-independent directors last year.
Within the diversified services sector, increases in the large cap sector have gained some traction after having declined in 2012. The median non-executive director fee has increased to R505,000 annually.