ICCA Meetings Africa Association Day - Collaboration towards an Advanced Africa

2. Ethics and Credibility in the Business
Events Industry
Adv Annamarie van der Merwe
FluidRock Governance Group, Executive Chair
24 February 2020

3. Every reputable lawyer must have a disclaimer……
The data and information shown in this document or conveyed in presentation is for general
information purposes only, is not intended for any commercial or non-commercial purposes and
may or may not represent the current status of the subject matter. No data or information is
warranted or guaranteed by FluidRock Governance Group Proprietary Limited ("FluidRock") and its
related parties as to its completeness, accuracy, or fitness for a particular purpose, express or
implied, and such data and information are subject to change without notice. You should not act on
any of this data and information. Any comments or statements made herein do not necessarily
reflect those of FluidRock.
References to King IV™ are to the King IV Report on Corporate Governance™ for South Africa 2016.
Copyright and trade marks are owned by the Institute of Directors in South Africa and the IoDSA
website link is: http://www.iodsa.co.za/?page=AboutKingIV

4. “Power corrupts the few, while weakness corrupts the many."
Eric Hoffner

5. Doing the right things versus doing things right!!
Doing the right things (being
informed)
▪ Corporate legislation
▪ Constitutional documents
▪ Shareholders’ agreement
▪ Other relevant statutes and
regulations
Doing things right (act with
diligence)
▪ King IV Report
▪ Charter and terms of reference
▪ Delegation of authority
▪ Code of Conduct
▪ Other ethics related
policies……….etc etc etc

6. “Check the scoreboard”…. “It’s not a pretty picture”…


9. Criminal case opened against former
Tongaat Hulett executive
The sugar maker says the police are investigating an unnamed former
executive for his role in an accounting scandal that has forced the company
to restate financials
Business Day
27 June 2019 - 09:42 Loni Prinsloo

10. Thomas Cook collapse: German company files for
bankruptcy……
• Thomas Cook businesses in several other European countries are also trying to
survive:
• Polish subsidiary, Neckermann Polska, has suspended its activities and said it will
file for bankruptcy
• Thomas Cook Netherlands, which has 10,000 holidaymakers abroad, said on
Wednesday it had been granted a delay on payments while action was taken to
secure its future
• Thomas Cook France has more than 9,600 customers abroad and will go to court
on Thursday in an attempt to go into receivership and find a buyer
• Thomas Cook Austria has filed for bankruptcy and has almost 5,000 customers
abroad.
Founded in 1841, parent company Thomas Cook filed for bankruptcy after failing to
secure emergency funding of £200m from the UK government……
BBC News, 25 September 2019

11. Thomas Cook…….some of the root causes……..
Thomas Cook's dramatic collapse follows years of mismanagement
at the tour operator and a failure to keep pace with online rivals.
Brexit didn't help either.
Analysts say it was one of several factors that led to the 178-year
old travel company's demise, which has left 150,000 UK
holidaymakers stranded abroad and cost thousands of employees
their jobs.
CNN Business

12. Now let’s ask the question again ……Why is corporate
governance relevant……….?
“Corporate governance, for the purposes of King IV, is defined as the exercise of
ethical and effective leadership by the governing body that results in the
achievement of the following governance outcomes:
• an ethical culture;
• performance and value creation;
• effective control; and
• legitimacy.”
King IV Report

13. The King IV Code - Content
4 Governance outcomes
17 Principles
400+ recommended practices

14. King IV Code: Principles
• Principle 1: Leadership – The Board should lead ethically and effectively
• Principle 2: Organisational ethics – The Board should govern the organisation in a
way that supports the establishment of an ethical culture
• Principle 3: Responsible corporate citizenship – The Board should ensure that the
organisation is and is seen to be a responsible corporate citizen
• Principle 4: Strategy and performance – The Board should appreciate that the
organisation’s core purpose, its risks and opportunities, strategy, business model,
performance and sustainable development are all inseparable elements of the value
creation process
• Principle 5: Reporting – The Board should ensure that reports issued by the
organisation enable stakeholders to make informed assessments of the organisation’s
performance and its short, medium and long term prospects
• Principle 6: Primary role and responsibilities of the governing body – The Board
should serve as the focal point and custodian of corporate governance in the
organisation

15. King IV Code: Principles
• Principle 7: Composition of the governing body – The Board should comprise the
appropriate balance of knowledge, skills, experience, diversity and independence for it
to discharge its governance role and responsibilities objectively and effectively
• Principle 8: Committees of the governing body – The Board should ensure that its
arrangements for delegation within its own structures promote independent judgment
and assist with balance of power and the effective discharge of its duties
• Principle 9: Evaluations of the performance of the governing body – The Board
should ensure that the evaluation of its own performance and that of its committees, its
chair and its individual members, support continued improvement in its performance
and effectiveness
• Principle 10: Appointment and delegation to management – The Board should
ensure that the appointment of, and delegation to, management contribute to role clarity
and the effective exercise of authority and responsibilities
• Principle 11: Risk Governance – The Board should govern risk in a way that supports
the organisation in setting and achieving its strategic objectives

16. King IV Code: Principles
• Principle 12: Technology and information governance – The Board should
govern technology and information in a way that supports the organisation setting
and achieving its strategic objectives
• Principle 13: Compliance governance – The Board should govern compliance
with applicable laws and adopted, non-binding rules, codes and standards in a way
that supports the organisation being ethical and a good corporate citizen
• Principle 14: Remuneration governance – The Board should ensure that the
organisation remunerates fairly, responsibly and transparently so as to promote the
achievement of strategic objectives and positive outcomes in the short, medium and
long term
• Principle 15: Assurance – The Board should ensure that assurance services and
functions enable an effective control environment, and that these support the
integrity of information for internal decision-making and of the external reports

17. King IV Code: Principles
• Principle 16: Stakeholders – In the execution of its governance role and
responsibilities, the Board should adopt a stakeholder-inclusive approach that
balances the needs, interests and expectations of material stakeholders in the best
interest of the organisation over time
• Principle 17: Responsibilities of institutional investors – The governing body of
an institutional investor organisation should ensure that responsible investment is
practiced by the organisation to promote the good governance and the creation of
value by the companies in which it invests.

18. It is NOT about ticking boxes………..
“Business culture, ethos and behaviour matter. Mechanically applied
rules, guidance and a ‘compliance culture’ are not enough.”
Roads to Ruin
A report by Cass Business School on behalf of Airmic
Sponsored by Crawford and Lockton

19. Note to self……..(and management)
“Tell the truth. Transparency breeds legitimacy.”
John Maxwell

20. Let’s wrap up by reminding ourselves……..
“Good governance is underpinned by good behaviour; no
more no less…..Good corporate governance, in turn,
makes for sustainable business. A key lever in all this is
the values we as individuals bring to organisations, and
how we help, or hinder, the collective value system that
translate into the culture of organisations….. We contend
that governance is the guideline, and behaviour is the
driver.”
Linda de Beer & MA Tordesillas, Corporate governance
outcomes
Juta, The Corporate Report, Vol 8 Issue 2

21. Or, in the words of our own Prof Mervyn King……..
“………the tone at the top, the tune in the middle and
the beat in the feet at the bottom……….”

22. The bad news is………….if we don’t get this right,
there are going to be many more Steinhoff’s,
Tongaat’s, Theranos’, Thomas Cook’s ………

23. And remember………
“If people steal for you, they will steal from you….”
The Ethical Capitalist
Julian Richer

24. Thank you ……