By Surihe Gaomas
WINDHOEK
In an effort to avoid frequent fraud, mismanagement of funds and corruption in both the public and private sectors, boards of directors need to adopt effective and efficient corporate governance.
This was revealed at a two-day training programme on corporate governance that started in Windhoek yesterday.
Close to 50 board and council members and executive management representatives of various companies, government agencies and parastatals are attending the workshop.
The course, which ends today, outlines the roles and responsibilities of directors and seeks to equip them with understanding of sound directorship, proper board practices and improved corporate governance.
Local consultant and trainer, Charl du Toit, said corporate governance is important, as it will do away with corporate failures, extravagant remuneration packages for board members as well as identifying and managing risks like fraud, bad debts and wrong investment decisions.
“You need to have the proper structures and controls in place. Like for instance, making sure that minutes of a board meeting are taken promptly.
Minutes are like a working document and must be properly kept,” said Du Toit. Although the mentality is that boards of directors are not in essence running the company, but rather management itself, every board member must know how a company or business functions.
Du Toit said this falls in line with the fact that board members are held accountable for the business at the end of the day.
“As a board member, you need to develop that nose of what you want in the audit report. One wonders if board members are even concerned about their reputation. You just have to know what’s going on,” said the consultant.
Corporate governance is defined as “the system by which corporations are directed and controlled”. Due to increasing incidents of mismanagement, corruption and waste of public funds, corporate governance has now become a topical issue worldwide.
Gone are the days when corporate governance was just based on companies and parastatals handing in annual financial reports.
Now, sound directorship is based on social responsibility, not only to clients but also to senior management and its shareholders.
Du Toit said the long-term success of any enterprise depends on a “sound strategy, competent management, productive assets, a market for its goods and services and access to investment capital”.
The Corporate Governance and Board of Directorship Training, which ends today, was organised by the University of Namibia’s Centre for External Studies Department of Continuing Education.