"South African corporate governance practices have improved in recent years, but significant further improvement is still required to meet the King III corporate governance guidelines. However, this is expected to be a gradual process," says Roelof Steenekamp, director of the Fitch South African corporate team.
According to Samantha Crous, GM of the CRF Institute, home of the employer brand certification campaign Best Employers SA, although much of the focus of corporate governance is on the structuring, operating and controlling of the financials of a business, as the King III Report suggests, it also has everything to do with meeting the 'people' aspect of the triple bottom line - people, planet, profit.
Crous adds that corporate governance remains at the forefront of debate as companies look ahead to the new Company's Act and other international trends, such as a potential upsurge from investments abroad, affecting the way they do business. She believes that those companies with good people management policies in place and who are open to being accountable for those policies can improve their corporate governance standing and have an edge on others.
"Corporate governance is very complex and requires companies to take many things into consideration; it's about operating and putting controlling measures in place with a view to achieving long-term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers, and complying with legal and regulatory requirements and much emphasis is on meeting environmental and local community needs as well," Crous states.
"It is also very critically about managing the ethics and integrity of an organisation. This is the strength of any company, and it begins and ends with the people that make up that company. The fact that companies are willing to be transparent about their HR policies sends a strong signal to stakeholders about the long-term ability of the leadership of a company to mobilise their people around the market vision and financial goals of the company," continues Crous.
The direct benefits to companies that practise good people management are the general strengthening of the leadership brand and reputation of the business. Best Employers SA, a certification process in which leading organisations participate, in order to validate, benchmark and promote their employer brand, has been running for twelve years.
According to Crous it has become evident that what sets a company apart has a lot to do with their employer brand - that this positive brand exists only because good people policies exist.
"This research focuses on looking at the way companies are engaging and communicating with staff, we look at their policies around performance management, employee development, diversity management, rewarding and recognition and corporate social responsibility policies, companies really have to be willing to be scrutinised."
Joyce Baloyi, operations manager at the CSIR, one of the 56 companies certified as a SA's 2010/ 2011 Best Employer believes that policies guide practices and accountability. As part of being accountable, the CSIR also has a committee responsible for reviewing its policies so that it can confidently communicate these to the relevant stakeholders. Through campaigns such as SA's Best Employers, the CSIR re-enforces its quality application of its policies and practices. "The CSIR participates in SA's Best Employers research because the process is transparent in its undertakings and really promotes shareholder welfare," says Baloyi.
Crous adds that all of the companies that have participated in the campaign in the past, including big names such as Coca-Cola, Accenture, SAP and Mr Price Group, have shown tremendous commitment to ensuring solid talent-management infrastructures. "Furthermore, trends indicate that during times of heightened global risk, emergent economies such as South Africa experience more investment potential - companies accountable to their stakeholders will be better positioned for growth," she concludes.
For more information, go to www.bestemployers.co.za.
