Corporate governance and marketing may seem like unlikely bedfellows, but it's high time that they get cosy together. A current case in point is Eskom, where its marketing team must be having sleepless nights about how to salvage that parastatal's reputation. The marketing director has a key role in protecting the brand and reputation of a company - arguably its most important asset - and the governance and sustainability of any company are integral to that asset.
The release of the 2009 King Report on Corporate Governance in SA (King III) in September, is a timely reminder to marketing directors across all sectors in South Africa that they need to be more involved in corporate governance issues - a reminder which is welcomed by the Marketing Association of South Africa.
King III is a South African code of enterprise governance, covering all types of companies and organisations. It is rooted in an international drive to improve governance, but it adopts a code-driven approach as opposed to legislation. One of its main objectives is to obtain internal buy-in from all organisations to an ethical and corruption-free standard of enterprise governance.
King III advocates a code of standards for governance structures in companies which ensure that there are no conflicts of interest on boards and directorships, and which instil accountability, along with ethical management and ownership. Its standards include measures such as the establishment of independent audit committees, company secretary rules, financial reporting standards, etc.
King III is also part of the move towards sustainability, including environmental sustainability. Companies are required to report on not only their bottom line, but also on a wider range of issues, such as environmental issues as well as their contribution to social and community investment (CSI). Indeed, King II identifies five integrated capital aspects for reporting on - financial, human, natural, social and manufactured/technology.
Under King III, governance, strategy and sustainability have become inseparable - and of particular relevance to the marketing sector. When the sustainability of an organisation is at risk, so is its reputation and brand, which is why the marketing director should be involved in setting governance standards for a company.
The Marketing Association believes that it has become critical for marketing to assume a more professional status and for marketing directors to play a strong role in company boards and directorships. This can be achieved through setting up a professional body that establishes competency standards and enforces a code of ethical conduct.
The Marketing Association therefore welcomes King III as a significant development and we support its codes on ethical enterprise governance and ethical and integrated reporting. We also applaud King III's stance on protecting the brand and reputation of a company and urge company directors to look to their marketing directors for analysing their risks to brand reputation and assets, and ensuring that these risks are mitigated.
A company cannot expect to protect its brand if the person mainly responsible for brand and reputation does not sit on its board. This has to change. Marketing directors need to be part of the board structure. It makes good business sense.
