2. Eastern Cape Branch Seminar 5 – 6 September 2013 Good Corporate Governance By: Louise Muller, President of IMFO, 2012/13 – 2013/14

3. Points of Discussion What is Good Corporate Governance? Who exercises it? How is it exercised? Where do I start? What is the role of IMFO? – The Institute – Vision – Mission – Main Objectives

4. Good Corporate Governance What is Good Corporate Governance? Good – effective Corporate – enterprise wide, covering the distribution of rights and responsibilities among all participants - Councillors, officials, creditors and debtors, regulators, auditors, any stakeholders and citizens Governance – the mechanisms for monitoring the implementation of actions, policies and decisions in the organisation. “a system of law and sound approaches by which corporations are directed and controlled focusing on the internal and external corporate structures with the intention of monitoring the actions of management and directors (Councillors), thereby mitigating agency risks which may stem from the misdeeds of corporate officers”

5. Good Corporate Governance (2) What is Good Corporate Governance? The duty of care and skill; and Fiduciary duties. King III key principles: Leadership Sustainability Corporate Citizenship

6. Corporate Governance Implementers Who exercises Corporate Governance? The Mayor? Councillors? Municipal Manager? Management Team? Supervisors? Citizens? You? Me? All of us? We ALL should exercise effective governance to make it corporate!

7. Exercising Corporate Governance How is Corporate Governance exercised? (1) Effective Leadership – no matter what level of the organisation you find yourself at and characterised by: – Ethical values of responsibility, accountability, fairness and transparency and based on the moral duties that find expression in the concept of Ubuntu – Responsible leaders that direct strategies and operations with a view to achieving sustainable economic, social and environmental performance.

8. Exercising Corporate Governance How is Corporate Governance exercised? (2) The moral and economic imperative of the 21 st century: sustainability – this should be viewed both as an opportunity and a risk – nature, society and business are interconnected – a fundamental change is required to ensure sustainability – sustainability must also be considered after a disaster

9. Governance Priorities What should I focus on first? King III deals with: – Ethical leadership and corporate citizenship – Accountability of the Board and Directors (Council and Councillors) – Role of Audit Committee – Governance of Risk – Governance of Information Technology – Compliance with laws, rules, codes and standards – Internal Audit – Governing stakeholder relationships – Integrated reporting and disclosure Work on BUSINESS CONTINUITY based on RISK ASSESSMENT

10. Governance Priorities What should I focus on first? (2) Business Continuity Processes and procedures an organisation puts in place to ensure essential functions can continue during and after a disaster No organisation wants to suffer a breach of its information security defences – and this cannot be afforded with the POPI Act Can your organisation survive the fines in terms of the CPA? Business Continuity management therefore addresses an organisations ability to: – Limit the effects of a crisis; – Provide for uninterrupted services; – Ultimately recover from the crisis.

11. Governance Priorities Business Continuity vs Disaster Management Disaster Management focuses on: – saving and preserving lives in the event of disaster and providing humanitarian relief to affected persons after the event – Saving and preserving infrastructure in the event of disaster and determining and implementing rescue and salvage operations Covers: Disaster Prevention, preparedness, relief and recovery Business Continuity focuses on – Resuming critical business operations in the aftermath of a disaster Covers: limiting the effects of a crisis, provision of uninterrupted services and ultimate recovery from crisis

12. Governance Priorities What should I focus on first? (3) Risk Management Considers: Sustainable service delivery; Reduction in fruitless and wasteful expenditure; Innovation; Informed decision making; Prevent fraud and corruption; Enhance project and programme management; Enhance oversight capability.

13. The Institute A professional body in local government finance that was established in 1929 An old “Section 21 company”, registered as a Non Profit Organisation (or NPC, with Members) A constructive role player in policy formulation processes in local government finance

14. Vision The recognized professional body for the development and promotion of municipal finance officers and related governance practitioners This vision has been enhanced by the adoption of other governance roles in LG – Audit & Risk Charter & the Performance Management Forum

15. Main Objectives To further the interests of local government in the financial and related areas by: – Advising institutions, commissions and other bodies and persons; – Training and advancing of knowledge of members; – Promotion of interests of the profession of municipal finance officers and related professions

16. Main Objectives (2) To promote the interests of Finance and related professionals in the Public Sector and to protect the interests of the public through strict enforcement of the IMFO Code of Conduct and Ethics by embracing the following objectives: Developing and registering appropriate qualifications Registering Professionals as its members Constant renewing of members’ registrations Assessing and promoting programmes at higher learning institutions Regulating activities within the local government finance profession via a Code of Conduct and Disciplinary Procedures

17. Main Objectives (3) Monitoring and tracking the Continuing Professional Development of Members Developing and implementing the identification of practical guidelines on process issues in a focus area Making submissions pertaining to proposed legislation to sector departments as and when requested

18. Main Objectives (4) To consider, where necessary, research and comment on existing and proposed legislation affecting local government; Cooperate with other professional bodies Advise National and Provincial Government, related Institutions and other recognised National Associations on matters affecting local government Provide opportunities and platforms for exchange of views, knowledge and best practice amongst members To undertake research into municipal finance and governance in order to promote efficiency and enhance the available core body of knowledge

19. Institute Council

20. Thank you