The King II Code of Corporate Governance, which recommends good practices for listed entities in South Africa, has always been in favour of companies having non-executive representation on the boards as well as the committees of listed companies. The reasoning behind these recommendation went as follows:
- non-executives are relatively impartial
- they bring different expertise and strategic input, being seperate from the operational running of the company
- they should be in the majority on the remuneration and audit committees in order to represent shareholder interests
PWC brought out the Non-Executive Directors Best Practices and Fees Report which was of far more pertinence in 2009 than in any other time. Amid bailouts in developed countries and exorbitant remuneration, non-executives are either being looked to highlight problems or to shape up their own accountability. That aside, in this country a professional non-executive director is a full-time career.
As an afterthought, why do boards get ‘remunerated’ and ‘compensated’ for their time, whilst workers get ‘wages’ or a ‘salary’?