Thesis (MBA)-University of Natal, Durban, 2002.The major aim of the study is to establish· whether a relationship exists between the
composition and effectiveness of the board of directors. Selection, particularly selection
procedures became relevant in the study, whether there were different selection
procedures for board of directors in South Africa. Developing common selection
guidelines and board composition profile is an important element of this study.
A case study research method was used to collect data. The sample was drawn from
KwaZulu-Natal based companies including 25 directors of companies not necessarily
members of the companies in our sample. The sample parameters included a listed
conglomerate, municipal funded, unlisted private, black economic empowerment and
parastal companies.
The conclusion is that, composition does impact on the effectiveness of the board of
directors. Secondly, boards of directors have different composition profiles.
Furthermore, their selection procedures differ to an extent. These differences are driven
by the needs of the organization rather than sectoral location. However, sectoral
imperatives do have an influence, which cannot be completely excluded.
Whilst, the study found that there were certain uniform requirements to be met by all
companies in terms of corporate governance, there were certain instances where the
universality of guidelines and/or models and/or perspectives were suspect due to a
number of factors. Accordingly. recommendations and/or guidelines are outlined to
improve effectiveness of the board of directors. These entail amongst other issues:
~ Board Structure and size
~ Board Composition
~ Board Selection
~ Board Induction
~ The Chairman's Role
~ The Roles of Chief Executive Officers
~ The Role of Executive Directors
~ The Role of Non-Executive Directors
~ The Executive Director
~ Board Committees
~ Gender Equality and Diversity
~ Compensation of the Board
~ Board Appraisal / Evaluation
~ Shareholder Activism
Enforcement takes precedence over voluntary compliance to corporate
governance in the guidelines recommended in this study