MANAGEMENT: The Revolutionary Governance Assessment Instrument
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The Institute of Directors in Southern Africa (IoDSA) has introduced a revolutionary new tool to help measure, enable and report on corporate governance in all types of organisations. More than three years in the making, with the support of its founding partners, the Governance Assessment Instrument (GAI) is set to become a nationally-accepted benchmark for measuring how various organisations perform against the IoDSA’s King Report on Corporate Governance, which together with relevant legislation sets the standard and principles for corporate governance in South Africa.
With all relevant information at hand, the easy-to-use, web-based GAI tool can be used to evaluate an organisation’s corporate governance within the space of a few hours. And for enhanced credibility in reporting, it is capable of being independently verified.
“Given the enormous emphasis placed today on a company’s reputation, it is of vital importance that companies demonstrate their efforts in ensuring good corporate governance,” said Romahlo, referring to a McKinsey report which found that people are prepared to pay up to a third more for shares in well –governed companies.
“With this in mind, the GAI helps organisations prove their diligence in running their organisations responsibly, a key factor in winning favour with citizens, prospective customers, shareholders, donors and others.”
The GAI has been launched with a module that’s specifically designed with public companies (in accordance with JSE SRI requirements) and large private companies in mind.
“This is useful both for listed companies, as well as those that are considering listing and would like to see how they measure up in terms of regulators’ requirements,” said Romahlo.
Further modules to come include public sector organisations, medical schemes, retirement funds, NPOs and smaller companies, with future consideration to integrate BEE rating functionality.
“An exciting prospect is that once a critical mass of organisations within a given sector is reached, the IoDSA will be able to establish a benchmark for corporate governance in a particular sector,” she said. This will, however, only involve organisations that have consented to their information being shared.
All information submitted is hosted securely by MWEB, with a guarantee of complete confidentiality. “In fact, the firewalls in place are so secure it’s really only a user’s username and password that become the weakest link.”
“As the IoDSA, we’re extremely excited about the GAI as a tool for promoting corporate governance in South Africa,” concluded Romahlo. “We’re confident of its general uptake and excited about the implications of its widespread use on growing overall trust in the operation of the public and private sectors in South Africa.”
Business News Sector Tags: Management|