Abstract
South Africa has experienced a significant increase in governance failures created by poor and unethical leadership. These governance failures hurt the economy, and they have occurred in both the private and public sectors, and were exacerbated by the State Capture. There is currently no unified and comprehensive framework for screening and evaluating the competencies and qualities of directors in South Africa’s State-Owned Companies (SOCs). As such, the primary objective of this study was to develop a framework for screening and evaluating the competencies and qualities of directors in South Africa’s State-Owned Companies (SOCs). This framework can be used to screen the competencies and qualities of potential board candidates before they are appointed to serve as board members in SOCs. Furthermore, the framework can assist in evaluating existing board of directors in SOCs to ensure they have the relevant skills combination to oversee these SOCs.
The relevant literature was reviewed and analysed to identify generic competencies and qualities of directors and to assist in developing questions for the two rounds of the Delphi Process. From the literature analysis, 24 individual competencies and qualities were identified; eight competencies and qualities of directors as a collective were identified, and four screening processes and four evaluation processes were identified. The Delphi process was selected as the ideal methodology for this study as it allowed the confirmation, ranking, and rating of identified competencies and qualities of directors by a panel of experts.
In the first round of the Delphi process, experts had to confirm whether the identified competencies, qualities and screening, and evaluation processes were prerequisite or acquirable. In the second round, the competencies, qualities, and processes that were considered prerequisite by more than 50% of the experts were then rated and ranked from 100% (Non-Negotiable) to Below 70% (The nice to have). The outcomes on rankings influenced the design of the Framework for Screening and Evaluating the Competencies and Qualities (FSECQ) of directors in SOCs. The FSECQ is recommended as an instrument in the study for screening potential board candidates before they are appointed and for evaluating the skills combination of existing boards of directors
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since it is critical to have suitable board members with the required competencies and qualities to oversee SOCs.
Keywords: Board members; Competencies; Qualities; Corporate Failures; State-Owned Companies.