Corporate governance is sound within South Africa’s largest banking groups, an independent review concluded on Tuesday.
Senior advocate John Myburgh, who conducted the probe, said no serious breaches existed.
”Further, the five banks are adhering to high standards of corporate governance,” he told reporters at the release of his report in Pretoria.
”Vigilance, however, was required to ensure continued compliance with the standards of governance which are constantly evolving in South Africa and internationally.”
Registrar of Banks Christo Wiese, who commissioned the review in August 2000, said the investigation had been a fruitful exercise.
”The general message is that our banks are in good hands.”
The five banking groups under evaluation were First Rand, Standard, Absa, Nedcor, and Investec.
Banking Council chairman Jacko Maree said the review was a detailed and a fairly gruelling process.
”The conclusion indicates that South African banking is in pretty good shape,” he said.
”This re-affirms the confidence we should have in the banking sector.”
Deputy governor of the SA Reserve Bank, Gill Marcus, said the central bank was pleased with the ”good-news story” of the review.
Ways to evaluate corporate governance on a continuous basis were under discussion, she said.
Myburgh said breaches he did encounter were not of a serious nature.
He expressed concern over the level of expertise found among non-executive directors on the boards of banks, and recommended that they be given training. There were not enough ex-bankers to serve on such boards.
”There is, however, sufficient experience among non-executive directors to ensure that proper checks and balances are in place,” Myburgh said.
He said boards of directors should not comprise more than 20 members, proposing 16 as the ideal number.
Maree said the banking council took Myburgh’s recommendations to heart, and banks would seek to improve their performance where necessary. – Sapa