South African company directors spend more time on board matters than their global counterparts, according to results of a survey released on Friday.
”At an average of 20 hours per month, South African directors devote 17% more time to their efforts than the global average according to the 31st Annual Board of Directors Study,” said Korn/Ferry International, a management consultancy which
released the results.
Company directors in France spend 15 hours a month on board duties, and Germans 18 hours a month, said Didier Vuchot, chairperson of Korn/Ferry Europe, in a statement.
”The international average is 17 hours a month,” said Vuchot, in South Africa to launch the study on behalf of Korn/Ferry’s local partner, Leaders Unlimited.
This was the first time South Africa was included in the global survey, which polled around 1 000 board members from 14 countries in North and South America, Asia Pacific and Europe.
Since the introduction of the King 2 report on improved corporate governance, South Africans are less likely to accept directorships.
This accords with international trends. The study found respondents in the United States less likely to accept board invitations since liability doubled under the Sarbanes-Oxley law.
The Sarbanes-Oxley Act, which was passed by the United States Congress after a series of accounting scandals including the Enron affair, placed onerous requirements on executives to ensure their internal audit procedures are sound.
Thirteen percent of respondents in the US would not accept a directorship in 2002 because of the risk of liability, and this has increased to 29% in 2005.
”We know from the experience of Leaders Unlimited… that this also applies to the situation in this country where the greater responsibility accorded to directors by King 2 has scared off many would-be directors,” Vuchot said.
Complying with new corporate governance rules was both costly and time-consuming for boards worldwide, the study found.
”Dealing with compliance and its fallout comes at a significant cost, not only monetary, but in time commitment, focus, productivity, risk, and the reduction of qualified talent able to serve,” Vuchot said.
In the US, for example, 99% of respondents said their boards had complied with the Sarbanes-Oxley law at an average implementation cost of $5,1-million. – Sapa