Chair of the Future Accelerator of change - Deloitte
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Chair of the Future Accelerator of change May 2021
Chair of the Future – South Africa 2021 |
Accelerator of change
Contents
Foreword 03
Black swan events are increasing the pace of
change and shifting priorities 04
The five dimensions of the Chair of the Future 14
Ten pieces of advice to the Chairs of the Future 20
Looking ahead 22
About this research 23
Endnotes 23
Contacts 24
1
Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
Foreword
Welcome to the first edition of the Chair of onto the next generation of leaders
the Future – South Africa. This report forms to help them to build more resilient
part of an international series of reports organisations and a just society. I was
When we embarked on this journey and is based on interviews with Chairs and excited to hear strong commitments to
non-executive directors (NEDs) of leading skills development and talent development
late last year, I could have not imagined companies operating in South Africa. and enjoyed the frank conversations about
diversity and social responsibility. These
the support we would receive from When our colleagues in the United
Kingdom (UK) released their first Chair of
conversations made me confident that
many organisations in South Africa are in
so many leading Chairs and their
the Future report in 2017, the world was a good hands.
completely different place. By the time I
was appointed Chair of the Deloitte Africa My goal for this project is to kickstart
willingness to participate in this project. Board in 2020, the world was in the midst conversations about building and growing
of a global pandemic. Navigating this the Chairs of the Future. We at Deloitte are
I am very grateful to my fellow Chairs pandemic has probably been the greatest
test of any leadership team and it has been
committed to support Chairs in building
a platform that will allow them to identify,
Ruwayda Redfearn
Chair of the Deloitte Africa Board
who made the time to share their no different at Deloitte. grow, and empower the next generation
of leaders, and in driving excellence in the
experience and knowledge with us.
The pandemic has shifted priorities. boardroom.
It has made us reflect on the way we
run companies, particularly on the When we embarked on this journey late
We thank the contributing Chairs for responsibility we as corporate South last year, I could have not imagined the
Africa have to society and our staff. It support we would receive from so many
their commitment to mentoring and has shone the spotlight onto the many
socio-economic challenges with which
leading Chairs and their willingness to
participate in this project. I am very
supporting the Chairs of the Future. South Africa grapples, including high
unemployment, and unacceptably high
grateful to my fellow Chairs who made
the time to share their experience
levels of inequality and poverty. and knowledge with us. We thank the
contributing Chairs for their commitment
However, I am encouraged by the to mentoring and supporting the Chairs of
conversations we have had with Chairs the Future.
of leading companies. I sense that these
Chairs have a strong willingness, in fact, I hope you find the Chair of the Future –
a sense of passion and purpose, to South Africa useful and I look forward to
contribute to our society and to ensure your feedback.
that their skills and experience are passed
2 3
Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
Black swan events
are increasing the
pace of change and
shifting priorities
Navigating uncertainty While the Covid-19 pandemic is hopefully World Uncertainty Index – 1990Q1 to 2020Q4
a once-in-a-lifetime event, it would be
is a critical leadership “The pandemic has emphasised
negligent and irresponsible for Chairs
that the world has been ill-
skill. While organisations to assume that this is the last global 60 000
prepared although we were pandemic or black swan event. Therefore,
prepare for known and forewarned.” it is crucial that Chairs drive a culture of risk
unknown risks, dealing sensing and actively encourage scenario 50 000
planning to increase the preparedness
with so-called black swan A key element of a black swan event, of their organisations to deal with future
events is the true test of such as the global COVID-19 pandemic, shocks and the impact of climate change.
40 000
is the increased level of uncertainty and
leadership. According to ambiguity. As infection numbers have
the World Uncertainty increased and governments across the
world have introduced measures to deal “The Chair of the Future will 30 000
Index,1 global uncertainty with the pandemic, companies have had to need to manage two things:
has been relatively high for continuously respond to this ever-changing firstly, ambiguity and secondly,
operating environment, changing the
about 10 years. However, demands on and the role of Chairs.
uncertainty.” 20 000
COVID-19 has pushed
While certain changes to the role of boards
uncertainty to new levels. and Chairs had already started to emerge
10 000
prior to the pandemic, COVID-19 has acted
as an accelerator of change. As much as
COVID-19 has been devastating from a 0
social and economic point of view, it has 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
also acted as an accelerator, fast-tracking
change, and having a major impact on
Source: Ahir, H, N Bloom, and D Furceri (2018), January 2021 update
board agendas, shifting priorities to areas
previously regarded as “less important”.
4 5
Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
Becoming increasingly hands-on More time-consuming and demanding
Being more actively involved in the As a result of the increased demand As NEDs seem to be less likely to hold
“What can go wrong with Chairs business is beneficial to Chairs as they feel “In the US, they want you to “I am available 24/7 to EXCO, on Chairs and NEDs in terms of time multiple NED roles at listed companies, the
it provides them with more insights into allocation, it seems to have become less pool of future NEDs and especially future
is that they may struggle to know have skin in the game. And King interact with the CEO regularly
the state of the organisation and more common and attractive for NEDs to be on Chairs needs to be expanded. Many of
where to stop and that they opportunities to offer better guidance and doesn’t want you to have skin in via phone, WhatsApp, etc. at any multiple boards or to chair more than one the Chairs report that they prefer to “grow
get too involved in day-to-day expertise to the executive team on a more the game. These are concepts time. It’s the nature of the job.” board. Currently, less than one-third of their own timber” when it comes to filling
business.” regular basis. This on-going engagement which have to be revisited. I Chairs of JSE Top40 companies sit on more leadership positions in their organisations.
with various parts of the business also than two boards of listed companies and This poses the important question of what
struggle with the idea that you The move towards being more hands-
enhances the quality and depth of none of these Chairs sits on more than role Chairs will play in developing future
Given increased uncertainty, the information on which the NEDs will have to are either NED and governance on and the need for more frequent four boards of listed companies. board talent. One potential solution to
rapid advancement of disruptive base their decisions and guidance. is stronger, or you are executive engagement with the rest of the board expanding and developing future board
and the executive team is reflected in the talent is to encourage executive and
technologies and the growing complexity Chair and the governance is “Being an NED is not a quarterly
of organisations and markets, many time Chairs allocate to fulfilling their role. senior management to seek out board
weaker.” This does not necessarily mean that there engagement anymore, but you
Chairs feel that they have had to become opportunities in non-competing industries
“In South Africa you find politically are more frequent formal board meetings,
more hands-on, to support their have to dedicate more time and, in so doing, gain experience as an
organisations’ efforts to navigate these well-connected people as but rather that there is increased demand NED. However, this needs to be managed
“I think a chair needs to be much to make sure you get into the
new circumstances. Most Chairs feel that chairs. But this does not really for formal and informal communication carefully to avoid a shortage of executive
more involved. You can’t be a between the Chair, the board, and the zone of the managed trusted leadership talent, as seen already with
there is a fine line between being hands-on help. Going forward, this will
as a Chair and being an executive and that faraway figure head. You need executive team. relationship. Making sure that the limited availability of black female
cripple businesses. You want a
they must tread carefully in this regard. to understand the business the Executives are not running leadership.
Chairs need to remember the ultimate role businessperson to be a chair Several Chairs attend committee meetings,
you are involved in. You are with some trying to attend all committee
away with decisions without NEDs
of an NED, which is to provide oversight, because they understand the
not effective if you only know meetings. While Chairs believe that it is knowing about it.” “In the past you had five or more
to challenge, and to guide the executives business world.”
by leveraging their experience and skills. A how to run boards... You will beneficial for them to attend committee NED roles, but now I think three
hands-on approach must not be confused meetings, this has also increased the time is enough or four maximum,
be able to fulfil your role better they spend on preparing and attending
with assuming an executive role and with Gone are the days when Chairs dropped especially if you chair a sub-
because you know the nuances meetings.
getting operationally involved. Hands-on in in for quarterly board meetings and
of the operations, etc. It’s an all- committee. So, for the few
the context of a Chair means maintaining a an annual strategy session and then
current view of not only the business, but disappeared for the rest of the year. Going encompassing role.” people there are, their dance
also the environment within it operates. forward, Chairs will continue to be hands- cards are full.”
on as they will need to have their fingers
on the pulse of the organisation not only to
guide and advise the executive team, but
“The next generation of Chairs Number of additional NED roles in listed companies of JSE Top40 Chairs
also to better hold them accountable. The
have to be knowledgeable and Chairs of the Future will need to have an in-
14 14
really know the business, not just depth understanding of the organisation,
9
[be] figure heads. In the past they combined with an agile mindset that allows
them to effectively navigate unchartered 3
perhaps have been guilty of being
and uncertain waters.
figure heads.”
0 1 2 3
Source: Deloitte calculations based on Who Owns Whom
6 7
Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
Creating diversity – the right thing to do
While progress in terms of diversity of
diversity has developed into a business range of perspectives and new ways of Gender of JSE Top40 Chairs
boards has been made in recent years,
“Quite simply, you won’t have a imperative and is regarded by many the thinking. Considering increasing complexity
the JSE Top40 are yet to reflect the
“right thing to do”. and heightened uncertainty, boards can
successful company if you don’t demographics of South Africa. Only half of
leverage different perspectives and ways of
have a diverse board… We need thinking to increase the resilience of their
the JSE Top40 companies are chaired by 20%
to be bolder about bringing in “If you only have 30% females organisations.
Black Chairs and only one-fifth are chaired
on your board, you are missing by women.
younger people who bring the
diverse skills sets needed in the some big things and some Male
“You need to start opening In recent years, the concept of diversity 80%
boardroom.” potential firepower. So, it’s very and its definition have broadened. Chairs
yourself for not just a culture Female
important to have diversity on increasingly look beyond racial and gender
fit. If he/she is not a fit, you
the board, to bring the very best diversity in their boardrooms. Many Chairs
Given South Africa’s history, diversity in the need to ask yourself, “Are you agree that experience, which often comes
to the company.”
workplace and on boards has been on the tolerant enough? Are you open with age, is a key part of being an effective
agenda for many years. However, several for disruption? Are you open to NED and Chair. However, some Chairs
Chairs observe that conversations about argue that young NEDs add a unique
There is consensus among the Chairs someone who doesn’t look like,
diversity have changed in recent years. In that having a diverse board that better perspective to the board, especially in
the past, meeting diversity requirements doesn’t dress like you, doesn’t organisations where a large share of the Race of JSE Top40 Chairs
reflects South Africa’s demographics is
was often seen as a “cumbersome tick- beneficial for organisations. Diversity in speak like you?” customer base is the youth, or where
box exercise”; however, in recent years, the boardroom tends to provide a wider the board lacks certain skills related to
digitalisation, innovation, or sustainability.
Going forward, effective boards will have
a balance of skills, backgrounds, and
25 expertise.
JSE Top40 Chairs by age group
Black
47.5% 52.5%
“I think there is a skills gap. White
9 On our board, I’m looking for
5 diversity and that’s across
1
gender, skill and colour.”
>50 years 50-60 years 60-70 years 70+ years
Source: Deloitte calculations based
Source: Deloitte calculations based on Who Owns Whom on Who Owns Whom
8 9Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
Open lines of communication Responsibility to society
Prior to the pandemic, many Chairs had remuneration of executives, not matters society. Hence, putting the social and
“An ideal position between CEO already established open communication “The social and ethics committee related to ESG. This seems to contrast with ethics committee on a more equal
channels with their executives. However, shareholder activism in other markets, footing with other committees will be
and Chair is a close working used to be the runt of the pack
the pandemic, and the associated business such as the UK or the United States (US), important. Looking at the discrepancy in
relationship where you see and supply chain disruptions, remote and you see that evidenced in where shareholders scrutinise companies remuneration across committees, with
yourselves as partners without work, changing government regulations, the remuneration.” for their environmental and social impact. Audit Committee chairs at some listed
getting too close to not be able and customer implications have increased companies earning up to three times
the frequency from monthly or weekly more than their counterparts on the social
to challenge or disagree.” Many Chairs are aware of the important “If we as business leaders
conversations to almost daily calls. Given and ethics committee, it is questionable
the frequency of interactions with their role their companies play in society and don’t recognise the impact of whether the importance of the latter is
chief executive officers (CEOs), most are seeking ways to balance financial climate change and put it on fully appreciated.
Black Swan events and other shocks often
Chairs highlight that building a strong and sustainability and the profitability of
lead to heightened uncertainty. As much companies’ agendas, we will
trust-based relationship with their CEO is a their businesses with their responsibility
as COVID-19 has forced us to reduce not be sustainable. Chairs need “ESG has become so fundamental
crucial role of the Chair. towards the communities they operate
in-person interactions, effective, clear,
in or service. The public is increasingly to understand these issues in and has shifted from companies
and timely communication between the
looking to the private sector for solutions order to be able to drive these being seen, to wanting to
board and the executive team has played “During the course of last year, to major socio-economic issues, including
and continues to play a fundamental role agendas.” demonstrate what their views
the frequency of talking to CEOs inequality and poverty, access to education
in responding to the pandemic and its and actions are.”
of the company where I am and healthcare, and climate change.
impact on business, the economy and
society. As such, many Chairs confirm that Chair went to daily calls. It didn’t Given the high level of inequality in South
Interestingly, there are divergent views
the frequency of communication between about ESG, depending on the industry.
matter who initiated it, and some Africa, balancing financial, environmental,
In this context, the Chairs of the Future
them, their boards and their executive In the extractive industries, for example, will be critical in empowering the social
days it would be a WhatsApp social and governance (ESG) objectives
the social and environmental impact of
teams has increased substantially, and ethics committee to become the
voice message, but there were is a pressing issue. Finding this balance
especially at the onset of the pandemic resource companies has been under the company’s social and ethical conscience
has become even more relevant during
when new information became available daily interactions because it was the pandemic. While the impact of
spotlight for some time now. and to steer companies towards a more
almost daily. necessary.” just and equitable future. Part of this
lockdown and the subsequent decline One of the reasons why companies empowerment process will be ensuring
in economic activity has been severe, struggle with finding the balance between that the board contains the right mix of
low-income earners have been hit the financial objectives and ESG objectives is skills and experience and that ESG matters
hardest. According to the BankservAfrica the difficulty in measuring the latter. While are firmly on the board’s agenda. Elevating
Take-home Pay Index (BTPI) published in measuring the financial performance the importance of these matters will
November 2020,2 income earners taking of a company follows well-established embed ESG into the organisation’s strategy
home less than R30 000 per month were processes, the measurement of social and and shared purpose and will support the
the hardest hit by the economic slowdown environmental impact seems to be more emerging trend towards more holistic
during the pandemic. complex. reporting that focuses beyond financials.
In recent years, there has been a rise in In the past, social and ethics committees
shareholder activism in South Africa, which focused on compliance with B-BEE
is set to increase the focus on matters requirements. This is changing. Going
related to sustainability, environmental forward, social and ethics committees
and social matters further. However, some will play a critical role in bringing ESG
Chairs question the “maturity” of these matters to the top of the agenda and, in
activists and point out that at Annual this context, the committee can serve
General Meetings (AGMs), the key focus as a catalyst driving the organisation’s
is mostly on financial performance or social and environmental impact on
10 11Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
Technical skills are not good
Moving wellbeing into the spotlight enough anymore
Since the onset of the pandemic, the Chairs of the Future will require a blend of
“Prior to the pandemic, you took focus on staff wellbeing has increased “Wisdom is an everlasting issue. It skills, combining strong technical expertise
substantially, being discussed more with exceptional interpersonal and
wellness of your people for doesn’t change with technology…
regularly and deliberately in board leadership skills. Empathy and emotional
granted. But with the pandemic meetings. An important lesson learned Human relationships don’t intelligence are already important skills for
it came to the boardroom.” from the current pandemic is that staff change. Maturity, resilience, Chairs but are set to become even more
wellbeing in all its facets should form an ethics, and wisdom are really important as complexity and uncertainty
integral part of a healthy work culture. within organisations and the operating
Most Chairs agree that the pandemic has important.”
Creating a healthy work culture, that environment increase.
reinforced the focus on people-related places people at its core will continue to
matters. While staff wellbeing and play an important role in building resilient Given the need to respond to an ever-
There is no doubt that the job of Chair is a
mental health have always been items organisations that can navigate uncertainty changing business environment and often
demanding one that requires a high level
on corporate agendas, the pandemic and thrive post the pandemic. To this end, unpredictable external factors, Chairs
of experience and strong technical skills.
has served as an eye-opener for many new skills will be required on boards, while of the Future will need adopt a lifelong
However, as the role of the Chair evolves,
and brought the mental and physical existing skills related to human capital learning approach that is underpinned
so will the skills required to be an effective
wellbeing of staff, executive teams, and must be embraced and leveraged more by curiosity. Furthermore, Chairs need to
Chair. This does not necessarily mean that
the board into the spotlight. As much as effectively. continuously assess and sharpen their
a Chair or board requires completely new
boards and executive teams have focussed leadership skills to effectively fulfil their
skills but need to prioritise and use certain
on the financial sustainability of their increasingly complex role and lead their
“People became a focal point... skills differently.
organisations during the pandemic, there organisations into the future.
is an increasing realisation that matters Essential services, frontline staff For example, a chartered accountant
related to mental and physical wellbeing protection and issues related (CA) qualification and audit or accounting “You are looking for a person who
cannot be taken for granted and need to
to mental health were all new experience used to be one of the key
has the knowledge, experience
be taken a lot more seriously.
agenda items.” pathways to becoming a Chair. At present,
about one-quarter of Chairs of JSE Top40 and skills that are a given, but
“The pandemic has taught us companies have a CA or audit background. you also need someone with
However, several Chairs expect that the sound values and principles who
that our job is about two things:
past dominance of CAs will fall and a pool
saving lives and preserving must conduct business in an
of Chairs with a more diverse background
lives. What is the duty of the will emerge. ethical matter.”
business for tomorrow? It’s not
shareholder value maximisation “If you become CEO of blue-chip A Chair of the Future’s skillset needs
– it is to simply survive.” company, you should have all to be supplemented by sound values
and principles. Considering heightened
the technical skills, but you
uncertainty and recent corporate
need a 21st Century EQ… the governance failures, being guided by a
Chair of Future will be a more steadfast moral compass will be crucial.
approachable person with more
social skills.”
12 13Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
The five dimensions of
the Chair of the Future Company ambassador
As identified in the UK Chair of the Future report,3 there are five dimensions of the The overwhelming feedback from Chairs One Chair highlighted that because of the One of the Chairs recalled how he and the
was that the CEO should continue to be pandemic, CEOs themselves have been CEO mapped out the firm’s stakeholders
Chair of the Future. While research reveals that these dimensions are also largely the face of the company. But there was forced to navigate increased complexity and decided who should be the face of the
applicable to the South African context, there are distinct local nuances to them. also recognition that the stakeholder within the stakeholder landscape. This has business and which issues or messages
landscape for Chairs is widening, far led the Chair to be more supportive and needed to be discussed with each of
These dimensions cannot be viewed in isolation from each other, as they are beyond the shareholder register. This to offer to be the voice of the business these stakeholders. Such a thorough
interlinked and interdependent. Given this interconnectedness of the five dimensions includes government, regulators, trade in some stakeholder conversations, “divide-and-conquer” approach is a trend
unions, employees, customers, and particularly where the Chair could leverage that Deloitte sees globally. Chairs in the
and the common touchpoints between them, Chairs of the Future will increasingly the broader communities in which the an existing relationship. UK have highlighted the need for Chairs to
become accelerators of change that embrace diversity. business operates. “listen hard” and to convey the business’s
Some offered an even bolder opinion that narrative on behalf of the organisation.
It was a consistent view that Chairs should Chairs should play an increasingly more Furthermore, in the light of recent
continue to make themselves available ambassadorial role, being an active voice governance failures, engagement with key
to shareholders. However, in comparison on the issues which matter the most to the investors will continue to be important for
to the US, UK and European markets, business, themselves and society, including Chairs, given that the board is ultimately
it sems that relationships between the socio-economic and environmental issues. accountable to these investors.
Chair and investors is immature in South Chairs are in the privileged position of
Africa. In fact, even in moments of crisis, becoming accelerators of change. This approach requires deliberate planning
Company ambassador
the invitation to investors to engage and close alignment between the CEO and
Represents the company in society and engages with shareholders and stakeholders,
with the Chair has been disappointingly Chair to ensure a consistent narrative is
including political and regulatory. Key messages include the need to adopt a narrative of
undersubscribed in South Africa.
“When it comes to shareholders, provided to all stakeholders. This level of
responsible value creation for multiple stakeholders. the Chair has to play a much coordination typically stretches beyond
more active role. We have large the role of the investor relations manager,
“Our CEO is very good being and often requires the support of a strong
Strategy provocateur shareholders, and some are
the face of the firm, but if a communications director.
Provoke and challenge the CEO and executive team to develop a longer term strategy with not easy. Our job is to protect
appropriate horizon scanning to ensure longevity of the company. Apply periodic reviews of
minister, for example, wants the
the CEO. You need to pick your Given the importance of effective
both strategic and tactical plans to respond to pace of change and new disrupters. Ensure Chair, the CEO knows that he
battles. You need to know what shareholder engagement, aspiring Chairs,
alignment between the board and executive. can call on me and I make myself especially those without prior experience
each person is good at.”
available. If he wants me in a key as executive directors, need to explore and
meeting, I am happy to do it. It’s identify opportunities to build the required
Culture and talent cultivator skills for such important engagements.
Ensures the company is led by a strong CEO and executive team by providing support and not competition between the Irrespective of their views on who should
take up the ambassadorial role, most
challenge. Keeps a pulse on company culture across the workforce while providing deliberate two of us.”
Chairs agree that there needs to be a clear
support to leadership development and succession planning, beyond simply the CEO. “When we look at issues like
understanding by the Chair and the CEO,
who, under which circumstances and on
sustainability and governance,
Several Chairs indicate that AGMs are still
treated as “tick box exercises “by some which occasions, plays this ambassadorial those are the issues where I,
Guardian
Guard stakeholder interests by protecting the company’s reputation, performance and of their peers. In the future, Chairs need role. as the Chair, want to be the
shareholder value. Ensure a leadership culture that upholds a high standard of ethics and to be much better prepared to answer ambassador.”
questions, debate with, and accept The extent to which a Chair takes on
complies with good governance practices.
challenges from stakeholders. an ambassadorial role is influenced by
many aspects, including the company’s
Board conductor circumstances, the preferences and
Establishes the board composition with the right skills and experiences which are fit for the personality of the Chair and CEO, as well
future. Sets the board agenda and facilitates effective board conversations by harnessing the as external factors, such as the countries
talents and energy contributed by each of the individual directors. and sector in which the business operates.
In heavily regulated sectors, Chairs often
play an important ambassadorial role
in engagements with the regulator and
government departments.
14 15Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
Strategy provocateur Culture and talent cultivator
It is important that the Chair balances the Concerns related to the organisation’s One approach to external appointments
“Functions don’t make companies short-term objectives of the organisation “A lot of what I read a decade ago culture were raised by most Chairs when is the early identification of outside
with a long-term strategy that will ensure reflecting on succession planning. To candidates who are then brought into the
- ideas make companies. How was focused on the agenda, and
the long-term sustainability and resilience preserve the culture of the organisation, organisation and placed into senior roles a
do you challenge ideas while of the organisation. This balancing act how to run the annual strategy most Chairs prefer succession of few years prior to the planned departure
working from home? How do can be difficult, given declining CEO sessions and didn’t give me the senior leadership roles from within the of the CEO or Chair. This approach allows
boards challenge ideas of c-suite tenures. Instead, CEO tenure and strategy sense it was overwhelmingly organisation. In contrast to an external candidates to be tested and provides them
consistency need to be seen as a journey appointment, an internal candidate knows with the opportunity to learn about the
executives? You become too about people.”
where the organisation has an overview of the organisation’s culture, its people, how business and culture.
transactional when working from a strategy, infused with the experience of the organisation works, and hence poses
home.” the board. The 2021 Deloitte Global Resilience Report4 less risk to the culture. Many Chairs suggest that, going forward,
identified five key traits of resilience succession planning should not stop at the
To be an effective strategy provocateur, that help organisations to thrive under top-tier leadership level, but needs to go
Most Chairs agree that strategy the Chair of the Future needs to have solid
“The fishing pond for Chairs is at least a level down. Given the consensus
extreme conditions. Resilient companies
development is the responsibility of the technical skills and interpersonal skills, very small – and we need to that leadership succession planning should
are prepared, adaptable, collaborative,
CEO and the executive team. However, combined with maturity and experience inspire young people to better also start much earlier in, for instance,
trustworthy, and responsible. In this
Chairs play a crucial role in strategy that allow him or her to challenge the CEO. the CEO’s tenure, it is very important that
context, the culture of an organisation understand how the board
development as they are the key sounding Having the backing and the support of the executive team and the NEDs start
plays an increasingly important role in works so they can become good
board for CEOs and leaders of the board a diverse board will increase the Chair’s identifying suitable talent at an early stage
improving an organisation’s resilience
that approves the strategy. In addition, the effectiveness in this regard. Chairs of the Future. We need and growing these potential future leaders
during difficult times.
Chair plays an important role in “selling the to start growing our own timber by exposing them to various parts of the
strategy” to shareholders. business.
“When you do board assessments The importance of organisational within the organisation.”
culture was shared by many Chairs we
As important as the development of a and skills assessments, you want Deliberate succession planning will
interviewed. One Chair highlighted that
sound strategy is, it is equally important to ensure a balanced board. This Internal succession planning requires a continue to be an important task for
during the pandemic, the board specifically
that the strategy is implemented properly. Chairs going forward. Chairs need to have
includes financial and technology focussed on proper communication with deliberate effort to identify and grow the
Many Chairs argue that the monitoring next generation of leaders. It requires conversations with their CEOs at an early
skills so that when the strategy employees and keeping the culture intact
of the strategy and the assessment of close coordination between the Human stage about this. However, they need to be
as key measures to steer the organisation
how the business is doing vis-à-vis the is produced you can interrogate, Resources team and the senior leadership careful not to create the impression that
through the crisis and to prevent panic
strategy are key items on their board’s debate and argue with it.” of the organisation. this conversation is about an immediate
among employees. By setting the tone
agenda which therefore needs to be replacement of the CEO, but rather part of
within the organisation, the executive
well-structured and focused on relevant While most Chairs say that the internal the long-term planning to ensure stability
team and NEDs strongly influence the
strategic questions. appointment of a CEO is the preferred of the organisation. These conversations
organisation’s culture.
option, many agree that, under certain require maturity and trust from both the
Given the complexity of businesses and circumstances, an external appointment CEO and Chair.
Many Chairs highlighted that the current
the ongoing changes in the operating is appropriate, for example, when
pandemic has revealed how fragile life
environment, it is important that the there is a need to refresh or change
can be. Therefore, succession planning “A general practice I have followed
board has a diverse and balanced set of the organisation’s culture, to inject
should never be taken lightly and should
skills. Diversity and balance allow board new thinking and ideas, or when the over the years is: when I want
never start only a few months prior to the
members to better interrogate and business’s strategy needs to be revamped to change the culture of the
departure of Chair or CEO. Without timely
question the strategy. Chairs and NEDs
and appropriate succession planning a or recalibrated. The internal candidate organisation, then bring in
should be able to ask pointed questions pool might be inadequate, particularly
lot of organisations can be thrown into someone in from outside. But if
about the strategy. Unfortunately, working when technological or ESG skills are
crisis at the sudden departure or loss
remotely and conducting meetings virtually required. One Chair suggests that external you want to keep the culture, we
of leadership. Being unprepared for
may reduce the ability of the board to appointments may also increase in the pick from inside.”
succession is a real risk in South Africa, as
challenge the ideas of executives as the future, with the observation that the
there has been a steady decline in CEO
relationship may become too transactional. younger generation seems less likely to
tenure and unexpected resignations of
executives in recent years. stay with one firm for their entire career.
16 17Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
Guardian Board conductor
Many Chairs experience a sense of To fulfil their oversight function effectively, To have a well-functioning and effective An effective way to ensure the harmonious
heightened responsibility when they move the board needs to engage with the CEO board, Chairs need to focus on the board functioning of the board is to establish “The board agenda starts with
from being an NED to being a Chair. While and executive team to understand the composition of the board, the setting of well-functioning committees with strong
strategic initiatives. We need
the success or failure of an organisation risks the organisation faces. While it is the agenda, and board decorum. Chairs. The committees need to have
does not directly depend on Chairs, they important for Chairs to have a trust-based detailed discussions about their focus to be clear what the outcome
do play a crucial role in the firm’s success relationship with the CEO, they need to be In this context, a Chair often plays the areas and report back to the board, the is of every board meeting, we
by being the guardian and the head of the careful not to be too close to the CEO and role of a conductor. Like the conductor most relevant aspects of their discussions. don’t want to go down rabbit
oversight body of the organisation, holding to maintain their independence. of an orchestra who ensures that strings, This helps to reduce the risk of getting lost
woodwinds, brass and percussion play
holes. Rabbit holes are done in
CEOs accountable for their performance. in unnecessary detail and allows the board
Chairs of the Future must put the interests in harmony, a Chair needs to ensure that to focus the agenda on key strategic and committees.”
of the organisation ahead of personal the board is well balanced in terms of operational matters. In this context, the
“While failure and success do not interests. They need to be prepared to take experience and skills and that he or she company secretary plays a very important
depend on the chair directly, Chairs should not discount the value
tough and, at times, unpopular decisions in brings out the best in each board member role in streamlining the agenda and being
of board evaluations. Some Chairs and
he/she can play a big role in the the interest of their organisations, even if and sub-committee. The Chair creates an effective sounding board to the Chair.
NEDs might regard board evaluations
this means that they will not be re-elected an enabling environment that allows the
organisation’s success.” as a cumbersome exercise; however,
or will be voted out of their positions. executive team to succeed.
Above all, the Chair of the Future needs to
“The Chair of the Future won’t it can assist Chairs with identifying
be an older wise person, but the best board talent and weed out
In recent years, South Africa and many be guided by a steadfast moral compass.
“This ‘me, myself and I’ mentality underperforming NEDs. Several Chairs feel
other markets have witnessed several a person with experience,
as a Chair has ended. So, it is that if underperforming board members
high-profile corporate failures both in the
“Too often, you have examples of business acumen and mediation are not weeded out aggressively, Chairs
public and private sectors. Several Chairs the move from self to about the
over-charismatic CEOs pushing skills. Younger, mediator, not just miss the opportunity for meaningful
point out that some of these corporate board and getting the ultimate change on their boards.
failures are often the result of governance companies in wrong directions a successful businessman. He or
output from the board.”
failures, where dominant, over-charismatic because boards are not strong she has to be sympathetic and Chairs of the Future will increasingly take
or rogue CEOs have pushed companies in
enough – and don’t say “no” or empathetic to various things…to on the roles of moderator and facilitator,
the wrong direction and taken advantage For it to be successful, a board needs to
stand up to the charismatic CEO.” have emotional intelligence.” ensuring that the various views of the
of weak boards. In most cases, the boards be harmonious. However, a harmonious board are considered. This also requires
failed to discharge their oversight mandate board does not mean that NEDs need to the Chair to step into the background and
appropriately. To avoid future failures, be yes-men; instead, each board member While mandating and empowering provide others with space to contribute.
boards need to ask the right questions must feel comfortable contributing. It is committees to zoom in on their key focus
and focus on holding the executive team the Chair’s responsibility to ensure a board areas is beneficial and contributes to
accountable. environment in which everyone feels their the success of the board, it poses the
voices are heard and considered. In this risk that information or knowledge is not
context, some Chairs see the move to shared effectively. Similarly, information
“Entering the field to be a
virtual meetings as a big advantage, as it flow is impacted by the different levels of
defender or midfielder is forces Chairs to get everyone’s inputs. exposure to various stakeholders. This
completing different to being risk of discontinuity of knowledge is a key
the goalkeeper. You realise as “I view it as a partnership of
issue that Chairs need to be aware of and
the goalkeeper that a mistake address. As the conductor of the board,
equals, and I am the conductor the Chair needs to enable the appropriate
becomes a goal. As chair, you and orchestrator for a period of flow of information between stakeholders
are the goalkeeper. You’re a first time.” to ensure that all NEDs have access to
amongst equals.” all relevant information when making
decisions. This is of particular importance
for newly appointed NEDs.
18 19Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
Ten pieces of advice to the
Chairs of the Future
1 Invest the time in really 3 Seek feedback regularly (even as an 5 Create managed trust with the CEO 7 Embrace diversity
understanding the business experienced Chair)
Building the relationship with the CEO is one of the most South Africa is rich in diversity and there is richness in diversity.
It is crucial for a Chair to really understand the business beyond Feedback is crucial for you to identify areas for improvement
important aspects of your role as a Chair. The roles of the CEO To build a sustainable and resilient business, embrace diversity.
a “superficial level”. Without in-depth knowledge of and insights and avoid repeating mistakes. Seeking feedback might be seen
and the Chair can be lonely roles. As a Chair, your role is to make Your organisation, across all levels, should reflect all sectors
into the organisation, its operations, people, and customers, as challenging because you make yourself vulnerable, but it is
the CEO shine, not be an object of blame. Focus on creating a of your customer base. Avoid adopting a narrow definition
a Chair will struggle to provide meaningful oversight and important for taking the organisation forward.
managed trust relationship with the CEO through ongoing and of diversity or seeing it as a compliance issue: diversity
guidance. When accepting a Chair role, be open to learning
deep conversations. As a Chair, you need to dedicate a lot of is a business imperative which will create value and new
everything you can about the business. Practical tips:
time to make sure that you get into the zone of managed trust perspectives. It might be more comfortable for you to have
• Find out from your board members what works and does not
relationship with your CEO. Once you establish trust and mutual people around the table that look and talk like you, but the role
Practical tips: work in board meetings.
respect, you can work effectively together and reduce the risk of of the Chair is not meant to be comfortable.
• Talk to your predecessor. • Conduct proper “post-mortems” to find out where you have corporate scandals.
• Walk the shopfloors, visit various offices of the organisation, made mistakes and how you can avoid making them again. Practical tips:
and speak to as many stakeholders as possible. Don’t just talk • Leverage board assessments to get in-depth feedback and, if Practical tips: • Perform a gap analysis on skills.
to fellow NEDs or the executive team, but also talk to staff so necessary, don’t be afraid to remove non-performing board • Have open and honest conversations with the CEO. • Create a culture of inclusivity.
that you get a sense of what working for the organisation is members. • Seek to understand and learn about the CEO’s personality. • Encourage and listen to dissenting voices.
really like.
• Understand that the company secretary is a key ally in the • Don’t let executives run away with their decisions without
• Nothing stops you from asking for advice from the tea lady, • Consider creating platforms, such as a Millennial Board, to
feedback process and, in fact, in the life of the Chair. NEDs knowing about it.
the receptionist, or your driver. Get out of your boardroom engage and leverage your diverse workforce.
• It is important to reflect on and try to implement feedback. • Remember, it’s not a competition between the CEO and the
chair and sit at the reception area or lobby of your company
and observe staff and clients. Chair: you play for the same team.
8 It’s not about you
• Talk to your customers and investors, as they will appreciate 4 Empower your committees
you taking the time to talk to them and, in return, you will learn 6 Keep the ‘non’ in non-executive
The Chair plays a vital role in the organisation, but is not the
a lot about your organisation.
A board is only as effective as its committees. By empowering director organisation, nor its purpose. Being a Chair requires enough
your committees and their Chairs, you will be able to declutter maturity to step back and let others run the organisation. A
You are not the CEO. This may be a simple and obvious
2 Don’t take the job for the money the agenda and focus on the most relevant issues during the
statement, but it is profound. Recognising the importance of
Chair needs to have a deep passion for the business and the
board meeting. desire to make the CEO and executive team succeed. You are
separating these roles can be challenging for some first-time
first amongst equals and should not assume you have all the
The job of Chair often comes with status and great financial Practical tips: Chairs. Be respectful of the boundary between CEO and Chair
answers. It is not the Chair’s job to make all the decisions,
reward. However, this is not a good enough reason to accept and don’t overreach it. Be mindful when to act and when not to
• Be very careful and deliberate in picking the right Chairs for instead to give the board the opportunity to give their inputs.
the role. If you do, there is the risk that you take the wrong act. Sometimes a CEO wants to have a detailed and operational
your committees.
decisions. To be truly independent and put the wellbeing engagement with the Chair, but not always.
• Make sure that you have the right skills on the committees. Practical tips:
of your organisation before your own interests requires an
understanding of your purpose as the Chair. Your committees are the part of the board where the Realise that you are the link between the board and the • Be humble and accept that you are going to make mistakes.
“heavy-lifting” is happening. executive team, provide guidance and be a sounding board, but • Accept that you will have difficult board members.
Practical tips: • Recognise and leverage the depth of experience on your do not interfere with executive functions. Your job is not to run • Accept that you don’t know everything. But remember that you
• Don’t be afraid to take the right, but unpopular decisions, even board. Empower and encourage your NEDs to provide support the business, but to get the best out of your executive team and are capable of leading the board.
if they cost you your job as Chair. and guidance to the executive team and the rest of the to hold them accountable.
• Create an enabling environment that allows the executive
business.
• Be wary of NEDs that are dependent on their board fees, as team to thrive, by giving them space, providing support, and
Practical tips:
they might not speak their mind and only try to please you or sharing your experience.
management rather than challenge the organisation. • Ensure that the boundaries between executives and
non-executives are clear and well communicated.
• As Chair, make yourself available to all stakeholders (e.g. staff,
customers, unions, and communities) as you are seen as an
independent person not siding with the executive.
• Encourage NEDs to become avenues to which stakeholders
can share their perspective.
20 21Chair of the Future – South Africa 2021 |
Accelerator of change Chair of the Future – South Africa 2021 |
Accelerator of change
Looking ahead About this research
List of Chairs/NEDs interviewed • Harish Mehta
9 Do good While there is some light at the end of the COVID-19
tunnel thanks to the rollout of vaccines, the next shock, • Santie Botha • Bonang Mohale
be it another pandemic, a financial crisis or a natural • Thevendrie Brewer • Khotso Mokhele
South Africa faces many socio-economic challenges. Society disaster, is imminent and uncertainty is expected to
is increasingly looking to the private sector to help solve these • Graham Dempster • Kgomotso Moroka
remain heightened going forward. Given the prospect of
challenges. Understand that investors, small or large, bought future shocks, it is important that organisations reflect • Kunseni Dlamini • Sipho Nkosi
your organisation’s shares not just for financial, but also for on the lessons learned during the pandemic and use • Jannie Durand • Imtiaz Patel
social returns. As the Chair, you are in a privileged position to them to build more resilient and agile organisations for • Geraldine Fraser-Moleketi • Nigel Payne
make a meaningful impact on your company’s staff, suppliers, the future.
• Mike Hankinson • Marilyn Ramplin
and customers.
Given the rapid and continuous change in the operating • Roger Jardine • Malcolm Rutherford
Practical tips: environment and ongoing disruption from exponential • Suresh Kana • Khumo Shuenyane
• Be aware of the role you and the company play in society. technologies, it remains critical for organisations to have • Alistair Knock • Desmond Smith
• As the Chair, you can shape the conscience of your company. the right skills in their leadership teams. However, with
• Phumzile Langeni • Peter Surgey
increased complexity and rising demands on Chairs
• Make sure that you hire the right skills and that you empower • Mike Leeming • Phillip Vallet
and NEDs, there is a threat that these roles become less
your social and ethics committee, to drive change in your
attractive in the future. To mitigate this threat, companies • Sindi Mabaso-Koyana • Jeffrey van Rooyen
organisation and in society.
need to look at innovative ways to attract and retain • Jacko Maree • Louis van Zeuner
board talent. In this context, deliberate and effective
• Norman Mbazima • Gcina Zondi
10 Be yourself succession planning that embraces diversity will play a
central role in ensuring an adequate talent pipeline for
future boards.
If you sat on the board before becoming the Chair, don’t try and
emulate the previous Chair. Be your own person. It’s important Forward-looking organisations understand that as
to remember that all boards are different. You will have to deal much as new skills are required to respond to the
with different personalities, some of which will be aggressive changing business and technology landscape, emotional
and dominant. intelligence and human relationships are of paramount
importance to building successful and resilient
Practical tips: organisation for the future.
Endnotes
• Focus on developing your interpersonal skills and EQ to deal
with friction. As organisations evolve and adapt to an ever-changing
1 Ahir, H, N Bloom, and D Furceri (2018): World Uncertainty Index (January 2021 update),
• Stand up to board members when necessary, but in a environment, the role of the Chair will continue to evolve,
Stanford mimeo. Retrieved from: https://worlduncertaintyindex.com/data/
respectful manner, as you set the tone for the decorum of the too. Chairs will increasingly have to ask themselves:
2 BankservAfrica (2020): October 2020: A clearer picture of SA’s salaries and employment.
board. Retrieved from: https://www.bankservafrica.com/api/public/
• What role will our organisation play in society?
• Don’t be afraid to shake things up, it’s your board after all. blogblob/5fc7a1fb12787d0043370d20
• What skills will we need to play a meaningful role in
• And lastly, don’t forget to have some fun. 3 Deloitte (2020): Chair of the Future – Supporting the next generation of business leaders.
society?
Retrieved from: https://www2.deloitte.com/uk/en/pages/about-deloitte-uk/articles/chair-of-
• How will we ensure and maintain the quality of our the-future.html
talent pipeline?
4 Deloitte (2021): Building the Resilient Organization - 2021 Deloitte Global Resilience
• How are we going to measure our impact on society, Report. Retrieved from: https://www2.deloitte.com/content/dam/insights/articles/
environment, planet? US114083_Global-resilience-and-disruption/2021-Resilience-Report.pdf?icid=learn_more_
• How will we strengthen our transparency reporting? content_click
22 23Contacts
Ruwayda Redfearn Dr Johan Erasmus
Chair of the Deloitte Africa Board Chief Ethics Officer
Deloitte Africa Deloitte Africa
Email: ruredfearn@deloitte.co.za Email: jerasmus@deloitte.co.za
Nina le Riche Mark Victor
Partner and Deloitte Africa Board Partner
Member Centre of Corporate Governance
Deloitte Africa Deloitte Africa
Email: nleriche@deloitte.co.za Email: mvictor@deloitte.co.za
Delise van der Byl
Head of Clients
Deloitte Africa
Email: dvanderbyl@deloitte.co.za
Authors
Leisl van Zyl Simon Schaefer
Board & Executive Programme Leader Senior Insights Manager
Deloitte Africa Deloitte Africa
Email: leivanzyl@deloitte.co.za Email: sischaefer@deloitte.co.za
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