JSE imposes R500, 000 fine on Thabi Leoka over fake PHD claims

The Johannesburg Stock Exchange (JSE) recently imposed a hefty fine of R500,000 on Thabi Leoka due to falsified claims regarding her qualifications. This incident has sparked a crucial conversation about the importance of compliance and due diligence when appointing board members. Parmi Natesan, the CEO of the Institute of Directors in Southern Africa, shed light on the essential factors that governing bodies should consider before bringing new members on board. Natesan emphasized the significance of conducting thorough background checks, verifying qualifications, and assessing a candidate's track record before appointing them as non-executive directors. While companies often invest time and resources in vetting employees, similar attention is sometimes lacking when it comes to board members, who play a pivotal role in the governance of organizations. One key issue highlighted by Natesan is the need for board members to possess industry-specific experience and knowledge. Being able to comprehend the intricacies of the sector in which they serve is crucial for overseeing operations effectively and asking pertinent questions. The case of Thabi Leoka sitting on multiple diverse boards like MTN, NetCare, and Anglo-American raised questions about industry expertise and the extent of skills and experience required for such roles. Moreover, Natesan addressed the responsibility of the nominations committee within boards to oversee the due diligence process when considering new appointments. She pointed out that organizations listed on the JSE are obligated to adhere to governance guidelines like King 4. Failure to comply should result in transparent explanations in governance reports about the lapses and corrective measures implemented. The interview also touched on the accountability of both individuals and organizations in cases of non-compliance. While Thabi Leoka faced repercussions for her actions, questions arise about the scrutiny and enforcement of regulations on listed entities by the JSE. Natesan highlighted the need for transparency in governance practices, urging companies to disclose how they apply governance principles like King 4 and make their reporting more consistent and comparable. Furthermore, the conversation delved into the issue of board tenure and the availability of talent for board positions. Natesan refuted the notion of a scarcity of talent, citing the Institute of Directors' extensive membership base and qualified professionals. The challenge lies in how board appointments are traditionally filled, creating a cycle where the same individuals recommend each other for board roles. While some organizations are making strides towards diversifying their boards and engaging search firms to find suitable candidates, Natesan acknowledged that progress is gradual and uneven across the industry. Moving forward, she hopes to see tangible changes in board appointments, with a focus on independence and diversity. In conclusion, the conversation with Parmi Natesan underscores the critical importance of transparency, compliance, and thorough due diligence in board appointments. As organizations navigate the complexities of governance and regulatory requirements, fostering a culture of accountability and ethical leadership remains paramount for sustainable business practices.