CEO's message

Dear colleagues,

It's almost time to wrap up the first quarter and look forward to the April break. Our students are registering fast and furiously and the number of students continues to grow.

I'll be off soon to attend the 2nd CSIA international corporate governance conference in New Delhi, India on 5 - 6 April 2013. CSSA is a founding member of the Corporate Secretaries International Association (CSIA), which has 18 member countries (such as the USA and India) and 70 000 members worldwide.

Our qualification continues to hold its own amongst the myriad of qualifications on offer. The CSSA qualification provides learners with a solid grounding in accounting and law. Never before has there been such a dire need for trained governance professionals. Our qualification is one of the only qualifications available in Southern Africa focussing on corporate governance. The qualification ends off at an NQF 8 level (honours) with four board subjects i.e. corporate governance, corporate secretaryship, corporate administration and corporate financial management. If you already have an existing degree, you can go directly into the board level.

Many state departments and state-owned companies are realising that the sooner their key employees receive training and a qualification in corporate governance, the better are their chances of dealing with the magnitude of corporate governance challenges.

At the same time, I also need to acknowledge many of our members who continue to play a vital role as accountants, whether they are accounting officers, financial directors or tax practitioners.

I hope you enjoy the first issue of our new look e-zine!

Stephen Sadie
(MBA, M. Ed)
Chief Executive Officer



Recognition by SAQA

Chartered Secretaries Southern Africa has recently been recognised as a professional body by the South African Qualifications Authority (SAQA). As a result, the designations, Grad.ICSA, ACIS and FCIS, have been registered on the National Qualifications Framework. This now supports the qualification that was registered in 2002 on the National Qualifications Framework, strengthening the recognition of the qualification as the premier qualification for governance professionals in Southern Africa.


Dr Blade Nzimande, Minister of Higher Education & Training, presents the certificate to Stephen Sadie, CEO of CSSA.

As a registered professional body, CSSA engages on a regular basis with legislators and regulators representing its members on forums such as the King Committee and Fasset. As such, CSSA remains in the forefront of developments in the field of corporate governance and accounting underpinned by ethical foundations and accountability.

CSSA has been involved for more than 100 years in the training and development of governance professionals and accountants and this recognition provides evidence of our contribution to good corporate governance and accounting in Southern Africa.


CoSec knowledge sharing interface

Statucor and Chartered Secretaries Southern Africa, were proud to host the first in a series of knowledge sharing interface sessions on 14th March 2013. Held in the executive boardroom of audit and advisory firm BDO's Parktown offices, the event was extremely well received by the company secretarial community with many of the delegates requesting follow up events.


During the session, a somewhat tricky but thought provoking case study was presented and delegates were encouraged to discuss and debate a number of issues including director's remuneration and fiduciary duty. A true life case study had been discussed within the South African regulatory environment.

The panel of experts including Statucor's Larey van der Westhuizen; CSSA's Joel Wolpert; and Clive Kingsley and Matthew Jay from Bridge Capital, were on hand to provide insight and guidance to the group. Facilitator Ronelle Kleyn said “Statucor are honoured to be able to host such an event with the support of CSSA and are encouraged by the level of participation and standard of valuable input from delegates”.

“I found the session to be very relevant and useful. It exceeded my expectations” said attendee Julie Boel, Senior Associate at Afrisia Corporate Finance. Tshepiso Maphatane, Compliance Manager at NAMC, commented that in the company secretarial field, there aren't too many opportunities to engage with others in the field and events such as this one provide helpful information and a great networking opportunity.

Key Technical issues discussed:

1. Shareholder activism
It is critical for companies to undertake ongoing engagement with their shareholders [via an Investor Relations function], so that by the time the AGM comes along, the Board need to know the likely direction of shareholder voting. It must be remembered that it is permissible to adjourn specific resolutions, provided they have not yet been voted on .In this connection, close co-operation between the Company Secretary and the Investor Relations function is important.

2. Non–executive directors’ fees
This requires a biennial special resolution to approve prospective fees. In reality, because director’s fees are subject to annual revisions, shareholder approval for the proposed fees is dealt with by an annual special resolution at the AGM. It was cynically observed that the same shareholders who had voted for the re-election of directors, voted against NED fees for those same directors!

3. Non–approval of all special resolutions by disaffected shareholder
The impact of the non –approval of (1) NED fees ,(2) Financial Assistance in terms of S45 of the Act ,and (3) Adoption of new MOI ,unfortunately left the company in a untenable situation–the NEDS could not be paid , group treasury activities were stymied (dividends not being able to be declared) and the company left operating under an out of date MOI . Under these conditions it had only one course of action - to apply to Court for an order under S163: Relief from oppressive or prejudicial conduct.


Members on the move

Meet one of our Board members, and a FCIS member – Johann Neethling

Kindly provide a little background on yourself - where you studied, your career path, where you currently work?
I studied accounting at an undergraduate and honours level at the University of Pretoria and UNISA respectively. After that I completed a Master's Degree in South African and International Taxation and qualified as a Chartered Secretary in 2008. From a career perspective, I've been working on the financial services side of the real estate industry for the past 10 years with the first 6.5 years spent at Sanlam's investment arm and the last 3.5 years at Vukile Property Fund Limited (“Vukile”). I've been involved with Vukile since 2004 when Sanlam promoted and listed the Company. I'm currently the Company Secretary and also head up Corporate Services which includes, Risk Management, Compliance, Insurance and Office & Facilities Management.

Can you describe briefly what your current job entails?
The job has a wide scope ranging from the typical governance and secretariat work to more general management type issues. Given Vukile's current growth drive, a lot of my time is spent on supporting M&A activity and dealing with JSE-related issues.

What do you enjoy about your career? What are your greatest challenges from day to day?
I enjoy the variety of the job and the interaction with very experienced non-executive directors. Daily challenges are to balance the demands of core business activities with those arising from M&A activities.

Why did you choose the CSSA qualification/how has the course contributed to your career?
The CSSA qualification was a natural progression from my accounting/financial background. The course itself has benefited me tremendously on understanding some technical details - especially on the company secretariat discipline.

Would you recommend the qualification to others?
Most certainly – especially qualified attorneys and accountants.

What is your view on the role of the Chartered Secretary in the work place of today?
Their role is critical. The world is now more complex, especially in terms of regulation. Businesses need individuals to distil compliance and regulatory matters for the benefit and enablement of the business. Chartered Secretaries have the skill set to do this.

Any inspirational anecdotes for fellow members and students?
Know more than the guy next to you. You don't always have to be No.1 – just make sure you beat the curve. In my experience this comes from reading and research in your own time.

How do you enjoy spending your leisure time?
Wife, kids, friends, sport, reading – in that order.


Students in the spotlight - Be Inspired

Meet Rob Knox-Davies

Kindly provide a little background on yourself - where you studied, your career path, where you currently work?
I studied at Rhodes University, obtaining my BCom and LLB there, after which I did my articles in Durban for a medium-sized law firm performing commercial litigation. In 2011 I read for my LLM at UKZN, whilst also studying for the CSSA qualification. In 2011 I started at KPMG in Durban in the International Corporate Tax department. I currently work at KPMG in Johannesburg.

Can you describe briefly what your current job entails?
Drafting advice and opinions on tax related issues of inbound and outbound investment, thin-capitalisation, transfer pricing, permanent establishments, controlled foreign companies, foreign tax credits, double taxation agreements, exchange control and treatment of foreign exchange differences.

What do enjoy about your career? What are your greatest challenges from day to day?
I enjoy that to adequately provide a client with relevant tax advice you have to fully understand their business, so you get exposure to how different clients operate commercially. I also enjoy that as a tax consultant you need to both wear an accounting hat, as well as a lawyer hat. The greatest challenges are dealing with the complexity that the regulatory environment can throw at you.

Why did you choose the CSSA qualification/how has the course contributed to your career?
I chose to pursue the CSSA qualification because it provided access to courses and content that I wanted to pursue and learn more about. It gave me a difference or edge in terms of marketing myself, especially against other attorneys. The qualification has given me insight to areas of a company's operations that previously I did not have knowledge about. So when I consult with clients I have a greater understanding how they operate in more holistic fashion.

Would you recommend the qualification to others?
It provides great detail about how any medium to large scale corporate operates. For anybody who comes from any sort of regulatory, legal or compliance advisory background it really does cover, in a pragmatic way, the relevant issues that challenges the South African corporate environment.

What is your view on the role of the Chartered Secretary in the work place of today?
As our regulatory and legal environment becomes more cluttered and complex, it is essential that the Chartered Secretary has a part to play in providing the essential guidance on how to navigate the plethora of challenges that any corporate faces in this regard. I really do think that both directors and shareholders alike are starting to see not only the value of Chartered Secretaries but the necessity of them.

Any inspirational anecdotes for fellow members and students?
When I walked into my Corporate Financial Management exam I was convinced that it would be a lucky event if I even passed. I had worked hard in my preparation but just wasn't feeling confident about my handling of numbers since I don't come from an accounting background. I ended up obtaining first place for October 2011 exam sitting, so I think it just goes to show that if you work hard, it will pay off for you (even if you think that it maybe won't!)

How do you enjoy spending your leisure time?
Running and cycling. Fitting in some reading when I can. Supporting the Sharks and watching Arsenal labour their way into 4th spot season after season.


IDM launches CSSA programmes in Swaziland

The Institute of Development Management (IDM) launched the CSSA programmes at an occasion attended by the country's dignitaries and members.

The launch was held at the executive room of the IDM Swaziland on the 22nd of February 2013. The turnout was very good and encouraging. Amongst the dignitaries were the Principal Secretary of Economic planning and Development, Mr Bertram Stewart; senior management from Swaziland Breweries (SABMILLER); Mr Motsa, former Swaziland branch chairman and chairman of Swazi Air, a representative from Royal Swaziland Sugar Corporation (a company that won the regional category award at the CSSA/JSE annual report awards ceremony in 2012); the Swaziland Revenue Authority as well as members and students of CSSA.

Mr Vusi Tsabedze, the head of Business Studies, IDM.

Nonhlanhla Dlamini, Country Director of IDM Swaziland, welcomed everyone.

She expressed her delight and thanks to everyone who contributed in making the launch a success. She also pledged her support to the new programme as it unfolds in the coming months.

The chairman of CSSA's Swaziland centre, Mr Sandile Mbhamali, also expressed his excitement about the development and the support of key people in Swaziland. He mentioned that CSSA was excited to partner with IDM in offering the CSSA programmes in the country. He said that the accreditation of the IDM was a journey that began in Swaziland a while ago and has resulted in the accreditation of all three centres of IDM in Botswana, Lesotho and Swaziland.

Swaziland chairman, Mr Sandile Mbhamali, commented “Having the CSSA programme in the country will result in more students, who hopefully will become members in time and contribute to the country's Good Corporate Governance rating being boosted in international ratings. This could result in more FDI and higher ratings by institutions such as the IMF and the World bank”. Sandile highlighted the example of Zimbabwe, which was recently rated above Swaziland in their Good Corporate Governance rating and attributed that to the fact that Zimbabwe as a single country has a high number of governance professionals through their CSSA programmes.

The CEO of CSSA, Mr Stephen Sadie, made a comprehensive presentation, which unpacked and outlined the CSSA programme, its history and pedigree. The presentation clearly outlined the journey that an individual takes when embarking on the lifelong career of a Chartered Secretary. Mr Sadie also expressed his support to the IDM.

Mr Vusi Tsabedze, the head of Business Studies, also made a presentation that outlined the programmes that were currently being offered by IDM. He mentioned that as an Institute they were more than happy and ready to take on the CSSA programme given the resources they have.


From the Technical Adviser's desk

The Memorandum of Association (MOI): to alter or not to alter, that is the question; or, is it a case of “much ado about nothing”?

When the Companies Act 71/2008 came into effect on May 1 2011, companies were confronted by a new phenomenon; a transitional period of two years until 30 April 2013, during which their old Articles of Association could be amended to bring them into line with the new Act without charge. This was important because the new Act provided that during the transitional period, the deemed MOI (old Articles of Association), subject to certain overriding transitional provisions in Schedule 5, would prevail over any alterable provisions in the new Act; however, after May 1, 2013 the new Act supersedes the MOI.

The transitional provisions in Schedule 5 which supercede the MOI relate to:
• The duties, conduct and liability of directors
• Rights of shareholders to receive notices /have access to information
• Approval of any distribution, financial assistance, insider share issues/options
• Meetings of shareholders or directors, and adoption of resolutions [Note: this is probably the most important from a company secretarial viewpoint – it must be emphasized that the relevant sections of the act themselves contain alterable provisions!]

Many media reports have contained alarmist headlines relating to the obligation of all companies to amend their MOIs before 30 April 2013, and warning of dire consequences and severe penalties for failure to do so - the only penalty incurred is a filing fee of R250 (filing prior to 30 April 2013 was free of charge)!

On 9 May 2012 CIPC issued Practice Note 1 of 2012. This practice note made it clear that there is no obligation to amend pre-existing Articles of Association (deemed MOI) before 30 April 2013 but emphasizes that if, after the two year period, no amendment has been effected, then the Act would supercede any conflicting provision in the MOI. After 30 April 2013, the existing MOI will continue to be of force and effect but only to the extent that it is not in conflict with the Act.

The above commentary is particularly pertinent to shareholder meetings convened in terms of the new Companies Act 71/2008. Section 64(2) provides that a company's MOI may specify a higher or lower percentage than 25% quorum (effectively an “alterable “provision. Section 64(3), however emphasizes a minimum physical quorum of three shareholders (if a company has more than two shareholders)). Furthermore, Schedule 5 of the Act (transitional provisions) states that despite anything to the contrary in a company's MOI (unalterable provision), the provisions of the Act shall apply to, inter alia, meetings of shareholders (item 7(5)). This provision does not alter the “alterable provision” character of the quorum requirement in Section 64(2).

Note: Table B of the 1973 Act (which many private companies incorporated under the 1973 Act had adopted) contains an Article (Number 36) dealing with quorums at shareholder meetings, specifying two members or, in the case of a company with one member, such member.

Another provision in the old Table B, which caused much consternation was clause 95 which required “an auditor to be appointed in accordance with Chapter X of the Act”; this clause could not have application after 1 May 2011, being in conflict with the new Act and Regulations which specifically deal with the new “selective” audit regime applicable after 1 May 2011.

The new Act specifically recognises shareholders' agreements. In terms of section 15(7) of the new Act, shareholders of a company may enter into any agreement with one another concerning any matter relating to the company, but such agreement must be consistent with the new Act and the company's MOI. Any provision which is inconsistent with the new Act or the company's MOI will be void to the extent of the inconsistency.

In terms of the transitional arrangements, however, a shareholders' agreement adopted by shareholders of a pre-existing company before 1 May 2011 will have the same force and effect despite section 15(7), until 30 April 2013 or until changed, and after 1 May 2013, only to the extent that it is consistent with the new Act and the company's MOI.

Should any matters in a pre-existing shareholders' agreement be classified as alterable or non-alterable provisions within the new Act, it will not be possible to regulate these matters in a shareholders' agreement, because non–alterable provisions cannot be altered and alterable provisions can only be altered in the company's MOI.

Note: JSE-Listed companies were obliged to have harmonised their MOIs with both the new Act and the Listings Requirements by 30 April 2013.

Joel Wolpert, Technical Adviser, CSSA


Key dates
Enrolment closing date 31 March
De-registration date 12 April
Examination dates 20 May to 24 May
Results release 12 July
Graduation 2 September
Premier Corporate Governance Conference 11 & 12 September
Annual Report Awards 14 November

Issue 01
March 2013

In this issue

• CEO's message
• Recognition by SAQA
• CoSec knowledge
  sharing interface

• Members on the move
• Students in the spotlight
• IDM launches CSSA
  programmes in
  Swaziland

• From the Technical
  Adviser's desk

• Key Dates

CPD
DBN
Caryn Maitland
08h00-10h30
CPT
Pat Mahony
08h00-10h30
CPT
Tim Anderson
08h00-10h30
JHB
Dianne Seccombe
08h00-12h00
JHB
Caryn Maitland
08h00-10h30

Exams begin

Results released



Visit our website

www.icsa.co.za

This is the first edition of the Chartered Secretaries Southern Africa eZine 2013. Should you have any suggestions or specific information you would like included in future editions, please revert to Janine Kusters, membership and marketing manager, Janine@icsa.co.za