By Carl Bates, Founder and CEO of Sirdar Group, and a YPO member

When an investor opens the paper these days they expect to read insights into the latest financial scandal or corporate disaster. Indeed this year started with a bang with the demise of Steinhoff, although it have not been the only company hit by governance failures and the resulting pressure on its share price.

Yet what about the thousands of business owners who walk through the door of their own offices every day? How are they performing? What impact does poor governance have on them? While not as news-worthy as failures such as Steinhoff, the evidence shows that these businesses are impacted by the same poor governance and lack of understanding of the true value of a board as big corporates can be. However the impact is less relevant to us as a society and therefore not reported in the same way. Many of these shareholders believe that because it is their own business the concept of a board is not even relevant to them. Well what if the truth was somewhat different? What if boards drove performance for these companies as well?

For those enlightened privately-held companies and family businesses who embark on the journey of implementing a high-performance board, it is not necessarily plain sailing. Due to the low engagement by such businesses in the concept of a formal board, good guidance can be challenging to find.

One such question they immediately ask is “What should we pay our non-executive directors?” Type that question into Google and you will find the answer for directors that sit on JSE-listed companies’ boards. What about all the other South African and African-based family businesses or privately-held companies?

Those sitting on the boards of these private and family entities can experience very diverse remuneration as non-executive directors, even though, as the Korn Ferry Institute puts it: “Today’s NEDs [non-executives directors] must be more engaged, more numerate and more technically competent than ever before”.  For these numerous non-executive directors and the companies whose boards they serve, there are few guidelines that reference directors’ rightful compensation.

Having served on boards such as these for many years and being passionate about empowering business owners to break through the barriers that confine them to little reward, I have identified a huge knowledge gap regarding non-listed African board practices, particularly relating to privately-held company and family business board fees, through a proprietary research project.

In all these private and family entities I have been engaged with across the continent, I have observed three subjects where the knowledge gap is particularly obvious, namely:

• The structure and quantum of fees earned by the non-executive and independent directors of these businesses.
• The perceived performance of these boards and the obstacles they face according to those who sit on them
• Board diversity with respect to gender, ethnicity, age, and the impact, if any, of board diversity on the perceived performance of these boards.

With my company, Sirdar Group, I decided to launch unprecedented research: Africa’s first non-executive and independent directors’ fees, performance and diversity survey for privately-held companies and family businesses. This is because every business owner wants and deserves to know what he or she should ask when trying to attract the best directors for their company. They also deserve to understand the best practices in implementing a board with the right makeup. It is far from being a simple undertaking, even for big corporations that are used to it.

Through this research we want to support the achievement of meaningful economic impact by companies across the continent. This is achieved through supporting their ability to have truly high-performance boards. To make this happen, we will send a complimentary copy of the report to every director who completes the survey and will share with them the precious insights we will learn. I truly believe in the great potential that lies in African companies to drive economic prosperity over the long term and that the establishment of well-structured and representative boards can boost business success and will ultimately make a meaningful impact on the quality of life of citizens through job creation, and the provision of quality goods and services.