Theo Botha, analyst at Stanlib said more disclosure was essential for accountability by heads of corporations to their stakeholders.
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“I would like to see better disclosure in annual financial statements,” urged Botha.
Disclosure is important to stakeholders’ engagement as it promotes a more open, honest and direct engagement with shareholders which is an important criteria.
“They are not revealing the methodology as they do not want to be held accountable by anybody,” said Botha.
Gerald Seegers, PwC’s head of human resources services for Southern Africa however warned that better disclosure does not necessarily lead to better behaviour.
According to a survey conducted by the PwC, when asked about reward, 69 per cent of chief executive officers agreed that they felt they needed to match the pay and conditions offered by their peers in order to retain talent.
“The risk of benchmarking is that it brings with it the effect of raising salaries and bonuses of executives,” noted Seegers.
However, Seegers said the country was going through a transformational period at the moment but added that the question might be if the transformation is taking place at the right pace.
Seegers said financial capital was becoming the gatekeeper meaning that profitability would determine the level of one’s bonus.
Thembinkosi Dlamini, Oxfam’s governance manager said the problem affecting the sector was that corporate boards were infested by peers.
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Dlamini said even representatives from unions were not enough a panacea to the corporate excessive pays.
“If you think of union representatives, they are not at the high level of understanding financial figures and decisions so they listen to the smarter people and nodding yes to everything suggested,” he said.
“Some of the union trustees that have gone to sit on the boards have also benefited from these lucrative benefits as well making it difficult for them to challenge some of the things.”