Alexander Forbes to help refine IOD's new corporate governance evaluation tool

Alexander Forbes announced that it will implement and help further develop and refine the Institute of Directors’ (IOD) new corporate governance evaluation tool that was released today alongside the 3rd King Report.

The King Report was the first governance code in the world to promote the concept of responsible corporate citizenship and sustainability reporting.

Vishnu Naicker, head of risk at Alexander Forbes, said that as a leading player in the financial services industry, the IOD approached Alexander Forbes to help fund, test and refine the tool that has been in development for the past 18 months.

“It will help add greater transparency to the way companies are run and ensure shareholder rights, board independence and investor responsibilities are given the focus they deserve.

“We, along with others who have partnered with the IOD, will be using the tool from today until the end of the year to help with testing and also suggesting any improvements to enhance it for use in corporate South Africa.

“This tool will assist us in our monitoring and oversight of corporate governance on a real-time basis and allow for immediate correction of identified deficiencies.”

The online tool (www.iodsa.co.za) will be available for listed companies from 2 September 2009, but subject to the understanding that testing is being done on it and the criteria may be changed until the end of the year.

The final version will be ready for use at the beginning of January 2010.

Modules for other sectors of business, namely: public sector, NPOs, SMEs, pension funds and medical aids are still being developed and are also expected to be released in 2010.

The tools provide a guide to assist the corporate world in evaluating their status on corporate governance and identify the areas of weakness for improvement or correction.

Naicker noted Alexander Forbes believes that its alignment and sponsorship of the IOD initiative will begin to uplift corporate governance amongst all business sectors in South Africa, which boosts investor confidence and ultimately increasing economic growth.

“Importantly, it further enforces our commitment in moving to the next tier of full embodiment of corporate governance within Alexander Forbes.”

Naicker said that the tool would also help affirm public confidence and that it was being launched at the right time.

“Globally widespread corporate governance scandals arising from the global financial crises have devastated investor confidence.

“Most countries worldwide are either considering or have developed legislation or codes on improving sound corporate governance.”