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From the Chief Executive Officer’s Desk – September 2015

By Kaizer M. Nyatsumba | Chief Executive Officer

The health and effectiveness of organisations depends, to a great extent, on the degree to which their members participate or take interest in their affairs. Generally, active or interested members make for healthy and more effective organisations.

No doubt, the same logic applies in the case SEIFSA and its affiliated Associations, and in the case of the Associations and their member companies. This is particularly so when it comes to matters that require inputs, directions and mandates from members. It is critically important that such mandates are developed by the members, through a series of debates and discussions with and among one another, and then communicated to the entity that has the responsibility to carry out or discharge that mandate.

In our environment, the one example with which everybody will be familiar is the wage negotiations with the unions. Before their onset and during the whole process, Associations affiliated to SEIFSA discuss their positions among themselves and come to the meeting of the SEIFSA Council – which includes all member Associations – with mandates from their members, which they then articulate and debate with the other Associations. In the end, a common position emerges from the Council, which becomes the mandate given to SEIFSA.

Regrettably, even that process has not worked as well as it should have done. Weeks and months after the conclusion of the 2014 wage negotiations, which left a lot of unhappiness in their wake, colleagues and I had a series of companies that alleged that they were not involved in the internal formulation of mandates within their Associations. In essence, they claimed that they were kept in the dark by their respective Associations and were not informed about developments before and during the negotiations. In fact, many such companies did not even know the Associations of which they were members; all they knew was that they were “members of SEIFSA”.

There is a lesson here for all of us: collectively, together with the Associations, we have to do everything possible to ensure that member companies are active within their respective Associations so that they can make themselves heard. Similarly, all Associations need to be just as active within the SEIFSA Council so that they, too, make themselves heard in the formulation of mandates for the Federation.

Whenever I have shared these companies’ sentiments with the elected leadership of member Associations, invariably those in leadership positions have argued that there has been a high level of apathy on the part of member companies. They have said that while they have scheduled regular Association meetings and made every effort to invite their members to those meetings, generally only a few companies have bothered to attend those meetings, with the usual companies represented. Understandably, they have argued that it is difficult – if not impossible – to brief people who are absent from meetings and obtain a mandate from them. This, they have said, has been the reason why some companies have been angry with SEIFSA, labouring as they do under the false impression that the negotiated wage settlement was approved by the Federation when, in fact, it was approved by the Associations themselves. On its own, SEIFSA has absolutely no authority to devise a negotiating mandate with the unions and to conclude a deal with them. Both positions are understandable: just as companies need to be active within and make themselves heard in their Associations, they also have to invest time to attend their Associations’ information sessions and annual general meetings. Once the majority of them have taken a decision in their meeting, that decision is binding on all members of that Association. Similarly, once the majority of Associations have taken a decision at a SEIFSA Council Meeting, that decision is equally binding on all members of SEIFSA.

With different Associations currently holding their respective annual general meetings, and with the SEIFSA AGM coming up in October, it is important to conclude with a few remarks on corporate governance.

While companies should be active within their Associations and the latter should be active within the SEIFSA Council, once individuals from companies are elected onto the Executive Committees of Associations, it is imperative for them to understand that they are then required to serve the interests of their Associations. As members of their Associations’ Executive Committees, they are required to advance the overall interests of their Associations, and not those of their respective companies. Otherwise, they would have a serious conflict of interest.

Similarly, once individuals have been elected onto the SEIFSA Board, corporate governance, in terms of the 2008 Companies Act, enjoins them to advance the interests of SEIFSA, and not those of their respective Associations or their own companies. Elected individuals who fail to distinguish between their individual company roles and those of the Association on whose leadership they serve are guilty of a serious conflict of interest, as are elected individuals who fail to distinguish between their individual Associations’ interests and those of SEIFSA, once they are elected to serve on its Board.

I would like to take this opportunity to wish all Associations well as they hold their respective annual general meetings. I hope that they will emerge with leaders who understand their roles, in terms of corporate governance, and not those who may be tempted to use their positions on Associations’ Executive Committees for their personal interests.

Finally, I would like to thank members of the SEIFSA Board for the service that they have rendered and continue to render selflessly to the Federation and for their full appreciation of corporate governance. The importance of the 2008 Companies Act for Boards, including our own, can never be over-emphasised.

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