I rather enjoy reading those huge “tombstone” pre-listing announcements, though I will admit to usually skipping over the bits with the numbers. They have certainly been thoroughly burnished and scrubbed to such a shine that there’s nothing else to see. Instead, it’s the list of directors that claims my attention. Firstly I look to see how many are younger than me – alas these days the answer is most of them. Then I marvel at how many seem to live in bleak office parks, often several of them in the same block. I presume that the requirement to provide one’s residential address on these documents (a la FICA) still stands? And finally, I peruse the qualifications column to check what foolishness the much praised corporate governance standards have produced. Worldwide, legislators and bureaucrats, most of whom I am sure have never actually run a business, are dictating that a company should have squads of non-executive directors who should be independent. This dubious tenet of independence (remember who appointed them in the first place) seems to suggest that no knowledge of, or background in the company or industry is a good thing. Here in SA we of course have our own extra chapter in the standards guide. Directors must further be categorised by reflectivity, sensitivity, mobility and history with scarcely a word about capability or suitability. Recently a 27-year old man with a marketing certificate joined a 35-year old holding a health diploma on the board of a mining company. I wonder how much help they will be to the chairman, who is to be congratulated on putting his MA in Political Science (oxymoron?) to such good effect.
Now this particular non-yuletide themed rant was brought about by the extraordinary quarter-page full-colour invitation from Parliament that asked all citizens to answer the following question: “Corporate governance in South Africa. Where do we stand?” I shudder to think what answers they will receive and how that extra chapter in the standards manual might be expanded in the future. Surely the only thing any of us, including the state, can expect of anyone else – including a corporate – is that they don’t steal anyone else’s assets. That would include the health of its staff and customers. And if they do, then they get punished. If the board is incompetent it will soon show up in the company’s products and it’s share price.
But enough humbug. The JSE all share index has soared right through 18 000 and next week we shall see how it intends to end the year. Most of the heavyweights, with the exception of Sasol and SAB have moved up sharply. Odd that. All that fuel both we and our cars need at this time of year. Despite the passing of close-out, when a record R11.5bn turnover was recorded for the day, and the current summer holiday fever, volumes have still been very chunky this week, never falling below R4bn a day. This week’s feature has been the strength of the rand, which once again dispels that old myth about an inverse correlation between the currency and the market. Interestingly the US dollar has also been very strong, presumably a response to their rate increase.
Please have a wonderful, peaceful, rewarding and merry Christmas. The market reopens on Tuesday 27th, which makes me suspect that we have been gypped out of a holiday somewhere. Best wishes.
James Greener
23rd December 2005
