Why so many board meetings, SA Tourism?

An average of around two per week – personal-enrichment motivation, or is there a deeper reason?

September is Tourism Month in South Africa but instead of that being the focus, South African Tourism made negative headlines for having an excessive number of board meetings and overspending on board fees.

Minister of Tourism Patricia de Lille dismissed the chair and deputy chair from their leadership roles on the board, seemingly holding them accountable for the 54 meetings held in the six months from March to early September 2024, having already spent R900 000 of their R1.44 million annual budget for board fees.

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The minister is to be commended for taking this governance concern seriously

We have seen excessive board meetings in the public sector in the past, often without the matter being addressed.

Overspending is a risk when non-executive director fees are based on a per-meeting calculation.

But it can be contained – many companies rather pay an annual retainer fee for a reasonable number of meetings, and then a smaller per-meeting fee for additional special meetings as needed for good reason.

The chair is crucial in determining whether such additional meetings are indeed necessary. While South Africa’s Tourism Act requires the SA Tourism board to meet a minimum of four times a year, it doesn’t specify a maximum number. The meeting frequency may change from year to year and increase over a short time period, particularly if there is a crisis or reputational matter to solve.

However, 54 meetings in six months – an average of about two meetings a week for a seven-month period – sounds too excessive to justify.

Reasons?

The question is whether these twice-weekly meetings were necessary to discharge the board’s oversight duty or if they were coming up with reasons to have extra meetings to collect fees.

That would be unethical and not acting in the best interests of the company, enriching themselves at the expense of the company.

Yet the fact that SA Tourism’s CFO resigned recently, reportedly due to the interference of the chair and deputy, points to a third possible reason for an increased frequency of meetings: the board being too operational and instead of focusing on oversight, encroaching on management of the organisation.

This may indicate a lack of experience and understanding of the role of non-executive directorship.

Governance

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As the representative of the sole shareholder, De Lille has the authority and duty to appoint a board that will act in the best interests of the organisation and ultimately benefit the South African public – and to remove a board that doesn’t.

She dissolved the previous board in April 2023, after SA Tourism proposed spending R910 million to sponsor UK football club Tottenham Hotspur.

Read:
SA Tourism board implosion highlights need for due diligence before appointment
Ramaphosa pans Tottenham Hotspur sponsorship deal
Three key SA Tourism board members resign en-masse over Hotspur deal

Most recently, the minister launched a full-scale investigation into the excessive board meetings and appointed a new chair but has allowed the previous chair and deputy to remain ordinary board members.

King IV is not explicit on the previous chair staying on the board, but in my opinion, this is not good governance and may impact board dynamics.

My concern is whether the problem of excessive meetings will be solved simply with a new chair if all the same board members stay on despite all being party to these excessive meetings.

The key recommendation is due diligence in appointing the right people to the board versus political appointments. When all board members are ethical and competent, understand their duty and don’t take advantage, matters like these may be avoided in future.

Professor Parmi Natesan is CEO of IoDSA.

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