The Institute of Directors in South Africa (IoDSA), while commending the Minister of Tourism, Patricia de Lille for taking the governance of board meetings seriously, has noted several nuances around this move.
Earlier this month, De Lille suspended the Chairperson, Makhosazana Khanyile, and Deputy Chairperson, Lizelle Haskins from the leadership of the South African Tourism board following concerns about an “excessive number of meetings” held by the board in the 2024/25 financial year, which has already chewed up 63% of the R1.44 million (€72 800) budget allocated for board fees.
De Lille said at the time that a total of 54 meetings had been held up to the first week of September, accruing R900 000 (€45 500) in board fees.
Khanyile and Haskins, who have since resigned from the board, have announced their intention to sue De Lille for defamation.
The two said in a joint statement that the meetings included board induction sessions, ordinary board meetings, meetings with the Minister, portfolio committee meetings, special board meetings and ordinary committee meetings for the four committees: marketing, audit and risk, human capital, and remuneration and awards.
"As a new board, knowing that SA Tourism is plagued by several operational and significant governance challenges, the meetings were held to enable the board, as the accounting authority, to resolve legacy challenges and put in place effective policies and procedures to ensure strong governance going forward," Khanyile and Haskins said.
IoDSA’s viewpoints
“We have seen excessive board meetings in the public sector in the past, often without it being addressed,” noted Professor Parmi Natesan, IoDSA CEO. She clarified that overspending was a risk when non-executive director fees were based on a per-meeting calculation, but it could 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,” she explained.
According to Natesan, the board chair was crucial to determine whether such additional meetings were indeed necessary. She added that while South Africa’s Tourism Act required the SA Tourism board to meet a minimum of four times a year, it didn’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, according to her.
“However, 54 meetings in six months – an average of about two meetings a week for a seven-month period – sounds too excessive to justify,” she said.
Natesan added: “The question is whether these two 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.
According to Natesan, this may indicate “a lack of experience and understanding of the role of non-executive directorship”.
De Lille’s authority
As representative of the sole shareholder, Natesan said De Lille had the authority and duty to appoint and remove a board that would act in the best interests of the organisation and ultimately benefit the South African public.
She dissolved the previous board in April 2023 after SA Tourism had proposed to spend R910 million (€46.8m) to sponsor UK football club Tottenham Hotspur.
More recently, she 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.
“The King IV (Report on Corporate Governance South Africa) 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,” cautioned Natesan.
“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.”
Therefore, her 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,” said Natesan.
