Influences on the performance effectiveness of non-executive directors in South Africa

In light of the rising interest in corporate governance, this paper examines an array of factors influencing the performance of non-executive directors. In a questionnaire-aided survey of 60 current non-executive directors of Johannesburg Securities Exchange (JSE)-listed companies representing the major sectors of the South African economy, it is concluded from frequency counts that the most important influences are: procedural factors - the distribution of discussion materials prior to board meetings (86%), agenda setting (76%) and orientation programmes (59%); corporate governance factors - separation of the roles of the chair and the CEO (73%), the hiring process (65%); personal attributes - situational experience (62%), length of service (45%); and independence factors - executive sessions with and without the CEO (55%), compensation in the form of equity (52%). Thus, procedural and corporate governance factors rather than personal attributes or independence factors have the greatest impact. This empirical finding attests to and provides justification for the recent review of the JSE listing requirements in accordance with the recommendations of the King Code of Corporate Governance.