Abstract:
This study analyses the perceived effectiveness of directors who sit on multiple boards
in South Africa. Recent guidelines and reforms to South AfricaÕs corporate governance
architecture are outlined in detail at the outset of this study. They provide the context for
the subsequent overview of the competing scholarly perspectives on the benefits (e.g.
experience) and disadvantages (e.g. reduced capacity) of including so-called Ôbusy
directorsÕ on boards, especially as they relate to the distinct political, social and business
environment of South Africa. Through a qualitative approach based on a series of
detailed, semi-structured interviews with representatives of three key groupings Ð busy
directors, company secretaries and board governance experts Ð this study then probes
a number of key factors that may diminish or enhance director effectiveness and impact
board recruitment decisions. Particular attention is paid to issues of capacity, experience,
networks and board culture. Complemented by a comprehensive review of relevant
literature, the study reveals a complex picture of the busy director phenomenon in South
Africa. The findings give heavy prominence to the value of ÔexperienceÕ in board director
selection, so much so that firms often overlook the negative impact on capacity of
directors stretched across multiple boards. Although limitations on busy directors have
been imposed in other regions such as Europe and North America, this study finds that
the particularities of the South African context may make similar restrictions unwarranted
Ð at least for the time being Ð owing to the relative scarcity of certain skillsets and
experiences within the current pool of potential board directors. A ÔDirector and Board
Effectiveness ModelÕ, devised by the researcher based on the research findings, is
presented in the final section of this study to help sensitise directors, boards and firms
on the need to better understand the complex dynamics around busy directors.
