SA Tourism’s 54 board meetings in 6 months calls for more accountability

While September is Tourism Month in South Africa, SA Tourism instead caused negative headlines for excessive board meetings and overspending on board fees.

SA Tourism held 54 board meetings in six months, prompting the minister of tourism to dismiss the chair and deputy chair of the SA Tourism board.

Professor Parmi Natesan, CEO of the Institute of Directors in South Africa, says she commends Minister Patricia de Lille for taking this governance concern seriously.

De Lille dismissed the chair and deputy chair from their leadership roles on the board, seemingly holding them accountable for the 54 meetings from March to early September, already spending R900 000 of the board’s R1.44 million annual budget for board fees.

“We have seen excessive board meetings in the public sector in the past and often nothing is done about it. 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,” she says.

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Chairperson must determine how many meetings are necessary

Natesan points out that the chairperson 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 does not 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.”

She says 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.”

However, Natesan says, the recent resignation of SA Tourism’s chief financial officer, reportedly due to the interference of the chair and deputy chair, points to a third possible reason for an increased frequency of meetings: the board was too operational and instead of focussing on oversight, encroached on the management of the organisation.

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

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Minister has authority to appoint and remove board of SA Tourism

She points out that as representative of the sole shareholder, De Lille has the authority and duty to appoint and remove a board that will 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 proposed to spend R910 million to sponsor UK football club Tottenham Hotspur. 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 about 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.”

Therefore, she says, 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 do not take advantage, matters like these may be avoided in future.”