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HR Governance

SABPP
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LAUNCH OF HR GOVERNANCE FRAMEWORK FOR SOUTH AFRICA - HR GOVERNANCE COMMITTEE STAKEHOLDER REFLECTIONS by ELIZABETH DHLAMINI-KUMALO at the #SABPP2018AGM

HR Governance

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LAUNCH OF HR GOVERNANCE
FRAMEWORK FOR SOUTH
AFRICA
HR GOVERNANCE COMMITTEE
STAKEHOLDER REFLECTIONS
ELIZABETH DHLAMINI-KUMALO
21 June 2018
#SABPP2018AGM
2018 ANNUAL GENERAL MEETING
We made this promise to you at the end of 2016
when King IV was still a draft
• King IV provides many opportunities for HR to step up in
playing the HR Governance role. We need to apply our
corporate governance role as HR Directors. We also need
to develop an HR Governance Framework to strengthen
the HR value chain and all HR practices in support of good
corporate governance in the organisation. The SABPP HR
Governance Steering Group will lead these efforts.
HR Governance Committee
Elizabeth Michael Sivaan Getty
Dhlamini-Kumalo Glensor Marie Simelane
CHAIRPERSON VICE-CHAIRPERSON
Merriman
Ponoane
HR Governance
Evolution to HR governance
HR
Leader
(business partner)
HR
Governor
HR
Manager
HR
Regulator
P
e
r
f
o
r
m
a
n
c
e
High
Low
C o m p l i a n c e HighLow
Progress to date
• We have drafted and received input on a
Position Paper
• We were guided by Merriman Ponoane’s
thesis in developing the Position Paper
• Developed a working definition of HR
Governance

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HR Governance

  • 1. LAUNCH OF HR GOVERNANCE FRAMEWORK FOR SOUTH AFRICA HR GOVERNANCE COMMITTEE STAKEHOLDER REFLECTIONS ELIZABETH DHLAMINI-KUMALO 21 June 2018 #SABPP2018AGM 2018 ANNUAL GENERAL MEETING
  • 2. We made this promise to you at the end of 2016 when King IV was still a draft • King IV provides many opportunities for HR to step up in playing the HR Governance role. We need to apply our corporate governance role as HR Directors. We also need to develop an HR Governance Framework to strengthen the HR value chain and all HR practices in support of good corporate governance in the organisation. The SABPP HR Governance Steering Group will lead these efforts.
  • 3. HR Governance Committee Elizabeth Michael Sivaan Getty Dhlamini-Kumalo Glensor Marie Simelane CHAIRPERSON VICE-CHAIRPERSON Merriman Ponoane
  • 5. Evolution to HR governance HR Leader (business partner) HR Governor HR Manager HR Regulator P e r f o r m a n c e High Low C o m p l i a n c e HighLow
  • 6. Progress to date • We have drafted and received input on a Position Paper • We were guided by Merriman Ponoane’s thesis in developing the Position Paper • Developed a working definition of HR Governance
  • 8. Progress to date We have been to 3 of our branches • East London • Port Elizabeth • Mthatha To share the work we have done and to get their input
  • 9. “Good human resource management is imperative for good governance” Mervin King
  • 10. Definition of Corporate Governance Corporate Governance is about the exercise of ethical and effective leadership by the governing body. King IV™ (IODSA, 2016)
  • 11. King IV Code of Corporate Governance CHAPTER AND CONTENT GOVERNANCE OUTCOME Chapter 1: LEADERSHIP, ETHICS AND CORPORATE CITIZENSHIP Ethical leadership; Organisational values, ethics and cultures, Responsible corporate citizenship ETHICAL CULTURE (1-3) Chapter 2: PERFORMANCE AND REPORTING Strategy, implementation, performance, Report and disclosure PERFORMANCE AND VALUE CREATION (4 -5) Chapter 3: GOVERNANCE BODY STRUCTURES AND DELEGATION Role of the governing body, composition of the governing body, committees of the governing body, delegation to management and performance evaluations ADEQUATE AND EFFECTIVE CONTROL (6-10) Chapter 4: GOVERNANCE FUNCTIONAL AREARS Risk and opportunity governance, technology and information governance, compliance governance, remuneration governance and assurance ADEQUATE AND EFFECTIVE CONTROL (11- 15) Chapter 5: STAKEHOLDER RELATIONSHIPS Stakeholders (Responsibilities of shareholders) TRUST, GOOD REPUTATION AND LEGITIMACY (16-17)
  • 12. KING IV ™ CODE ELEMENTS Practices Principles Governance Outcomes Download full document: www.iodsa.co.za
  • 13. STRENGTHS OF KING IV ™ • Ethical culture • Integrated thinking • Sustainable development • Triple context – integrated/combined • Social transformation • Strategy, risk, opportunity, performance, sustainable development – inseparable • Digital communication platforms • Information + technology
  • 14. STRENGTHS OF KING IV ™ • Role of leadership upfront • Leadership responsibility: Strategy, Policy, Oversight, Disclosure • Sector supplements (SMEs and NPOs etc) • Role of board in broader society • Governance as key enabler for growth
  • 15. STRENGTHS OF KING IV ™ • Strong focus on role of CG in value- creation and strategic goals • Ethics + ethical leadership • More systematic governance value-chain (Strategy, Policy, Oversight, Disclosure) • Ethical leadership + corporate citizenship • Underpinning values: Fairness, Responsibility, Accountability, Transparency
  • 16. STRENGTHS OF KING IV ™ • Compliance • Accountability in remuneration • Strong assurance – combined assurance • Shareholder activism • Dispute resolution • Practices, principles, governance outcomes • Mindful application • Application – voluntary + legal
  • 17. Companies Act, 2011 If Corporate Governance is about ethical and effective leadership, what is HR Governance then? HR Governance is about ethical and effective HR leadership. Fulfilling our roles as board/exco members or prescribed officers (Companies Act). Ensuring that HR adds value and providing assurance of HR work. Leading to a working definition….
  • 18. Companies Act, 2011 Describes the legal duties of a director: (inclusive view and prescribed officers: Directors: Two key duties(internationally accepted): Duty of care, skill and diligence Fiduciary duty It is expected that directors act with utmost good faith towards the company, must act with necessary skill and care in performing their duties. FIDUCIARY DUTIES - act in good faith - in the best interest of the company – avoid conflicts of interest - do not use position for personal gain - exercise powers for the purpose for which they were granted
  • 19. Governance “There is a commonly held belief that governance is a tick-box system to ensure compliance to legislation, regulations and financial reporting standards. Governance is so much more than that. It is a business philosophy that values the establishment of a business foundation based on sound decision-making capability, visionary strategic thinking, sustainability and mobilising the organisation to effectively and efficiently support the vision.” (Traversing the Avalanche by Carl Bates)
  • 20. HR Governance If Corporate Governance is about ethical and effective leadership, what is HR Governance then? HR Governance is about ethical and effective HR leadership. Fulfilling our roles as board/exco members or prescribed officers (Companies Act). Ensuring that HR adds value and providing assurance of HR work. Leading to a working definition….
  • 21. HR Governance A working definition: HR Governance: the act of leading, controlling and guiding people management in an ethical, legitimate, fair and credible manner. This will done in a sustainable manner, which ensures: • Human dignity • Alignment of the strategic people priorities of the organisation with business strategy • Establishment and maintenance of sustainable relationships with the people employed by the organisation, and people related stakeholders • Enablement of consistent people related decision-making across the organisation • Optimisation of the people performance of the organisation relative to its objectives, now and in the future • Mitigation of the organisation’s people risk • Positioning HR as a key role-player in driving ethics in the organisation • Reporting on the contribution of human capital to the sustainability of the organisation
  • 23. HR Governance Is about the human face of Governance Is about the respect of the individual, the human being, their contribution in the organisation The self respecting adult who is at work commanding and deserving respect
  • 25. BUSINESS STRATEGY – HR BUSINESS ALIGNMENT Strategic HRM 49 Talent Management 37 HR Risk Management 54 FUNCTIONAL & CROSS FUNCTIONAL HR VALUE CHAIN HR VALUE & DELIVERY PLATFORM Work- force Planning 48 Learning 53 Perfor- mance 52 Reward 56 Well- ness 59 ERM 61 OD 45 HR Service Delivery 49 HR Technology (HRIS) 49 Prepare Imple- ment Review ImproveMEASURING HR SUCCESS 41 HR Audit: Standards & Metrics HRCOMPETENCIES AUDITED RATINGS – OVERALL AVERAGE (39 companies audited)
  • 26. Scope of HR Governance
  • 27. HR GOVERNANCE FRAMEWORK FOR SOUTH AFRICA CORPORATE GOVERNANCE LINK Externalstakeholder engagement HR CombinedAssurance Corporate Governance Structures (Remco, Nomco, Socco) Strategic HRM HR Risk Management Other HR Governance structures (Exco, EECo, Skillsco) HR Policies and Standards HR Value Chain Delivery HR Compliance HR Operating Model: Roles HUMAN CAPITAL SCORECARD Internalstakeholder engagementin HR-BUSINESS ALIGNMENT: BOARD HUMAN CAPITAL STRATEGY HR Leadership HRReporting Talent Management SABPP (2018), Prof. T Veldsman and Prof. A Grobler Organisationalvaluechain
  • 28. Guidelines for HR Governance • Develop clear approach to HR Governance • Strengthen HR Risk Management • Analyse the role and contribution of all your governance structures/committees • Assess the contribution of HR policies to sound HR governance • Position HR as a key stakeholder driving ethics in the organisation • Conduct HR Audits as part of combined assurance
  • 29. Key questions - HR Governance • Do you have a framework for governing and managing HR from an HR GRC perspective in your organisation? • Does your top HR leader represent the HR function at Board or Exco level? • How sound is HR governed at your organisation? • Is your Board informed about HR governance issues? • Do you have appropriate governance mechanisms or structures for HR decision-making? • Do you apply the King IV Code on governance in the way you do HR work? • Do you comply with all HR and labour legislation in South Africa? • Are your HR professionals registered as professionals - NQF Act? • Does your organisation meet the requirements of the National HR Management System standard? • Have you HR function been audited internally and/or externally? • Have you identified all the HR risks in your organisation? • Have you developed risk mitigation strategies to address your HR risks? • Do you have adequate controls in place to ensure that all HR is properly governed?
  • 30. HR Governance – the way forward • Provide feedback by 30 June 2018 to the HR Governance committee via email: executiveoffice@sabpp.co.za • HR Governance workshop : 24 July 2018 – Facilitation of HR Governance Position paper – Finalization of the HR Governance framework • See you there!
  • 33. Conclusion Let us make a contribution to good corporate governance with good HR governance work. It is time to clean up HR functions, and to create the ripples of change, which start at the core of human dignity…..