Directors say the operating environment for companies is improving


COMPANY directors believe the day-to-day operating environment is starting to improve, despite overwhelmingly negative feelings about the broader economic conditions, and expect better prospects next year.

That’s according to the Institute of Directors in South Africa’s (IoDSA) 2021 Sentiment Index – the sixth iteration of the study. The survey, which collects the opinions of nearly 500 directors, mainly in an executive capacity, seeks to assess how South African directors perceive the current operating climate.

The investigation was conducted earlier this year when South Africa was on an adjusted Level 3 national lockdown due to the increase in Covid-19 cases.

Leader of IoDSA: Governance and Business Services, Vikeshni Vandayar, who oversaw the report, said in a statement that while serious macroeconomic concerns naturally remained around the board table, the benefit was the perception that General business conditions had improved from 2020, which she said was due to the positive adaptation to the so-called new normal remote and virtual working conditions.

However, many in South Africa mostly feel negative about the economic conditions South Africa will face in the coming months and are also increasingly concerned about a shortage of skilled labor as well as sometimes costly union demands.

This year’s survey included key questions about the technology and its adoption given the shift to a virtual workplace driven by Covid-19.

Only 46% of those surveyed believed that boards devoted enough time to discussing the technology and its future role. Only half of those surveyed believe administrators have a deep understanding of cybersecurity risks.

Vandayar said while administrators learned to cope with the flow caused by the pandemic, most respondents still believed the uncertainty in the South African economy had the most impact on their business.

Corruption and inadequate government service delivery remained among the main challenges affecting companies in the index. Energy security was not as much of a concern as it was years ago, but it still ranked high, alongside inadequate government service delivery.

The most negative feelings remained the level of bureaucracy, low consumer confidence, an overregulated environment, high tax levels and a lack of infrastructure development.

The index showed that South African administrators feel positive about the current governance conditions in South Africa, but that positive sentiment has waned since the survey began in 2016.

“Directors felt most positive that boards properly set the tone for ethical conduct through their ethical leadership and most negative about improving the implementation of good corporate governance practices. business over the next 12 months, ”Vandayar said.

The main governance challenges were the lack of sustainable thinking and the lack of understanding of the overall benefits of good governance.

When it came to the job itself, the directors were convinced that continuing professional development had a positive impact on performance on board, but they were concerned about the willingness of some directors to take risks that could hamper innovation. and growth.

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