Just how well governed is your organisation? The answer to that question may be more complex than initially meets the eye, and with the King III Report broadening the scope of regulation in South Africa to businesses of all sizes, answering it is important for many more directors.

Assessing governance posture can be an expensive and complex exercise, which is why the Institute of Directors in Southern Africa (IoDSA) has launched a tool to help gain a quantitative indication of the state of their governance.
The Governance Assessment Instrument (GAI) is designed to serve several purposes, explains Angela Oosthuizen, Chief Operating Officer at IoDSA. “It acts as both a yardstick for measuring corporate governance and as an enabler, assisting organisations with recommendations around the implementation of King III™,” she says. It can also serve as a gap analysis tool between King II and King III™. “Businesses can apply the GAI to discover what has changed between the two reports, and what work needs to be done to become King III compliant,” she adds.
An online tool, the GAI poses several hundred questions related to various King III™ principles. Oosthuizen says the user needn’t complete all the questions in a single sitting, but can flag those that require additional input and exit at any point, saving what has already been completed.
“The intention is that the tool should serve as an enabler and a guideline to be used on a regular basis to get a sense of where they stand in respect of compliance. Used in a dynamic and ongoing manner, rather than simply as a once-off check list, it will help maintain consistent good governance within the organisation,” she says.
As an online software service solution, the assessment tool is regularly updated in line with the dynamic nature of corporate governance regulations. Such a structure, Oosthuizen notes, has no impact on users as all patches and improvements are made on the server.
She foresees GAI providing a benchmark assessment for corporate governance practices in South Africa. “Once a critical mass of users across a wide variety of organisations and sectors is obtained, the Institute will be able to use rating statistics as part of a benchmarking process; of course, the use of such statistics would be entirely dependent on the consent of the user,” she says, noting that IoDSA has no access to individual company data.
Developing a benchmark, she says, will give the Institute the ability to report on the structures and processes of governance with a goal of attracting investment to local industry. “With a locally recognised benchmark for good governance, a positive impact on the credit rating of local enterprises is likely.”
Oosthuizen says IoDSA is presently piloting the GAI with a number of organisations and fine tuning it for general release.  The release of additional modules will include NPO, SME, SOE, Municipal, Pension Funds and Medical Schemes.  The IoDSA is on track to release these modules at the end of June for live testing with users.
Already, she says the ability to constantly develop and improve the tool is apparent. “From the pilot phase we are receiving requests to add components focused on BEE and Ethics, to name just two. It is clear that there is a lot of interest not only in the GAI™ as it stands, but in its future potential too.”