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Skills Development Act, 1998 (Act No. 97 of 1998)


Constitution of the Tourism, Hospitality and Sport Training Authority (THETA)


Annexure D : Governance - Roles of and Guidelines for Members


All Members


The following excerpts from the King Report deal with the responsibilities of directors of companies and have relevance as general guidelines for all Members.


1. THETA individually and collectively, is responsible to the stakeholders.


2. Members should ensure that they have the time to devote to and carry out properly their duties and responsibilities to THETA.


3. Members should be informed about the financial, social and political milieu in which THETA operates.


4. Members must be satisfied that they are in a position to make informed decisions.


5. Members must never permit a conflict of duties and interest.


6. Members must disclose potential conflicts on interests at the earliest possible opportunity.


7. Members must act independently of any outside fetter or instruction.


8. Members must act with enterprise and always strive to optimise the interests of all stakeholders.


9. Members must ensure that all interested parties are fully informed of any material matters affecting THETA and that openness and substance will be guidelines rather than mere formality.


10. Members must exercise the utmost good faith, honesty and integrity in all dealings with or on behalf of THETA.


11. Members must exercise the care and skill, which may reasonably be expected of a person of their expertise.


12. Members must always act in the interests of THETA and never for any sectoral interest.


13. Members must ensure that THETA strategy and structure has been collectively agreed to.


14. Members must insist that papers and information be given to them timeously so that they have adequate time to study and make properly informed decisions.


15. Confidential matters of THETA, learnt in their capacity as a Member, should be treated as such and should not be divulged to anyone without the authority of THETA.


16. If a Member is in doubt about any aspect of his duties they should obtain independent advice, e.g. Department of Labour, professional consultants, etc.


17. Members must ensure that THETA prepares annual budgets against which performance can be monitored.


18. Members must ensure that procedures and systems are in place to act as checks and balances of the information being received by the Board.


19. Members must ensure that the Board monitors the performance of Executive management against budgets, business plans, SSP's, National norms, prior year's performance etc.


20. Members must ensure that THETA has equity plans in place/advances Members of formerly disadvantaged (designated) communities.


21. As set above, Members have two categories of duties, viz. the duty of care and skill:
21.1 particularly in the case of non-Executive Members (non-Exco Members) their appointments are onerous in the context of the present test of their duty, care and skill;
21.2 Members should not be liable for a breach of their duty and skill if they have exercised a judgement in good faith in a matter which the under mentioned three criteria are satisfied, viz.:
21.2.1 that the decision is an informed one based on all the facts of the case;
21.2.2 that the decision is a rational one; and
21.2.3 that there is no self-interest.


22. Not every stakeholder is aware of the responsibilities of Members and consequently reports by THETA should incorporate statements on the following:
22.1 the financial statements fairly presents the state of affairs of THETA;
22.2 adequate accounting records have been maintained,
22.3 suitable accounting policies consistently applied and supported by reasonable and prudent judgement and estimates, have been used in the preparation of the financial statements;
22.4 applicable accounting standards have been applied, but if there has been any departure in the interests of presentation, it must be disclosed and explained.
22.5 an effective system of internal control has been maintained;
22.6 if the Members are in any doubt about the ability of THETA to continue as a going concern in the year ahead this should be stated.


23. There should be a procedure for Members in the furtherance of their duties to take independent professional advice if necessary at the expense of THETA. Before doing so the matter should be discussed with the Chairperson and if is appropriate, then with other Members. Whatever the outcome of that they must take a decision on their own but satisfying themselves that their conduct is in the best interests of THETA.


24. The Members have to ensure that the THETA remains a going concern, i.e. that it thrives and survives.


25. Non-Executive Members
25.1 Every Member has equal responsibility regardless of their position on Exco. All Members have an equal responsibility when it comes to the question of good faith.
25.2 THETA collectively, and more particularly the non-Executive Members individually, are reliant on the information placed before them at meetings. It is on this information that decisions are made. It follows logically that THETA must ensure that there are checks and balance to maintain a level of accurate reporting.


26. Non-Executives have four important functions
26.1 They need to bring their special expertise and knowledge to bear on the strategy. They should be driven by a broad strategic perspective.
26.2 They can monitor and review th8 performance of the Executive Management more objectively than the Executive Member.
26.3 They can act as a check and balance against the Executive Members.
26.4 A non-Executive Member must develop a working knowledge of THETA, be cognizant of the economic social and political milieu in which THETA operates and have understanding of the availability of finance, staff and technical resources and level of current and proposed expenditure. They must use their best endeavours to ensure that THETA operates within the law and also ethically.