The evolution of corporate governance in an increasingly digital world

By Mateboho Rantofi, MTN SA Company Secretary 

Mateboho Rantofi is the Corporate Governance advisor to the MTNSA Board and Executive Committee. Overseeing and directing the Corporate Secretarial function, including support for the Board of Directors and acting as liaison between senior management and the Board.

Companies which fail to focus on good governance today will be left behind as consumers increasingly place a premium on ethical and environmental excellence. Improving sustainability and corporate governance should therefore not be a “nice to have” but a business imperative in today’s advanced and fast-paced digital economy.  

 The reality is the digital world of the future is going to be awash with many new innovations that will require greater levels of trust between those delivering services and those consuming them. Smart contracts, crypto-like tokens, a decentralised web and automated transactions are all examples of how the world is getting more sophisticated – and risky. While a virtual reality world brings immense opportunities, it also raises the bar from a regulatory perspective as the integrity of the entire ecosystem must be managed so end-users, platforms and networks are protected. 

 This will all require a dedicated approach to human rights and community, labour standards, social supply chain, corporate governance and anti-corruption. But it does not stop there as corporate governance will play an even greater role in managing the immense digital change taking shape in the Fourth Industrial Revolution.  

 Increasingly, success in the modern, digital world will be based on how well leadership adapts to change. Some important lessons in this regard were learnt during the COVID-19 pandemic and I believe these should not be lost going forward. 

 One area that I do see as a key lesson from the pandemic is the way digital solutions can be harnessed to improve decision-making and boost productivity within the upper echelons of a business. At MTN South Africa we made a conscious decision to let digital pathways aid our decision-making – and we do not intend to regress.  

With an executive team in SA that forms part of a much larger global business, big decisions need to be made every day, with agility and foresight, and I certainly found that a move to more digital meetings improved attendance, focus and outcomes. An example of this is how a simple digital register helped improve attendances at meetings. We are also developing a system that can automate delegation of authority across the SA business. This will be a major innovation in the governance space from a tech perspective.  

 An imperative project currently underway is the King IV assessment and review by an external third party, to ensure governance excellence and address any gaps identified through a remedial process. This exercise is, in fact, a good example of self-compliance and regulation at work. Essentially for me it talks to us not just “doing our homework” but rather getting our homework marked. Just doing homework all the time is nothing more than ticking a box – and corporate governance and risk management today needs far more than that. 

 A key part of the corporate governance function today is about managing relationships – and none more so than between a CEO and Board Chairperson. Boards need the right level of knowledge as they are not involved in the day-to-day running of the business and so I have found that relationship building and trust is absolutely essential to ensure a company has a good record of growth-enhancing decisions, especially when working with the complexities of a modern multinational structure. A lack of trust or poor information flow and decision-making will see good progress atrophy, or good opportunities slip by. 

 All this hard work is paying off in multiple ways. We are not only improving the functioning of our business, but ensuring risks are managed and the new, modern digital economy harnessed for maximum effect. In 2022, MTN was added to a top sustainable investment index as its ratings on environmental, social and governance (ESG) performance have gone up recently. There was also an upgrade in the group’s sustainability rating by index provider FTSE Russell, and its inclusion in the FTSE/JSE Responsible Investment top 30 index, which identifies SA companies with leading ESG practices. 

 As the world continues to move at break-neck speed, there will only be a bigger role for self-regulation and governance going forward. The main problem is laws just cannot keep up.  

 I believe this will require a relook of how telecommunications companies are regulated as the old rules simply cannot be transported into the new age where a company like MTN has migrated to being a technology and platform business, dealing with social media, work-from-home bundles, AI and the bots – which is a far cry from just focusing on voice, data and SMS as we did in the past.  

 Business and regulation need to progress at the same speed in the ICT space and so at some point there needs to be a certain level of trust for techco companies to have a set framework, a clearer role for the Regulator and for the nitty-gritty governed through self-regulation.