Type of Assessment: First Examination Opportunity Qualification: MBA

Module code: MBAD 824 Duration: 3 hrs

Module name: Corporate Governance Max: 100
Examiner: Mr AP van Zyl Date: 20/05/2024
Internal Moderator: Dr Philip Steenkamp Time: 09:00
External Moderator: Dr Cornelie Crous

Important instructions:

1. Have a pen and paper ready.

2. Write your name, surname, student number and the date on the first page of your answer sheet.
3. Number each page of your answer sheet.
4. Download the examination paper from eFundi. (If you struggle contact the administrators immediately.)
5. Activate the Invigilator App. (If you struggle contact the administrators immediately.)
6. Complete the examination in your own handwriting. Typed answers will NOT be marked.
7. Stop writing at 12h00.
8. Scan each page of your answer sheet clearly and submit the scanned document on Efundi. You have
until 12h30 on 20 May 2024 to submit your answer sheet. No late submissions will be accepted.
(Contact an administrator immediately if you experience technical problems).

Allowed Resources:

During the course of this examination, you are permitted to use the following resources:
• Your prescribed textbook - either an electronic or printed copy.
• Course-specific slides, relevant legislation, the King IV Code of Governance, and class notes.
• Your computer - ONLY for the purpose of activating remote invigilation, accessing eFundi, and allowed
material referred to above.

Prohibited Activities and Resources:

While the abovementioned resources are allowed, there are strict limitations on their use. Specifically, during
the examination:

• You may not communicate with anyone about the contents of the examination for the duration thereof
in any way whatsoever.
• You are not permitted to search the web for answers or additional information.
• You may NOT use any form of assistive technology (AI, like ChatGPT), except for those explicitly listed
above. The use thereof is a form of academic misconduct and appropriate disciplinary steps will be
instituted.

General:

• This paper consists of 4 pages.

• Understand the examination structure: This examination paper consists of several questions, each
with different marking weights. Ensure that you are aware of how much each question is worth to
allocate your time efficiently.
• Read and answer all questions thoroughly: Before starting to answer, take the time to read through all
the questions. This will give you a better understanding of what is expected and can help in planning
your answers.

MBAD 824 Corporate Governance / Exam First Opp 1/4

 • Use allowed resources wisely. Utilise these resources effectively to assist you in answering the
questions. However, avoid relying too much on them and instead use them to validate and verify your
answers.
• Time management: Allocate your time according to the marks distribution of each question. Try not to
spend too much time on one question at the expense of others. It is often better to answer all questions
partially rather than a few questions perfectly.
• Answer clearly and concisely: Make your answers as clear and direct as possible. This not only makes
it easier for the examiner to follow your logic but could also earn you partial marks even if your final
answer is incorrect.
• Review your work: If time allows, review your answers before submitting your examination. Look for
any mistakes or omissions and ensure your workings and explanations are clear.

MBAD 824 Corporate Governance / Exam First Opp 2/4

Question 1 [13 marks]

The King IV Code of Corporate Governance has adopted a unique “apply and explain” philosophy.
Critically discuss the evolution of this concept, what it entails, and how it is manifested in practice.

Question 2 [10 marks]

The King IV Report stress that the hallmark of independence is the ability to bring objective judgment
and an independent state of mind to one’s duties as director. Critically evaluate the proposed
maximum tenure of 9 (nine) years for board members.

Question 3 [60 marks]

Read the following extracts from the Recommendations Report of the Judicial Commission of Inquiry
into State Capture (the Zondo Commission):

• “The appointment of members of Boards of Directors and of Chief Executive Officers for
state-owned entities is a matter of serious concern. The evidence heard by the Commission
in regard to not just Denel but also certain other state-owned entities has revealed that the
Executive very often failed to appoint the right kind of people these positions in SOEs.”

• “…it is quite clear that the appointment of members of Boards of Directors of SOEs as well
as senior executives such as Chief Executive Officers and Chief Financial Officers can no
longer be left solely in the hands of politicians because in the main they have failed dismally
to give these SOEs members of Boards and Chief Executive Officers and Chief Financial
Officers who have integrity and who have what it would take to lead these institutions
successfully. They are all going down one by one and, quite often, they depend on bail outs.”

3.1 Discuss the establishment and main characteristics of a ‘State-Owned Company’ in terms of
the relevant South African enabling legislation. (10)

3.2 Distinguish between the following ‘executive directors’, ‘non-executive directors’ and
‘independent directors’ in respect of their appointment and their role in respect of the
governance of a company. (15)

MBAD 824 Corporate Governance / Exam First Opp 3/4

3.3 Critically discuss the liability and independence of action of a board member of a State-owned
Entity (SOE) in light of the general duty of ‘independence of action’ of a board member. In
your answer also refer to the King IV Sector Supplement for SOEs in this regard. (20)

3.4 “The CEO of a company must recognise that his position does not automatically confer the
right to lead, nor does it guarantee the organisation’s loyalty.” Critically evaluate the
management of the relationship between a CEO, the Chairperson of the board, and the board
of a company. (15)

Question 4 [17 marks]

“It’s only one straw,” said 8 billion people. (Unknown)

4.1 The concept ‘sustainability’ is usually associated with the environment. Critically discuss the
expanding scope of the concept of sustainability in the contemporary South African corporate
governance context. (10)

4.2 Critically appraise the 7 (seven) compelling business reasons (developed by Bob Willard in
The Sustainability Advantage) for companies to implement sustainable business practices
and to report in a transparent fashion in terms of the triple bottom line. (7)

TOTAL: 100
File reference: 8.1.7.2.2

MBAD 824 Corporate Governance / Exam First Opp 4/4