Board Digest 2024

The SAICA Board met on 29 November and 6 December to deal with the following matters:

1. Board Approvals
2. Resolutions adopted by the Board
3. Integrated Quarterly Report (Q3)
4. Note the reports of the various Board committees.

1. Board Approvals
The Board discussed and approved the following documents and/or matters:

• SAICA Code of Professional Conduct Amendments (Revisions to the Code Addressing Tax Planning and Related Services)
  • The tax planning and related services revision to the Code without amendments, with the recommendation that SAICA must develop guidance to support the institute and members with the implementation and monitoring of the revisions.
  • The revisions to be effective for tax planning activities beginning after 30 June 2025, in alignment with the International Code of Ethics for Professional Accountants’ (IESBA’s Code) final pronouncement.
  • The transitional provision for tax planning services or activities that commenced before the above effective date may be continued and completed under the Code's extant provisions aligned with the IESBA’s final pronouncement.
• Centre for Audit Quality (CAQ)
  • The proof of concept document relating to establishing the CAQ, including the proposed changes in the Governance Framework.
• SAICA Board Reserved Policies and Frameworks
  • The policies approved were the SAICA 2024 Annual Integrated Report Framework, Stakeholder Management Policy; Enterprise Risk Management Policy and Framework; Combined Assurance Management Policy and Framework, Business Continuity Management Policy and Framework, Compliance Policy, SAICA Group Risk Appetite and Tolerance (RAT) Framework; and the Non-Audit Services Policy.
• SAICA Board Sub-Committee Terms of Reference
  • The amendments to the SAICA Board Sub-Committee Terms of Reference for the Audit and Risk Committee (ARC), the Human Resources and Remuneration Committee (HR REMCO), the Nomination and Governance Committee (NOMGOV), the Social Ethics and Transformation Committee (SETCO), and the Digital Transformation Governance Committee (DTGC).
• SAICA Organisational Review and Organisational Structure highlighted the following:
  • The benefits of Ushintsho should enable SAICA to be an Insights Driven Organisation and the need to complete the remaining stage of the Ushintsho project.
  • SAICA must become an Insights Driven Organisation.
  • A review of the Organisational Structure and Member Growth data identified areas of improvement with: the Associate General Accountant AGA(SA) growth, investment to address the maths and accounting challenges, group structure changes, Accounting Technician AT(SA) growth, a focus on student model and organisational structure design change, as well as possible new designations related to sustainability and tax.
• SAICA Business Plan and Balanced Scorecard (BSC) 2025
  • The Business Plan elements, as per the governance matrix, incorporated five key business planning principles (channel excellence; segment ownership; service delivery and innovations; business partnering; and streamlined technology and data insights) to ensure robust execution, enabled by sound institutional understanding, which will ultimately drive growth and efficiency in the organisation.
  • The SAICA Group Proposed BSC 2025 was reviewed per the revised operating model. The review process recognised gaps, and impact-focused strategies were suggested to bridge the gap by developing SMART and impactful measures to enable the organisation to achieve its strategic objectives.
  • Subcommittees of the Board assessed and provided input on the Key Performance Indicators (KPIs) they oversee and proposed them through the HR-REMCO for the Board’s approval.
• SAICA Budget for 2025-2027
  • The budget for the financial period ending 31 December 2025 was approved with a three-year financial outlook, subject to the review of the 2026 budget with the final property project outcome to be considered and approved by the Board.
  • The membership fee was approved at a 5.5% increase for 2025, and members over 60 had no fee increase.
• Delegation of Authority (DOA)
  • The Board Charter states that the DOA is evaluated annually or whenever there is a change in the Institute's organisational structure. The Audit and Risk Committee (ARC) evaluated the suggested changes to the DOA that the Board approved.
• Performance Management Policy
  • The Performance Management Policy is directly connected to the Remuneration and Reward Policy, and the Human Capital and Remuneration Committee (HC & REMCO) evaluated this policy, recommending that it be elevated to a Board reserve policy. The Board approved the recommendations.
• SAICA Board Observer Role
  • At the 2023 SAICA Annual General Meeting (AGM), a recommendation was raised for a young CA(SA) to gain exposure on the SAICA Board.
  • The Nominations and Governance Committee (NOMGOV) considered the proposal for an observer, interviewed the candidate, and recommended her for Board approval.
  • The proposed candidate, Ms Monyamane, was approved to serve as a SAICA Board Observer for the one-year pilot project starting on 1 January 2025.

2. Resolutions adopted by the Board
The following resolutions were adopted:

• The SAICA Board Annual Meeting Planner for 2025.
• The SAICA Board in-committee meeting minutes.

3. Integrated Quarterly Report (Q3)
The implementation of the SAICA strategy for 2024-2028 is tracked through the Balanced Scorecard (BSC). The strategic initiatives that influence performance are also thoroughly observed. The total Q3 SAICA pre-audited indicative score was considered.

• Challenges and Opportunities
  The actual performance of Ushintsho could decline due to project delays and issues that arose post-implementation, as well as member data clean-up challenges.

4. Note the reports of the various Board committees
The Board noted key activities from the National Council and Board subcommittees.

• The National Council Report update from the CEO and key focus areas, the next steps for the governance review, reporting from key constituents, the National Council work plan for 2025 and nominations for Honorary Life Membership.
• The DTGC Report updates on the Ushintsho and IT Strategic Projects, Project Management Office (PMO), Audit Findings and Ushintsho Maturity Scores. SAICA also received a bronze award for having one of the best corporate websites as well as an Innovation Award for its outstanding APC e-writing system.
• The HR-REMCO report on the benchmarking of board fees, Human Capital Risk Register, and Human Capital (HC) Report.
• The NOMGOV report on appointments to the International Federation of Accountants (IFAC) Board, Thuthuka Education Upliftment Fund (TEUF) funding risk exposure, and currently reviewing the Governance Framework.
• The Social Ethics and Transformation Committee (SETCO) report noted the Board Policy on Members’ and Prescribed Officers’ Interests, the Employee Code of Ethics Policy, and the Member Legal and Disciplinary Report for Q3.
• The ARC report approvals were the ARC Terms of Reference, the 2024 Integrated Report Framework, the Risk Compliance and Finance Policies and Frameworks, the SAICA Group 2025-2027 Budget, the CAQ Budget, the SAICA Group Delegation of Authority and the Fraud Prevention Policy.

SAICA is dedicated to its strategic goals and will keep interacting with stakeholders, promoting a robust audit profession, and investing in its members and staff. We are confident that these initiatives will place SAICA for ongoing success and leadership in the accounting and auditing field.

As the year comes to a close and the holiday season approaches, I convey my heartfelt gratitude to all of our members and associates. Your commitment, effort, and pursuit of excellence are the key factors contributing to SAICA's success.

The SAICA Board met on 17 September 2024 to deal with the following matters:

1. Board Approvals
2. Resolutions adopted by the Board
3. Integrated Quarterly Report (Q2)

1. ​Board Approvals
   The Board discussed and approved the following documents and/or matters:
   

• SAICA Code of Professional Conduct Amendments
  • The amendments related to the Revisions to the Definitions of Listed Entity and Public Interest Entity (PIE) and Technology-Related Revisions to the Code with an effective date of 15 December 2024.
    
• National Public Sector Committee (PSC)
  • The Public Sector Committee to be elevated to a prescribed committee pending amendments to the Constitution and approval by SAICA members and associates at the AGM.
    
• Centre for Audit Quality
  • In principle, the establishment of the Centre for Audit Quality (CAQ) as a voluntary association initially under SAICA’s control to transition to a related entity.
    
• Internal Audit Charter
  • The International Standards for the Professional Practice of Internal Auditing (Standards) recommended that the Chief Audit Executive and SAICA management review the SAICA Internal Audit Charter annually, with changes approved by the Audit and Risk Committee (ARC) and the SAICA Board.
  • The Charter defines the Internal Audit Function’s purpose, mission, authority, and responsibility. The Charter establishes the Internal Audit Function’s position within SAICA, including the independent reporting relationships with the Board and authorised access to records and personnel in conformance with the Standards.
  • The guiding principles in the Standards and the Institute of Internal Auditors (IIA), and IIA Position Papers served as benchmarks for the Charter.
    

Resolutions adopted by the Board
The following resolutions were adopted:

• The appointment of Board Members to the SAICA Board Subcommittees. The SAICA Board can appoint Board Members to the SAICA Board Subcommittees. The Board may appoint its members or non-members, as well as SAICA members or associates as they deem fit, to any Board Subcommittee. The Nomination and Governance Committee (NOMGOV) discussed the subcommittee composition at the meeting on 11 June 2024 and recommended a resolution for the Board.
  
• The appointment of a SAICA Public Officer. The South African Revenue Service (SARS) requires appointing a public officer for a company who acts as the company's official representative for all tax purposes.
  
• The 2023 Group Annual Financial Statements were updated and approved for publication on the SAICA website. The comments informed the changes to the Group AFS received from members and associates after the publication of the AGM Notice. Management considered the inputs and made necessary enhancements to the AFS to ensure that the Standards Division adequately addressed and further reviewed all issues as an additional quality improvement process before submission for review by the Audit and Risk Committee (ARC). The Mazars External Auditors considered and approved the changes.
  

Integrated Quarterly Report (Q2)
The comprehensive evaluation report assessed SAICA's performance in an integrated manner. Here is an update on the progress towards SAICA meeting its strategic goals, as listed under the four strategic pillars:

• Accelerated Member Value
  SAICA remains committed to providing quality products and enhanced services to benefit its members and associates. Necessary actions involved in implementing the Member Experience strategy, improving member satisfaction through specific engagement campaigns, and significant events like the AGM and recognition programs. SAICA improved operational efficiency by creating Associate Technician AT(SA) qualification learning materials and streamlining internal compliance procedures. Despite encountering issues with system communication, there was a substantial advancement in supporting members, especially in technical aspects such as auditing and tax, and resolving 98.1% of the queries by the end of June 2024.
  
• Economic and Social Relevance
  SAICA further solidified its advocacy for the profession by making important submissions to regulatory bodies and participating in global forums. Noteworthy successes consisted of advancements in the worldwide affiliates' frameworks with continued involvement in the Global Accounting Alliance (GAA), Chartered Accountants Worldwide (CAW), and Pan-African Federation of Accountants (PAFA) subcategories on sustainability, and support for the International Financial Reporting Standards (IFRS) Foundation. SAICA's ongoing dedication to linking the profession with broader economic and social objectives is demonstrated through these actions.
  
• Attractiveness and Transformation
  Significant advancements in the transformation field were a result of the Thuthuka initiative. SAICA showcased its focus on attracting young talent through "Beyond the Numbers," the organisation's youth engagement strategy. Training office initiatives included the implementation of the SAICA Electronic Assessment Tool (EAT) and the Training Contract Management System (TCMS) and assisting training providers in aligning with SAICA’s competency framework. Collaborations with the government also played a role in changing the profession by providing increased opportunities for education and financial aid. Despite having a total membership exceeding 60 000 for CA(SA) and AGA(SA) members, the conversion rate remains a concern.
  
• Winning Organisation
  SAICA's IT Strategy has enhanced operational efficiency by implementing crucial digital projects in the Ushintsho program, enhancing business automation.
  Furthermore, SAICA's ongoing commitment to governance and internal efficiencies was demonstrated through implementing the leave module and strict adherence to Employment Equity objectives. In addition, a gap analysis evaluated SAICA's readiness to implement the International Sustainability Standards Board (ISSB) sustainability reporting standards after 2025.
  
• Challenges and Opportunities
  Although SAICA made progress in its priority areas, the report highlights some obstacles, such as difficulties in member communication, delays in IT system integration, and limited resources affecting the implementation of certain projects. Nevertheless, these obstacles offer opportunities for enhancement in the next quarters, as strategies are in place to tackle communication tactics and member support systems.
  
• Financial Overview
  The report emphasises a strong financial performance, boosted by strategic revenue enhancements from current projects. The revenue for this quarter was 2% below the budgeted amount so far this year, primarily because of a decrease in the collection rate. The collection rate is anticipated to increase in the next few quarters, leading to the achievement of the planned revenue target.

Our appreciation extends to our members and associates for the impactful difference they make in communities and organisations they operate in.

The SAICA Board met on 31 May, shortly after the Annual General Meeting (AGM), to deal with the following matters:

1. Appointments of the new SAICA Board members, elected at the AGM
2. The Annual election of the SAICA Board Chairman
3. The Annual election of the Lead Independent Board Member
4. Reflection on the SAICA AGM

1. ​Appointments of the new SAICA Board members, elected at the AGM
   Board member rotation is a requirement as stipulated in the SAICA Constitution Par 6.2.9. I, Mr Vincent Mohau Motholo, Ms Brenda Tsvetu and Ms Babalwa Bekwa were up for rotation and we made ourselves available for re-election. We were all re-elected and are humbled and honoured to be back for a further three-year term. Ms Bekwa is back for a two-year term.
   
2. The annual election of the Board Chairman
   The Chairman of the SAICA Board is elected annually at the Board meeting that immediately follows the AGM, as stipulated in Par 6.4.1 of the Constitution. The Board unanimously agreed to reappoint me as the Chairman of the Board.
   
   The Board Chairman is responsible for the leadership of the Board and ensures that it discharges its governance role and responsibilities and focuses on strategic matters.
   
3. The annual election of the Lead Independent Board Member
   The Lead Independent Board Member is appointed annually at the Board meeting that follows the AGM, as stipulated in Par 6.5 of the Constitution. The Board unanimously agreed to appoint Ms Babalwa Bekwa as the Lead Independent Board Member.
   
4. Reflection on the SAICA AGM
   The following resolutions were passed at the AGM:
   
   • Resolution 1: The appointment of external auditors
     This resolution was passed, and we confirm the appointment of Mazars as the external auditors for the ensuing year.
     
   • Resolutions 2 - 5: The appointment of two CA(SA) candidates to the Board
     Resolution 2 for the appointment of myself, Mr Vincent Motholo, received the most votes, and I was reappointed to the Board.
     
     Resolution 4 for the appointment of Ms Brenda Tsvetu received the second most votes and she was reappointed to the Board.
     
   • Resolutions 6 - 8: The appointment of one non-CA candidate to the Board
     Resolutions 6-8 were passed and Ms Babalwa Bekwa was re-appointed to the Board.
     
   • Resolution 9: The approval of the Board fees
     Resolution 9 proposed no annual increase of the Board fees and was approved.
     
   • Resolution 10: The support for the Remuneration Policy and Report
     This resolution requires a special non-binding vote on the Remuneration Policy and Report to pass with 75% of member support and this was approved for the ensuing year.
     
     The Board also reflected on other matters raised by members during the AGM, which, among other things, included:
     
     • The excellent work done by the Brand and Marketing team in collaboration with the Legal team for a well-organised AGM event.
     • The importance of having frequent CEO Roadshows for members to engage actively with the CEO and the Board.
     • The attendance was not reflective of our membership base and requires improvement.
     • The guest speaker Chief Justice Ray Zondo attracted an audience, in-person and online, and highlighted the importance of the accountancy profession and noted the importance of a guest speaker at the AGM meeting.
     • The disciplinary process for tax practitioners is an area of concern and requires improvement.
     • The strategy for the Board composition needs to be clearly articulated to stakeholders.
     • The enhancement of communication on the online voting portal including information on server restrictions and firewall protection needs attention.
     • The overall enhancement of the AFS and IR.
     • A stakeholder engagement action plan needs to be developed to address the issues noted in the Governance Review report.

The Board thanks all members and associates who attended the AGM and shared their comments and input. All questions and comments that were not answered during the AGM have been shared with the relevant executives, and the written answers will be shared on the SAICA website by 28 June.

We refer to the resolution that was tabled by members at the AGM held on 25 May 2023. In terms of this resolution, the Board was requested to take the following actions:

• Conduct a revised “strategic input” process;
• Review the existing risk management framework of SAICA to reduce red tape; and
• Undertake a governance review.

The Board did not hesitate to action the resolution and the first meeting to discuss the necessary steps was held on 6 June 2023. (See the Board Digest following its meeting on 6 June 2023.) In communications of 19 June, the chairman of the Board also communicated the actions that would be taken to address the issues raised in the resolution.

It should be noted that the actions and processes required to address the first two items have been completely finalised and concluded.

Regarding the third aspect - the Governance review – the final report from the Governance Review Committee was tabled at the Board for the first time in April 2024. Although there were no significant findings, the extent and nature of procedures needed to inform this report are only fully understood when considering the outcome thereof.

This digest provides a high-level overview of the review's findings and upcoming actions:

Process used for the report:
An independent committee (GRC) led by Mr. Roy Andersen reviewed the governance structure. Their review considered supporting documents and included interviews with key stakeholders across SAICA.

Committee Members:

• Mr. Roy Andersen (Chair)
• Prof. Parmi Natesan
• Mr. Khaya Sithole

Key Findings:
The review identified several key areas where the governance structures across SAICA can be strengthened. While the core principles adopted in 2019 remain sound, there is a need for improved implementation and a clearer understanding of roles. Here are some of the key findings:

• The revised governance structure adopted in 2019 is fundamentally sound.
• The purpose of SAICA as outlined in the Constitution remains relevant.
• Some recommendations from the original Governance Review Task Team (GRTT) haven't been fully implemented, particularly regarding the National Council.
• The inclusion of non-CA(SA) members on the Board has brought valuable diversity.

Areas for improvement:
The review highlighted a number of areas where the current structure can be enhanced:

• Board composition, effectiveness and rotation: Improvements are needed in selecting, inducting, evaluating, and rotating Board members. The Board also requires a clearer understanding of member needs and concerns.
• Clarity of roles and responsibilities: Roles and responsibilities of the Board, National Council, and Management need clarification in some aspects. This includes the advisory role of Regional Councils and the National Council, as well as the role of the National Council in recommending Board members.
• Communication and transparency: The flow of information between management, the Board, and the National Council needs improvement. Additionally, a comprehensive communication and change management strategy is necessary to address member uncertainty about raising concerns through the appropriate channels.
• Other areas: The review also identified the need for a potential review of the management structure and leadership style, addressing backlogs in the disciplinary process, and reviewing the role and resources of Regional Councils.

Recommendations:
Based on these findings, the review committee has made several recommendations to improve SAICA's governance. These recommendations include:

• The Governance Framework should be enhanced to clarify roles and responsibilities.
• The Board selection process should be improved, particularly regarding the rigour of induction for new members.
• The flow of information between management, the Board, and the National Council needs to be more transparent and aligned with strategic objectives.
• A comprehensive communication and change management strategy will be developed.

Following engagement with affected stakeholders on these recommendations and getting input from them, the recommendations of the Governance Review Committee and suggestions will be allocated for implementation.

Update on Disciplinary Actions for Late 2019 Tax Practitioner Filings

At its meeting on 14 May, the Board noted with concern that some late submission cases initiated against Tax Practitioners (TPs) which relate to the 2019 reporting period may have to be “withdrawn”. This follows an oversight by the Tax practitioner compliance unit (Compliance).

It must be pointed out that these cases are subject to a special disciplinary procedure adopted in a resolution of the board of 9 March 2023. We refer to the member communication about this which was published on 31 March 2023.

It was noted that there was the discovery of an email that had previously been sent by the Compliance Unit which effectively extended the 10 January 2020 filing deadline to 28 February 2020. The consideration of the extension was omitted, resulting in incorrectly issuing a letter of reprimand to some members.

In light of this new information, all disciplinary charges against TPs who submitted their 2019 declarations by 28 February 2020, will be withdrawn.

The Board is deeply concerned about this oversight by management and the apparent issues of data integrity. This matter will be further investigated, and consequence management will follow.