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The developments at Steinhoff have shone a spotlight on the role of the board — especially of nonexecutive directors. Many directors have wondered how it’s possible that such events could happen at a firm with a good track record and an experienced board. First, we must acknowledge that despite having King 4 and integrated reporting principles, as well as requirements for ethics policies, boards are being caught out. But if it is accepted that King 4 and other rules encapsulate best practice, the focus has to shift to how these principles are implemented. Of course, the nonexecutives don’t have in-depth understanding of the company, as they don’t run the day-to-day business. But they also often don’t have adequate industry knowledge. This must change. There’s obviously no golden key to prevent governance failures. But, in evaluating our current practices, these questions are a good start: Is there a balance of power on the board? A warning sign of a board that could be in trouble is...

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