Turnaround Professional Body Governance Structures

Jan van der Walt (Director: Certification)March 2010

Turnaround Professional Body Governance Structures

The Turnaround Certification Governance Board of TMA-SA and its Standards and Academic Subcommittees

The premier professional community dedicated to corporate renewal and turnaround management

1. The turnaround industry in South Africa and the need for certification2. Turnaround professional body3. Turnaround professional body governance structures4. Turnaround professional qualifications and qualifications

TMA-SA Presentations on Turnaround Certification

Turnaround Professional Body:

Overview Turnaround Certification Governance Board Standards Subcommittee Academic Subcommittee Role of Services SETA

Turnaround Professional Body Governance Structures – March 2010 4

Overview

OVERVIEW

Turnaround Governance Board

Academic Subcommittee

Standards Subcommittee

Preparing body of knowledge

Preparing, administering and scoring certification examinations

Continuing education and recertification programmes

Applications Establishing and

maintaining ethical and other professional standards

Investigating any allegation that standards were violated

Disciplinary measures

Define and administer standards of education, experience and professional conduct

Review and approve the format of all application and reference forms used

Determine whether an applicant has met standards for certification

Grant waivers or modifications

Hear and resolve complaints relating to failure to maintain standards of professional performance

Decide all requests for reconsideration of denials of or revocations of certification

Review and approve or deny continuing professional education credit requests that fall outside normal established parameters

Annually review certified members who fail to meet requirements

Turnaround Certification Governance Board and its Subcommittees:




The Turnaround Certification Governance Board fulfils an oversight role over the functions of its subcommittees

Functions of the Turnaround Certification Governance Board (TCGB) Define and administer standards of education, experience and professional

conduct Review and approve the format of all application and reference forms used Determine whether an applicant has met standards for certification Grant waivers or modifications of specific certification requirements for good

causes Hear and resolve complaints relating to a certified member's failure to maintain

standards of professional performance Decide all requests for reconsideration of denials of or revocations of

certification Review and approve or deny continuing professional education credit requests

that fall outside normal established parameters Annually review certified members who fail to meet requirements

TURNAROUND CERTIFICATION GOVERNANCE BOARD


Turnaround Certification Governance Board membership requirements

The board may not exceed fifteen (15) members Each TCGB member shall be elected to a one, two, or three year term In order to demonstrate independence from potential undue influence, the TCGB

will not contain current TMA-SA's board members except for:– A transition period to establish the Turnaround Certification Governance Board and the certification

programme

– The CEO of the TCGB, who will assume the role of the Certification Director on the TMA-SA's Board of Directors

A firm may not have more than one representative on the TCGB, with the exception a transition measure and with the approval of TMA

The TCGB will consist of established leaders and respected individuals in the turnaround and business rescue fields such as turnaround professionals, workout lenders from banks, attorneys, and judges



Turnaround Certification Governance Board membership requirements (continued)

Additionally, other stakeholders in turnaround certification may also form part of the TCGB as representatives from other constituencies

All turnaround practitioners and advisors who are initial TCGB members must agree to become certified as soon as feasible



Half of the Turnaround Certification Governance Board requires stringent requirements for board membership

At least 50% plus one member of the Turnaround Certification Governance Board will be TMA-SA members complying with the following requirements:

– Two case studies of companies or organisations for which the prospective Board member has been engaged and has successfully completed turnarounds

– Three letters of recommendations from clients other than the two cases

– Three letters from others in the industry with which the prospective Board member has had direct dealing, such as bankers, attorneys, government officials, and so forth

• Such letters of recommendation should comment on the proposed Board member’s qualifications, skills and integrity

– A bachelor’s degree from an accredited university or at least ten (10) years of experience in executive or senior management, interim management, consulting, loan workout/restructuring, or in the legal or accounting professions or as a Business Rescue Practitioner

– A minimum of five (5) years of experience as listed above, three (3) years of which must be in turnaround, two (2) years of which must be with regard to companies suffering financial distress or in a financial crisis

• The experience requirement is the largest hurdle

– Member in good standing of TMA-SA



Appointment of the Turnaround Governance Board

The Board of TMA-SA appoints only the initial Turnaround Certification Governance Board and its officers

After the initial terms have elapsed, the Turnaround Certification Governance Board become self-perpetuating by appointing for the next year, its:

– Chairperson (which will be a TMA-SA member)

– Deputy Chairpersons

– New board members

provided 50% plus one of board members are TMA-SA members complying with the criteria previously discussed

The Turnaround Certification Governance Board appoints its Standards and Academic Subcommittees



Turnaround Certification Governance Board nominations

Chairperson nominee: Professor Mervyn King (Brait, King III, etc.) Deputy Chairperson 1 appointment: David Harding (Corporate Renewal Solutions

and present TMA-SA Board member):– He is the most experienced TMA-SA member

– Note it is proposed that a TMA-SA veteran be the Deputy Chairperson 1 for the initial Board.

Deputy Chairperson 2 nominees: Themba September (Ingerop, ABASA), or Patrick Daly (Daly Maqubela Oliphant, ex-ABASA, King III Business Rescue Task Force, LSSA):

– Note it is proposed that a senior ex-ABASA member be the second Deputy Chairperson, and that ABASA members going forward into the TCGB provide their preference for the Deputy Chairperson 2 position



Nominations: Group 1 of the TCGB representing TMA-SA members not in Group 2 and non-TMA-SA members, and representing at most 50% of the TCGB

Nominee: Themba September (Ingerop, ex-ABASA) or Patrick Daly (Daly Maqubela Oliphant, ex-ABASA, King III Business Rescue Task Force, LSSA) depending on who is not elected as Deputy Chairperson

Nominee: Ntombi Langa-Royds (Nthake Consultants and Corporate Renewal Solutions, 2009 Chair of TMA-SA)

Appointment: Professor Anneli Loubser (UNISA, King III Business Rescue Task Force, doctoral student in law, present TMA-SA Board member, a statutory position on the TCGB as Chair of the Academic Subcommittee in terms of certification by-laws)

Nominee: Judge Ralph Zulman (King III Business Rescue Task Force) Nominee: Danile Nyalunga (Head of Workout and Restructuring, IDC) Nominees: A nominees from organised labour is awaited



Nominations: Group 2 of the TCGB representing TMA-SA members complying with prescribed requirements, and together with the Chairperson, representing 50% plus one of the TCGB

CEO: Jan van der Walt (Corporate Renewal Solutions, King III Business Rescue Task Force, ex-ABASA, doctoral student in business with a research interest in business rescue, presently on the TMA-SA Board; in 2009 on TMA-SA Board as Certification Director in terms of certification by-laws, member of the Academic Subcommittee and Chair of the Standards Subcommittee)

Secretary: Philip Reynolds (Deloitte, SAICA), presently on the TMA-SA Board as Secretary)

Nominee: Karl Gribnitz (Gandalf Trust, presently on the TMA-SA Board) Nominee: Gert Holtzhauzen (Nedbank, Banking Association of SA, past Chair of

TMA-SA) Nominee: John Sherrat (JWS Advisors, experienced corporate turnaround

manager who established a certification programme with Services SETA before) Nominees: One of Alistair Moffat or Lindsay Robertson (both from FRM

Strategies), with the other as Alternate Director (permission for Alternates are still to be obtained)



Most Chapter 6 business rescue stakeholders are represented by present Turnaround Certification Governance Board nominations

Boards of directors: Professor Mervyn King also represents the Institute of Directors

Affected persons:– Shareholders: Professor Mervyn King also represents the Institute of Directors

– Creditors: Secured creditors are represented by Gert Holtzhauzen of Nedbank (and the Banking Association). Unsecured creditors are not represented

– Employees/trade unions: Provision is made for a representative of organised labour

– Business Rescue Practitioners: a number of nominees will qualify as Business Rescue Practitioners in terms of the programme's certification designations





The Standards Subcommittee is responsible for applications, standards and disciplinary action

Functions of the Standards Committee: Reviewing, approving, rejecting or deferring the applications of all applicants for

certification, and reviewing inquiries and appeals regarding certification, in accordance with such rules and regulations relating to granting and maintaining certification as the TCGB may adopt

Establishing and maintaining ethical and other professional standards for certified turnaround professional

Investigating confidentially any allegation that a certified turnaround professional has violated the standards so established

Implementing confidentially appropriate disciplinary measures against turnaround professionals found to have violated those standards

STANDARDS SUBCOMMITTEE


Appointment of the Standards Subcommittee

The Turnaround Certification Governance Board appoints the Standards Subcommittee

Final approval of the Standards Subcommittee must be obtained from TMA International’s Certification Oversight Committee

At least 50% of the members of the Standards Subcommittee will be TMA-SA members, and will comply with the criteria applicable to TCGB TMA-SA members

Ideally, no term limits are imposed on members of the Standards Subcommittee Members’ tenure is designed to be lengthy so that the history of the program and

the institutional knowledge obtained remains with the committee The committee should be populated with professionals similar to the Turnaround

Certification Governance Board, however the number of members required is determined by TMA-SA

All turnaround practitioners and advisors serving on any subcommittee shall strive to hold the Certified Turnaround Professional designation (“CTP”)



Standards Subcommittee nominations

Chair: Jan van der Walt (in terms of the certification by-laws the CEO of the TCGB will be the Chair of the Standards Subcommittee):

– Appointed by the TMA-SA Board on 19 March 2009 Philip Reynolds (Deloitte, presently a TMA-SA Board member):

– Appointed by the TMA-SA Board on 19 March 2009 – note that technically, in terms of the by-laws, the TCGB should endorse this appointment)

Nominee: Dale Pudney (Dale Pudney & Associates, presently a TMA-SA Board member)

Nominee: Garrath Rosslee (One World Consulting, ex-TMA-SA Board member):– With his HR background, Garrath is ideal for this position

Nominee: Jill Oliphant (Daly Maqubela Oliphant, ex-ABASA, LSSA):– She has accepted nomination John Evans (RS Advisors, ABASA, SAICA):– He has accepted the nomination, but since he will be overseas for some time he suggested

that another member be nominated Nominee: Riza Moosa (Deneys Reitz Attorneys:

– He has not yet accepted his nomination.



Standards Subcommittee nominations - 2

Ideally, membership of this subcommittee should represent a spread of:– The Turnaround Management Association - Southern Africa

– Banking Association

– Law Society of South Africa

– South African Institute of Chartered Accountants





The Academic Subcommittee is responsible for the body of knowledge, exams and continuing education

Functions of the Academic Committee: Preparing for approval by the Standards Subcommittee a South African body of

knowledge required for certification, customised from the body of knowledge of TMA

Preparing, administering and scoring South African certification examinations, with reference to the examinations of TMA

Administering the continuing education and recertification programmes

ACADEMIC SUBCOMMITTEE


Appointment and functioning of the Academic Subcommittee

The Turnaround Certification Governance Board appoints the Chairperson of the Academic Subcommittee

The Chairperson of the Academic Subcommittee, with the Turnaround Certification Governance Board, is responsible for recruiting subject matter expert contributors to the development of a body of knowledge applicable for the turnaround and corporate renewal practices within South Africa

These subject matter experts will serve as the Academic Subcommittee, and must have extensive knowledge of South Africa legal, managerial, and accounting and financial regulations

Individuals’ names, titles, contact information and bios must be provided to TMA International’s Certification Oversight Committee. In addition, TMA-SA must provide the name, contact information, and credentials of the chairpersons of the Academic Subcommittee to TMA International’s Director of Certification for approval by TMA International’s Certification Oversight Committee prior to final appointment

TMA International’s Certification Oversight Committee must be notified if there is a change of Chair of the Academic Subcommittee, and the name, contact information, and credentials of the new individual must be provided



Academic Subcommittee nominations

Chairperson: – Professor Anneli Loubser (UNISA, King III Business Rescue Task Force, doctoral student in

law, present TMA-SA Board member, a statutory position on the TCGB as Chair of the Academic Subcommittee in terms of certification by-laws)

– Appointed by the TMA-SA Board on 19 March 2009 – note that technically, in terms of the by-laws, the TVGB should make this appointment)

Law:– Professor Anneli Loubser

– Nominee: Professor David Burdette (Nottingham Trent University, ex-ABASA, King III Business Rescue Task Force, ex-TMA-SA Board member)

– Nominee: Lawrence Ngobeni (The Insolvency Firm, ex-ABASA, King III Business Rescue Task Force, doctoral student in law)

Turnaround Management:– Nominee: Professor Marius Pretorius (Associate Professor in Strategy, Leadership and

Turnaround in the Department of Business Management, University of Pretoria)

– Nominee: Frans van Heerden (Associate director of and lecturer at Wits Business School)



Academic Subcommittee nominations

Finance and Accounting: – Nominee: Professor Ebo Oost (UP)

– Nominee: Christiaan Lamprecht (USB)

General: – Nominee: Professor Neil Harvey (Seidman College of Business, Grand Valley State

University in Michigan, founder member of TMA-SA). He and Frans van Heerden have convened and lectured at the Managing a Turnaround and Corporate Renewable programme at Wits Business School from 2002 to date

– Jan van der Walt (in terms of the certification by-laws the CEO of the TCGB will be a member of the Academic Subcommittee)





Role of Services SETA

Development of professional designations (See “Turnaround Professional Qualifications” presentation):

– Assistance with approval of professional designations by SAQA

Broader consultation - engagement with dti, Ministry of Finance and South African Revenue Services

Turnaround to be recognised as a profession Placing the turnaround profession on the BUSA (Business Unity South Africa)

agenda as the regulatory authority of Business Rescue Practitioners Applying to government to have TMA-SA recognised as the regulatory authority

of Business Rescue Practitioners TMA-SA to represent BUSA with regard to turnaround matters

ROLE OF SERVICES SETA

Turnaround Professional Body Governance Structures – March 2010

Questions?

Register as a member:www.tma-sa.com/members/tma registration.asp

Contact details for Susanne Braatvedt (Administrator):

Tel.: 082 950 2624 Fax: 086 592 3619 Web site: www.tma-sa.com Email: [email protected]

Turnaround Management Association – Southern AfricaDirector Certification: Jan van der Walt

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