By Alistair Collier | The Business of Golf Magazine
Dear Club Manager, Director of Golf, Course Superintendent,
As you know Sustainability has three pillars. This month we discuss the third pillar, good governance. Yours in sustainable golf.
Every year golf organisations such as Golf RSA, provincial golf unions and golf clubs prepare their annual financial statements, which are approved and signed off. The notes to the accounts usually have a statement to the effect that the annual financial statements have been prepared in accordance with International Financial Reporting Standards (IRFS) for small and medium entities. This statutory requirement has been in place for several years.
Notwithstanding the above there has been a shift wherein it is no longer sufficient to merely report on the financial position of an entity, but also to report on environmental, social and governance (ESG) issues as well.
Many golfing organisations in South Africa have been reluctant to address ESG issues, in particular the “G” or governance aspects of an entity.
The usual reasons given for this reluctance include, the entity is not listed on the JSE, being too small, costly implementation, administrative complexity, an entity’s existing culture of applying principles of transparency, accountability and ethical leadership, and governance principles are not applicable to them, especially as they have been operating successfully without such measures.
Regrettably, in South Africa there have been far too many examples of governance failures.
For example, during 2024 hardly a month went by without one of the national sporting organisations being in the press for the wrong reasons. It is suggested that with the necessary governance principles in place, many of these failures could have been prevented or mitigated Notwithstanding the formal developments, as referred to above, we note that our courts are also taking cognizance of governance principles.
In September 2024, the Centre for Environmental Rights and the Institute of Directors of South Arrica published a legal memorandum dealing with “Director duties and liability for climate risk under South African law.” This memorandum emphasises the critical point that the fiduciary duties of directors are mandatory and apply to all companies, including all golfing entities.
Furthermore, the memorandum states that the King Reports have been relied upon by our courts to embed an understanding of these duties and are now readily relying on non-binding standards of good governance to give meaning to director’s duties, as has been codified in the Companies Act.
In closing, we wish all entities operating within the golfing industry a blessed and happy Christmas and prosperous and productive 2025, and a big thank you to all of the golf clubs who participate in the John Collier ESG survey.
As a final thought in preparing for 2025, it is inevitable that compliance reporting on IFRS ESG principles is coming. While the 17th edition of the John Collier Annual Survey dealt with ESG issues, if one is looking for further guidance, one needs to look no further than the ESG Sustainability Integrated Report of Remgro Limited, which was recently signed off by its Chairman, Mr. Johan Rupert, who, as many of you will know, is also Chairman of Golf RSA, and a major benefactor of golf in South Africa through Golf RSA.
If you have any queries, why not contact the John Collier Golf through our website or via email ajcollier@telkomsa.net?
Yours in Sustainable Golf
JOHN COLLIER
If you have any questions, please do not hesitate to email ajcollier@telkomsa.net or visit the John Collier Golf website at www.johncolliergolf.com