Corporate governance is not compliance, it is character

By Nqobani Mzizi

As a young professional, I walked into my first board meeting armed with a flagged and highlighted board-pack, binders of governance codes and well-studied charters, convinced that compliance was enough.

In my mind, corporate governance was a sophisticated checklist; if we ticked all the boxes of compliance, we were doing a good job. I was wrong.

That illusion shattered when an irregularity came up for discussion. Technically, the issue could have been swept under the rug without breaking any laws.

It took one seasoned director who wisely advised, “Good governance isn’t about what you can get away with, but it’s about doing the right thing.”

At that moment, I realised that governance is not just about compliance, but rather a matter of character.

Too often, boards and executives reduce corporate governance to a narrow, legalistic exercise; obsessing over policies, checklists and ticking off charter obligations. Don’t get me wrong; laws, codes and regulations are essential.

South Africa’s own King IV code encourages organisations to apply and explain principles rather than mindlessly comply – a deliberate shift from tick-box governance to principled decision-making. Yet despite this intent, some leaders still treat governance as a burden.

When governance is approached in this minimalist way, companies might satisfy the letter ofthe rules while violating their spirit.

A company can technically meet all legal requirements and still behave unethically. Character is what fills that gap. It’s the integrity, honesty andmoral courage of leadership that give meaning to all those policies on paper.

True governance means asking uncomfortable questions: “Is this the right thing to do?” rather than just “Is this legal?”

It requires a culture where doing right matters more than looking good. In the not-so distant past, South African headlines have provided painful lessons on why values-driven governance matters.

Consider the State-owned enterprises embroiled in the Zondo Commission, which detailed how the boards had all the formal trappings of compliance yet still enabled grand corruption.

Having a risk committee and glossy ethics policies means nothing if those entrusted to lead lack integrity. In the private sector, the cautionary tales are just as glaring.

The legendary Steinhoff, once lauded as a success for its strict compliance with rules and standards, collapsed in one of the biggest corporate frauds in our history, proving that ticking all the boxes means nothing when integrity is absent.

Just this year, SAA’s governance was tested again when the board objected to a politically connected candidate as CEO, but their protest was allegedly overridden by the shareholder minister​.

The episode sparked public outcry because it felt like politics once again trumping principle. Yet there are boards that resist this pressure.

Consider Discovery, whose leadership took voluntary pay cuts during COVID to share stakeholder pain, or Woolworths’ decision to exit Australia at a loss rather than compromise its governance standards. These choices rarely make headlines, but they’re the bedrock of enduring trust.

This reflects what I’ve observed: organisations thrive when leaders prioritise character over mere compliance. Having served on diverse boards, I’ve observed stark contrasts in governance cultures. Some boards become so consumed by operational urgency that strategic alignment with core values is overlooked.

Others intentionally carve out space for tough questions like, ‘Is this truly serving our stakeholders?’, even when it slows decision-making. The latter may not always win applause, but they foster trust through transparency.

Decisions improve when dissent isn’t just allowed but expected.

One lesson I’ve drawn from experience is that character shows itself in the small moments. It’s in the director who voices an uncomfortable truth when it’s easier to stay silent. It’s in the CEO who forgoes a lucrative shortcut because it violates the company’s values.

These quiet acts set the tone at the top and cascade into the organisational culture. Conversely, when leadership sends the signal that “if it isn’t illegal, it’s fine,” that attitude will take root and eventually rot the whole tree.

Ultimately, corporate governance is a mirror of leadership character. Compliance is thebaseline and the rules of the game, but character determines how we play it.

As we kick off this weekly column on governance, my challenge to every leader is this: examine your governance mindset and your boardroom culture. Do you encourage candid debate and principled dissent, or is your boardroom just a box-ticking exercise?

It’s easy to blame “the system” or a few bad actors, but governance starts with each of us. We shouldn’t wait for the next inquiry or scandal to force change. Whether you’re a director or an executive, dare to go beyond mere compliance.

Make integrity non-negotiable. If we do that, we won’t just prevent the next Steinhoff fiasco, but we’ll build organisations that thrive on trust and accountability.

The best companies are led by those who do right when no one’s watching – that’s the character of true governance, and South Africa, now more than ever, needs leaders who embody it.

So the next time you sit in a boardroom, ask yourself: Are we here to tick boxes, or to do what’s right? Because governance, at its core, isn’t about rules. It’s about the people who uphold them.

Nqobani Mzizi is a professional accountant (SA), a certified director (IoDSA), and an academic.

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