Business Case forthe Pongola-Umzimkulu Catchment Management ...

Business Case for the Pongola-Umzimkulu Catchment Management Agency
The establishment grant is required to ensure that the CMA is set up and functional while
the proto-CMA improves collection of charges and prepares the CMA for hand-over of the
functions. The agriculture grant is a policy cap to ensure affordability in the agriculture and
forestry sectors. The public benefit grant is an optional grant as it provides for a more
equitable reduction in charges and covers charges which are in the public interest.
10 Institutional and governance arrangements
10.1 Corporate Governance Principles
Although targeted at private sector institutions, the King II and IIIreports on corporate
governance are increasingly recognised as important guides to the good governance of
public entities. The King II report 19 lists seven characteristics that constitute good corporate
governance: discipline, transparency, independence, accountability, responsibility, fairness
and social responsibility. Further the report refers to triple-bottom-line accounting which
embraces the economic, environmental and social aspects of a corporation’s activities 20 .
These are elements that are critical for good corporate governance, and are characteristics
and elements that should, broadly, be reflected in the governance of the Pongola-
UmzimkuluCMA.
While corporate governance in the public sector must reflect these broad principles and
good corporate governance, it is also required that public sector institutions in the water
sector:
• Contribute to achieving government’s objectives as outlined in the twelve outcomes,
the State of the Nation Address (SONA) and the Minister’s performance agreement
with the President.
• Achieve government’s transformation objectives, relating to service delivery (Batho
Pele), employment equity and preferential procurement.
The CMA as a service delivery entity must reflect and achieve the principles and elements
indicated above.
10.2 CMA Governing Board
10.2.1 Role of the CMA Board
Based on the nature of the CMA as a public entity with service delivery and stakeholder
participation elements, the board will have to have strong integrated management, financial
management, legal, human resource and participatory management capabilities.
The role of the CMA board will be as set out in the Act as well as the service level agreement
between the Executive Authority (Minister and Department) and the Accounting Authority
(CMA Board). The agreement will require a board charter that will outline the roles,
functions and conduct for board members. The charter will be tailored to meet conditions in
the Pongola-UmzimkuluCMA. Among a number of roles for the board the following will be
included:
19 King Report on Corporate Governance for South Africa. Institute of Directors in Southern Africa 2002
20 King op cit p9
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