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1 Chartered Secretaries Southern Africa CSSA International Qualifying Scheme Module outline and Syllabus Programme 4 CSSA International Qualifying Board Examination Important Note: This programme is registered on the NQF as follows: SAQA ID NLRD ID Learning Programme title (of the professional qualifying scheme) Provider NQF level Min Credits Professional Post-Graduate Qualification: Company Secretarial and Governance Practice Chartered Secretaries Southern Africa This is the final qualifying bench mark to determine academic eligibility for Membership of the Institute of Chartered Secretaries and Administrators (CSSA) also colloquially known as CIS. It can ONLY be offered and conferred by CSSA. All applicants for Membership of the Institute MUST write and pass all four examinations; NO exemptions are provided for any other qualification. Candidates must ensure that their tuition provider is accredited by the Institute to provide tuition for the programme. Candidates who pass all subjects in the CIS Programme 4 to the satisfaction of CSSA s Board of Examiners are automatically qualified as Graduates of the Institute GradICSA and as such, may also apply for Fellow membership of the CIBM. The CIBM Membership certificate and the right to use the letters FCIBM will be valid only as long as the Member continues to renew Membership on an annual basis and pay the required subscription fee. Please refer to separate documentation on the criteria for and benefits of Membership of the CIBM. Graduates of CSSA (GradICSAs) may then proceed to acquire the necessary work experience and on demonstrating the required levels of personal and professional integrity, may be admitted as an Associate Member of the CSSA (ACIS). Only on admission as an Associate or a Fellow member of CSSA (ACIS or FCIS), may one call oneself a Chartered Secretary and apply to the Institute to be eligible to practise as an Accounting Officer in terms of the relevant legislation as amended from time to time. 1. Company Secretaryship (30 credits) 1.1 Prescribed Texts Corporate Secretaryship in Southern Africa (Handbook) published by CSSA King IV report available from the IODSA Supplementary Notes available on the student portal Recommended Reading CORPORATE SECRETARIAL PRACTICE published by Juta Online downloads for registered students accessible from the Institute website.

2 1.2 Syllabus Outline Exit Level Outcome: Understand the relationship between the secretary, the board and members together as well as concepts of compliance, law and practice of meetings and share registration and apply this knowledge to the duties of a company secretary within a corporate environment. Associated Assessment Criteria An understanding is demonstrated of the different roles and responsibilities of the company secretary, the directors and board members and their interaction within a corporate environment The statutory requirements for the incorporation and running of a limited liability legal entity and, the secretary`s role in the financial year-end process and in the application of best practices relating to corporate governance is understood and applied in practice The company secretary`s role in ensuring that general and board meetings of a legal entity are lawful are understood and applied in an organisation The work done by the secretary as the company`s share registrar is explained with examples. Range: Includes the supervision of share transfer secretaries. 1.3 Syllabus Content Topic Textbook reference Roles and Responsibilities The core duties, relationship with the board of directors and the pivotal role of the company secretary in company affairs Chapter 1 The procedures relating to the appointment, resignation and removal from office of directors and the company secretary The potential for liability that may be incurred by the directors and the secretary with reference to legislation and JSE Rules The concept of the duty of care and of fiduciary duty of directors Chapter 2 The powers of directors in terms of legislation together with the memorandum of incorporation of the corporate entity The responsibilities of directors regarding loans to themselves and their duty of disclosure The definition of members of different legal entities together with an enumeration of their rights through various classes of shareholding Chapter 3 Statutory Requirements The procedures required to create the different kinds of limited liability corporate entities. [Range statement: close corporation, private & public Chapter 4 companies and contrasting the benefits of these entities with sole proprietors and partnerships] Chapter 10 The importance of the memorandum of incorporation of a company. [Range statement: contrast the memorandum of incorporation with the founding Chapter 5 statement of a close corporation] Chapter 10 Statutory compliance by close corporations and companies. [Range statement: annual and other returns to the registrar, statutory registers, retention Chapter 6 of records] Chapter 10 Compliance with the Rules of the JSE Limited Securities Exchange. [Range statement: listings, boards including ALTX, STRATE, SENS, takeovers Chapter 7 and mergers, insider trading] The purpose and presentation of the annual report and financial statements of a corporate entity and the role of auditors in this process. [Range Chapter 8 statement: interim, provisional and final results together with directors reports, chairman s report] An understanding of the key concepts in corporate governance in terms of legislation and the King Reports. [Range statement: Corporate All Governance is studied in greater detail as a subject in its own right]

3 General and Board Meetings The law and regulations concerning the convening and holding of meetings from a practical perspective. [Range statement: types of meeting, authority, quorum, chairman, formal motions, points of order, adjournments, defamation, trespass, voting, minutes] The role of the company secretary before, during and after general and board meetings. [Range statement: involvement of third parties including JSE Limited, CIPC, Master of the High Court] The statutory requirements and effects of ordinary and special resolutions with reference to resolutions of members. [Range statement: amendments, counter-resolutions, resolutions in writing] Registration of Shares The importance of accurately maintaining the share register of the corporate entity The means by which shares are acquired with the different requirements applicable to each. [Range statement: issue of fresh shares, rights offers, capitalisation offers, share buy-backs, STRATE] The differences between shares and debentures, together with the rights of their holders Chapter 11 Chapter 11 Chapter 12 Chapter 13 The share issue procedure for non-listed companies Chapter 14 The procedure for declaring and paying dividends on shares is explained in terms of legislation and JSE Limited s Rules Chapter 15 Employee share schemes are managed in terms of legislation Chapter 16 Please note that the Institute does not examine the elective component of the registered qualification in terms of the Public Finance Management Act. 2. Corporate Governance (30 credits) 2.1 Prescribed Textbook Corporate Governance in Southern Africa (Handbook) published by CSSA King IV report available from the IODSA Supplementary Notes available on the student portal Recommended Reading Online downloads for registered students accessible from the Institute website. 2.2 Syllabus Outline Exit Level Outcome: Understand and apply the concepts of corporate governance and best governance practice within a corporate and public environment. Associated Assessment Criteria The history of corporate governance is explained demonstrated by illustrating its implications and application in a company environment The functions, powers and duties of both executive and non-executive directors are explained with an emphasis on the relationship between directors and shareholders An explanation is given of all the facets of the company`s financial statements and the role of the auditor in their preparation.

4 2.2.4 Risk management knowledge and principles are applied in a company environment A risk management plan is drawn up for a range of companies and organisations. 2.3 Syllabus Content Topic History and importance A definition of corporate governance is given and an explanation is made the showing importance of good corporate governance The evolution of corporate governance is demonstrated by reference to the King I, King II and King III and King IV reports An explanation is given of the key issues of corporate governance The stakeholders in a company are identified to clarify their relationship to the organisation The different approaches to good corporate governance are explained in terms of best-practice. [Range statement: the shareholder value approach, the enlightened shareholder approach, the stakeholder or pluralist approach] The role of the company secretary in corporate governance The core concepts underlying best practice in corporate governance are understood The importance of ethics and the significance of corporate social responsibility are understood The role of the whistleblower in uncovering malpractice and unethical behaviour is considered, together with the need to establish a system to encourage and protect well-intentioned whistleblowers The role of the company secretary in promoting best practice is described Functions, powers and duties of directors The powers of directors of a company are explained in terms of current legislation and the recommendations of the King III/King IV report The duties of directors are described in terms of legislation The common-law duties of directors are explained and a demonstration is given of how effective these duties are in protecting shareholders An understanding of the relationship between a company s directors and its shareholders is demonstrated The composition of boards of directors is discussed The rights of shareholders are elucidated and a demonstration is given of how, contrary to adverse actions by the directors, these rights may be used to protect shareholder interests. [Range statement: pre-emptive rights, voting rights] An explanation is given of the use of regulatory and statutory measures against directors to protect shareholder interests. [Range statement: restrictions on share dealings by directors, disqualification of directors] The issue of a balance of power in the Board is discussed. [Range: basic board structures, the separation of the roles of chairperson and CEO, board committees, director induction and training; non-executive directors] An understanding of how detailed and regular communications between a company and its shareholders can help investors to understand company performance, objectives and strategy is demonstrated. [Range: institutional investors, general meetings, electronic communications] Company financial statements An explanation is given of the importance of clear and truthful financial statements in good corporate governance practice and the ways in which financial statements can be misleading The directors responsibilities for the financial statements of their company are explained together with the meaning of a going concern statement The role of the external auditors in the company and their appointment is explained in terms of legislation [Range statement: Contrast role of external auditor with that of internal auditor] Textbook reference Chapter 1 Chapters 10, 11 and 12 Chapter 2 Chapter 3 Chapter 4, Chapter 5 Chapter 6 Chapter 7

5 The appointment of external auditors, their appointment and the determination of their audit fees, together with the purpose of the audit report, are explained in terms of legislation and the provisions of the King III / King IV Report The need for external auditor s independence is discussed, together with threats to such independence and a demonstration is given of measures to reduce them [Range statement: the regulation of the audit profession] Chapter 7 The role of the audit committee is explained and its functions are elucidated in terms of the King Reports The role of the remuneration committee is explained and its functions are elucidated in terms of the King Reports Chapter 8 Risk management An explanation is provided of the nature and the different categories of risk as applied to corporate governance best-practice The nature of an internal control system is explained with examples of internal controls The principles of risk management are demonstrated in terms of the provisions of the King III / King IV Report The purpose of internal audit is described, together with the nature of internal audit activities, and an explanation is given of the need for Chapter 9 independence in the internal audit function The role of the Board in risk management is explained in accordance with the provisions of the King III /King IV Report An explanation is given of the requirements of the King III /King IV Report with regard to making an annual statement on internal control. 3. Corporate Administration (30 credits) 3.1 Prescribed Textbook Corporate Administration in Southern Africa (Handbook) published by CSSA Recommended King IV report available from the IODSA. 3.2 Syllabus Outline Exit Level Outcome: Understand and apply the importance of strategic and functional administration within a corporate environment. Associated Assessment Criteria The role players in corporate/public administration are identified and an explanation given of their specific roles, functions and duties The value of information as a corporate resource within the contemporary organization using examples of good practice An assessment is made of the degree of compliance of the company/public entity with current employment law and practice An explanation is given of how different forms of provision for retirement funding are implemented by companies/organisations. Range: State pension, defined contribution and defined benefit schemes The ways in which risk and its management and mitigation through insurance are addressed by organizations is explained through analysis of organizational practice An explanation is given of the importance of management and protection of fixed assets in an organisation and how they contribute to an organisation`s overall business objectives.

6 3.3 Syllabus Content Topic Textbook reference The Corporate Environment The scope of strategic and functional administration is explained together with its importance in a corporate environment. The activities of role-players in corporate administration are detailed with reference to the corporate hierarchy Chapter 1 A definition is given of the concept of best-practice relating to role-players in a corporate environment An elucidation is given of the sources and application of guides to best-practice relating to role-players in a corporate environment Information Information is defined and its importance is explained in a corporate environment [Range statement: Data and information are differentiated.] Chapter 2 A description is provided of the means of obtaining data for corporate decision-making purposes An explanation is given of the management, storage and security of information to ensure its integrity Chapter 3 The benefits and problems of continual technology changes are described with reference to their impact on the organisation Chapter 4 The need for and maintenance of information confidentiality is explained by taking cognisance of the provisions of the Promotion of Access to Chapter 5 Information Act, and the Protection of Personal Information Act. An illustration is provided of the manner in which information is used to facilitate corporate decision making Chapters 2 5 Employment Law and Practice An assessment is made of the efficacy of the human resources functions and processes with regard to job skills and ensuing recruitment and the Chapter 6 alignment with company need, policies and procedures together with relevant legislation An assessment is made of the extent to which the employer / employee contractual relationship has been properly established Chapter 7 A determination is made of the extent to which the rights of employers and employees have been recognised within the corporate environment Chapter 8; 9 A report is compiled on the extent of company compliance with skills development, employment equity and associated legislation Chapter 10 The implementation of health and safety provisions in the workplace is monitored to comply with legislation [Range Statement: Occupational Health & Safety Act and other applicable legislation] Chapter 11 A report is compiled on the extent of implementation of company wellness policy [Range statement: Present topics include HIV/AIDS, depression and anxiety, stress and current communicable diseases] Retirement Funding An explanation is given of the purpose and functions of pension and provident fund schemes [Range statement: State pension, defined contribution Chapter 12 and defined benefit schemes] The provisions of company pension and provident fund scheme policies are elucidated with reference to statutory law Chapter 13 An evaluation is provided of the administration of pension and provident fund schemes Risk Risk is defined and a demonstration is provided of the means of risk assessment and mitigation An assessment is made of the internal and external threats to a company/organisation. [Range statement: Fundamental, particular, pure and Chapter 14 business risk] An explanation is provided of the principles and concepts of insurance. [Range statement: insurable interest, disclosure, proximate cause, Chapter 15 indemnity, subrogation and contribution]

7 The different types of insurance used in a corporate environment are demonstrated within the range outlined below. [Range statement: property, liability, goods-in-transit, motor vehicle, marine, aviation, personal] Management of Assets Fixed assets are defined with appropriate examples An explanation is given of the ways in which assets are acquired, managed and physically protected A definition is given of facilities management; its functions in an organisation are identified and an explanation is given of its contribution to the overall business objectives An explanation is given of the importance of business location together with the potential impact of relocation An illustration is provided showing the importance of accommodation and space planning using appropriate sector examples The potential role of outsourcing in facilities management is explained to illustrate the benefits and pitfalls of such action Chapter Corporate Financial Management (30 credits) 4.1 Prescribed Textbook Corporate Financial Management in Southern Africa (Handbook) published by CSSA Supplementary Notes available on the student portal 4.2 Syllabus Outline Exit Level Outcome: Demonstrate understanding of the impact of the fiscal environment on the organisation and its decision-making and apply the skills of corporate financial planning Associated Assessment Criteria The financial requirements of an organisation and the financial sources available to it are researched and compared with each other An explanation is given of the role of capital markets and their efficiency as they relate to organisational investments. Range: Johannesburg Securities Exchange, Industrial Development Corporation, Business Partners (Ex SBDC), DTI agencies, Banks The nature and importance of capital structure and the cost of capital is explained in terms of their relevance for the sustainability and profitability of an organisation The principles of working capital management in the organisational context are explained with examples of good practice An analysis and interpretation are made of financial statements from an investor`s perspective Details are provided on the need for business restructuring and an analysis is made of the implications to a range of organisations An understanding is demonstrated of the impact of global and multinational operations on corporate financial management. 4.3 Syllabus Content Concepts CSSA Reference Financial Objectives: the different kinds of corporate entity and the regulatory framework within which they operate. It covers what has been done in Part 1: Chapter recent years to develop codes of good practice on corporate governance. 1 Fundamental Concepts: Present value, Time value of money, Risk and return, Financial Analysis, Efficient markets, Portfolio theory, Capital asset pricing Chapter 1

8 model Chapter 2 Chapter 3 Financial Requirements and Their Impact on Business Planning: the different kinds of financial decisions that companies must take, on what capital investments they should make, how they should provide finance for these investments and what dividends they should pay to shareholders. It covers how companies make forecasts, prepare budgets and plans and control their use of cash to implement these decisions. Financial Markets: the role of capital markets, most importantly securities exchanges. It covers the function of the JSE. The role of institutional investors and other financial markets related to the stock market, including the options markets. Share Capital: what is involved in issuing new ordinary shares, the considerations determining dividend policy and the circumstances in which companies may repurchase shares. Loan Capital and Other Sources of Finance: debt and other forms of loan capital as well as other sources of capital, including sources of finance for small businesses. Cost of Capital: the cost of equity, preference shares, debt and internally generated funds. Including how the weighted average cost of capital can be calculated and how risk can be assessed in determining the balance between equity and debt. Portfolio Theory: how and to what extent, a portfolio of investments can be diversified (spread over a range of investments) so as to reduce risk. The Capital Asset Pricing Model: relate the return required by investors to the risk of an investment and provides a measure of this risk and shows how the Capital Asset Pricing Model can be used as one of the tools of portfolio management. Capital Structure: capital gearing, which measures the importance of prior charge capital debt and preference shares as part of a company s long-term capital. It also includes the Modigliani-Miller hypothesis (MM). Working Capital and Cash Management: working capital and ratios that can be used to plan, monitor and control it. It includes the importance of controlling cash and the risks associated with overtrading and it describes the role of the treasury function in short-term cash management and the financial instruments that can be used. Working Capital Management: management of internally generated funds and the management of the other elements of working capital. It covers inventory (including Just In Time procurement and the Economic Order Quantity), debtors (including credit control and specialist forms of finance such as factoring and invoice discounting) and creditor management. Capital Investment Appraisal: identifying and investigating individual capital investment opportunities, evaluating them in terms of the returns they offer, taking action to implement investment projects and drawing conclusions from the results to help in making other capital investments in the future. A major part of the process of evaluation is carried out in financial terms and the techniques. Other criteria and techniques, some quantitative and some qualitative, may be used. Planning Capital Investment Decisions: taking account of the company-wide picture when making capital investment decisions, choosing the best option out of several. There may also be a limit to the amount of capital available for investment. In this situation, it may be necessary to plan the total portfolio of investments as a whole to take account of funding constraints, or to put projects in order of preference for the allocation of investment funds. Mergers and Acquisitions: strategic context for business reorganisation decisions, and how a company can grow by merging with or acquiring other companies. It includes the economic case for acquisitions, the regulations controlling merger and acquisition activity and the consideration offered. It covers the tactics that bidders can use, and how a company may respond to an unwelcome bid. It also includes the reasons for the success or failure of mergers and takeovers. Disinvestment, Business Failure and Business Rescue: looks at the situation where a company disposes of a business and the ways in which it can do so such as management buy outs (MBOs), buy-ins, spin-offs, sell-offs, demergers and closing down the business. The option of going private (leading to a Part 1: Chapter 2 Part 2: Chapters 1-3 Part 3: Chapter 1 Part 3: Chapter 2 Part 3: Chapter 3 Part 3: Chapter 4 Part 4: Chapters 1 and 2 Part 5: Chapters 1 and 2 Part 6: Chapter 1 Part 6: Chapter 2

9 withdrawal of the company s share quotation) is also included. It also covers corporate collapse and how it can be predicted, business rescue and company liquidations following failure. International Trade: a company with international operations on a more modest scale, particularly looking at the forms that investment may take and looks at special issues in the planning and control of a multinational company, including relations with governments. It covers financial structure and financing for multinational companies. Special issues in foreign investment decisions, including risk factors, are included. Foreign currency transactions are covered. International Finance: international financing issues include the theory and practice of exchange rate determination, ways of dealing with exchange risk, the timing of transactions, forward foreign exchange contracts, currency swaps, futures and options. Part 7: Chapter 1 Part 7: Chapter 2

10 PUBLIC SECTOR GOVERNANCE SYLLABUS AND READING LIST 2017 Prescribed Reading Title Public Finance Management Act (PFMA) Protocol on Corporate Governance in the Public Sector. 2002: Municipal Finance Management Act (MFMA) The Machinery of Government: Structure and Functions of Government Local Government and King IV Governance in SOEs Municipal Entities Governance Challenges Corporate Governance of State-Owned Enterprises: A Toolkit King IV: Report on Corporate Governance for South Africa Betrayal of the Promise. How the Nation is Being Stolen Authors National Treasury Department of Public Enterprises National Treasury DPSA PwC and IoDSA. PwC, IoDSA, and DBSA. PwC and IoDSA. World Bank. IoDSA Swilling, M. (Ed.) Daily reading of news articles on public sector organisations, e.g. Financial Mail; Business Day or online Open Book Resources Municipal Finance Management Act Public Finance Management Act Exit Level Outcome: Understand and apply the concepts of good governance within the public-sector environment. Specific Outcomes Demonstrate an understanding of the governance structures and processes of government Identify the need for good governance within the public sector Apply the principles of ethical behaviour within the public sector. Demonstrate an understanding of the governance role of decision-makers in the public sector Demonstrate an understanding of public sector accountability mechanisms PUBLIC SECTOR GOVERNANCE SYLLABUS 1. Prescribed Reading Title Public Finance Management Act (PFMA) Protocol on Corporate Governance in the Public Sector. 2002: Authors National Treasury Department of Public Enterprises

11 Municipal Finance Management Act (MFMA) The Machinery of Government: Structure and Functions of Government Local Government and King IV Governance in SOEs Municipal Entities Governance Challenges Corporate Governance of State-Owned Enterprises: A Toolkit King IV: Report on Corporate Governance for South Africa Betrayal of the Promise. How the Nation is Being Stolen National Treasury DPSA PwC and IoDSA. PwC, IoDSA, and DBSA. PwC and IoDSA. World Bank. IoDSA Swilling, M. (Ed.) Daily reading of news articles on public sector organisations, e.g. Financial Mail; Business Day or online 2. Open Book Resources Municipal Finance Management Act Public Finance Management Act 3. Exit Level Outcome: Understand and apply the concepts of good governance within the public-sector environment. Specific Outcomes Demonstrate an understanding of the governance structures and processes of government Identify the need for good governance within the public sector Apply the principles of ethical behaviour within the public sector. Demonstrate an understanding of the governance role of decision-makers in the public sector Demonstrate an understanding of public sector accountability mechanisms Associated assessment criteria Introduction to public sector governance The structures and processes of government An understanding of the structure and functions of key decision-making structures in government is demonstrated An understanding of the role of the executive structures and the powers and influence is demonstrated An understanding of functions of the executive structures and the doctrine of collective responsibility is demonstrated An understanding of the structure and functions of the civil service is demonstrated Types of public sector entities are identified and described [Range: National departments; Provincial departments; Local government; Statutory bodies and authorities; Stateowned companies (SOCs); Chapter 9 Institutions] Principles of good governance within the public sector The need for good governance in government is understood An understanding of the general principles of accountability, transparency, integrity, fairness, responsibility, consensus and public good is demonstrated

12 Associated assessment criteria Different models of governance, including international comparisons, are identified and described A knowledge of governance codes is demonstrated [Range: King IV] Principles of ethical behaviour within the public sector An understanding of ethics and values is demonstrated An understanding of rule-based and principle-based approaches is demonstrated An understanding of individual values, attitudes and beliefs is demonstrated An understanding of the impact of corporate governance codes, regulatory requirements and principles on ethical behaviour is demonstrated An explanation of the importance of ethical behaviour in a professional environment is provided An explanation of the effect of globalisation on ethical decision making is provided Ethical principles and decision-making are applied to specific scenarios An understanding of the consequences of unethical behaviour is demonstrated (including fraud, corruption) Codes of ethics and/or conduct are identified and described Conflicts of interest and political association are identified and analysed The role of decision-makers An understanding of the structure of public sector entities is demonstrated [Range: Governing boards; Advisory boards; Role of CEO or head of department or agency; Role of chairman within public sector entities; Role of board members (committees: tender committee; audit committee; remco; risk); composition; induction; education and training; ex-officio members] Charters or terms of reference are evaluated An understanding of board performance and evaluation is demonstrated Directors duties are identified [Range: risk management; internal audit; compliance; insurance and indemnity] Shareholders and stakeholders The principles of stakeholder theory are applied to specific scenarios The various stakeholders of public entities are identified An understanding of compacts and other performance agreements is demonstrated Shareholders (the government as shareholder) Public sector accountability mechanisms The complexity of interdepartmental relationships and interactions is identified and evaluated The role of the oversight structures such as the Auditor General and National Treasury and the Public Protector, is explained An understanding of the role of commissions of enquiry is demonstrated An understanding of the role of an ombudsman is demonstrated Other commissions are identified and their work is explained An understanding of records and reporting in terms of relevant legislation is demonstrated [Range: PFMA; MFMA] An understanding of supply chain management is demonstrated [Range: PFMA; MFMA] ---ooo---