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Best practices from top performing SETAs: THE FUNDAMENTAL PILLARS
Established in 2000 as a requirement of the Skills Development Act, the sector education training authorities (SETAs) – presently 21 in total - were founded to oversee, regulate and offer relevant skills training in all aspects of South African industry. Their effectiveness has been varied – to say the least – and the SETAs in general are not usually associated with best practice. Minister of Higher Education and Training, Dr Blade Nzimande is on record for saying that he has not seen or felt the impact of the R37,5 billion ploughed into SETAs over the past 12 years. In a similar vein, The Green Paper on Post-School Education and Training released in January 2012 describes SETA performance as “patchy and, in most cases, has not met expectations.”
While this may be true in some instances, we must acknowledge that certain SETAs have consistently performed to high standards. Those SETAs serious about their performance have typically embraced best practices. Admittedly, SETAs are differentiated from most other organisations in that they do not need to deliver exceptional bottom-line results, nor do they operate within a highly competitive environment. Nevertheless, they are required to perform and are benchmarked in terms of delivery against the National Skills Development Strategy lll (NSDS III), corporate governance guidelines, disbursement of their funding and clean annual audits.
Over the past 12 years numerous best practices have emerged within the SETA environment. If embraced across all SETAs, their overall delivery would improve exponentially. SETAs could then become the bastions of best practice within their industry sectors and South Africa's public sector.
We applaud Minister Nzimande for implementing several best practices in the Seta environment, including the standardisation of SETA constitutions, the appointment of independent chairpersons, instituting a standard remuneration rate for all board members, and ensuring that SETA board and management members do not participate in tender processes in which they may have business interests.
These measures strengthened corporate governance in the SETA environment, which was further stiffened by the passing of the Skills Development Amendment Act 2012 that regulates the composition of an accounting authority for each SETA, including the eligibility to become members of these accounting authorities. These measures are designed to align SETA governance and delivery with international best practices.
What exactly is ‘best practice'? I understand ‘best practice' to refer to those practices that are internationally accepted as the best in a particular business, industry or field. With the London Olympic Games 2012 top of mind, a useful analogy would be to equate these practices to ‘gold medalists'. In other words, in the South African context, a Penny Heyns or a Josiah Thugwane.
In our SETA we have established several pillars for building a best practice organisation within a SETA environment. These include good research, close alignment with the needs of various stakeholder groupings, devising the appropriate strategy, strong leadership, customer-centricity, the ability to innovate, and an unwavering commitment to good corporate governance.
Solid research is a fundamental pillar of best practice within the SETA environment. A best practice research cycle within a SETA requires it to thoroughly investigate what is happening within its broader operating environment and the specific sector that it serves. These include national imperatives such as the Human Resource Development Strategy (HRDS), NSDS III, Industrial Policy Action Plan (IPAP). Informed by these imperatives, the SETA's Board and senior management team should then craft its business strategy to enable the SETA to deliver quality services for sector needs and national imperatives.
Best practice also requires SETAs to identify the stakeholder groupings that they serve. The best practice for stakeholder identification is to include anyone potentially impacted upon by SETA operations, those who have an interest in what the SETA does, and parties that influence the SETA in meeting its objectives. The next step is to properly align the SETA with the needs of its stakeholders, and to align these with each other. The challenge is to align with all stakeholder needs, while delivering against Department of Higher Education and Training (DHET) mandates.
SETAs require visionary Board leadership to drive the Seta's strategic direction, and competent senior management to ensure that the strategy is properly rolled out and implemented.
The importance of good staff cannot be over emphasised. SETA CEOs attest that their employees do not regard their work as mere jobs, but rather as opportunities to make a real difference in South Africa. Here, I am reminded of the words of Starbucks Chairman and CEO, Howard Schultz: “We want passion for our business….workers who can interpret and execute our mission, who want to build a career, not just a temporary job.” These employees are a huge differentiator in SETA performance.
As one would expect, best practice organisations are always customer-centric. Best practice requires SETAs to continuously research and monitor their operating environments to discern trends and possible shifts in customer needs. Gathering timely information enables them to respond efficiently to changing requirements.
SETAs' responses to the Green Paper on Post-School Education and Training released earlier in 2012 are a good barometer for assessing whether or not specific SETAs are indeed best practice organisations. The better managed SETAs are already engaging with possible changes and will be well positioned to strategically respond to the follow-up White Paper on Post-School Education and Training when it is released.
Innovation is another key pillar for any best practice organisation. As Thomas Edison, legendary inventor of the light bulb and the phonograph said: “There's a way to do it better – find it.” A commitment to continually assess what the SETA is doing, and to constantly generate new and better ideas, is a best practice that adds value to meeting stakeholder needs and expectations.
Several best practice innovations have already been introduced in the SETA environment. These include the introduction of lifelong learning interventions, implementing self-assessment mechanisms within Audit Committees, and the funding of development projects and work readiness programmes. These innovations have enabled SETAs to raise the bar in terms of corporate governance and delivering against various national skills development strategies.
Corporate governance is undoubtedly a fundamental pillar of any best practice organisation. Without good corporate governance, the organisation cannot aspire to be a best practice organisation. It is no accident that the identified top-performing SETAs have fully embraced corporate governance, which is a business imperative.
Another best practice is for SETAs to align themselves as closely as possible with the Public Finance Management Act (PFMA), Treasury regulations and the King III code. SETAs that structure their corporate governance in terms of these frameworks establish themselves as leaders in public sector and industry governance.
Another best practice, and one which applies equally to any organisation, is to ensure that it does not place any ethical dilemmas in the way of meeting governance obligations. Top performing SETAs have always conformed to this principle.
How does one ascertain that a SETA is striving to be a best practice organisation? The acid test for any SETA is its response to a key question: ‘Is the SETA meeting the requirements and expectations of its stakeholders?' SETAs can only be classified as best practice organisations if they meet NSDS I and NSDS II targets and deliver against NSDS III. Nevertheless, best practices are not static and will continually evolve. These will always be moving targets that will have to be reviewed time and again. asa
Author: Cherly James, MBA, BCom, B Ed, H Dip Ed, is the CEO of Fasset (the Seta for Finance, Accounting,
Management Consulting and Other Financial Services).
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Nice read, explains a lot. So in a nutshell, you are saying that a voluntary retrenchment is still a retrenchment and the severance received will be taxed as per the R 315K?
- George K - 2013/06/12 11:22:01 AM
Thanks for updates, i hope this will improve our designation in may ways.
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