Bring in professionals

Ayabonga Cawe correctly warns against the privatisation of state-owned enterprises (SOEs) as this will lead to a focus on profits, which will ultimately be funded by the consumer (“Think again about SOEs”, October 27)

The status quo, in which the chairs of SOEs appoint themselves to procurement committees, and boards condone this spectacular breach of governance, is, however, equally unacceptable.

SOE boards should be professionalised and appointed independently of political influence, and the mandate of the board should be to deliver the most cost-effective and efficient services to the public.

Any surpluses generated by SOEs should not go to the fiscus but be reinvested to improve service delivery.

Denmark, the Netherlands, New Zealand and Norway prohibit public servants, including standing and former politicians, from sitting on SOE boards. The Norwegian government explains this is to “avoid problems of partiality and conflicts of interest, which could arise when the interests of the shareholder are not fully in harmony with the interests of the state”.

Bertrand Badré, co-chair of the Global Future Council on International Governance and PublicPrivate Co-operation, which is tasked with bringing governments and business together to achieve the UN’s 2030 sustainable development goals, commented that in most countries “public authorities think the private sector is willing to reap the reward without taking any risk”, while “the private sector believes that the public sector is, in the worst case, corrupt; or is too bureaucratic, too slow, or not reactive enough”.

The state needs the private sector to put the SOEs back on a sustainable footing, and the private sector needs the SOEs to be sustainable.

In exchange for funding, agreement needs to be reached between the state and the private sector on the mandate, board make-up, board appointments and powers of each SOE.

Andrew McGregor Dunkeld West