SOE MOVES ARE WELCOMED

THE INSTITUTE of Directors in Southern African (Iodsa) has welcomed the government’s commitment to improve governance, strengthen leadership and restore stability in strategic state-owned enterprises (SOEs). President Cyril Ramaphosa said in his 2019 State of the Nation Address that the government is taking measures where mismanagement and corruption have undermined the effectiveness of these enterprises. This included the appointment of new boards with “credible, appropriately experienced and ethical directors”. Parmi Natesan, the chief executive elect of the IODSA, said they had consistently highlighted the need for the appointment of skilled individuals to boards and thorough due diligences on those appointments. “Board appointments in the public sector specifically should be based on expertise, experience and integrity and not, by implication, on political connections.” Natesan said the value of regular and independent evaluations of board performances, as recommended in King IV, should not be underestimated. Some boards may choose to “self-evaluate” their performance. However, getting an experienced third party to facilitate the performance evaluations would ensure franker and more open feedback, she said. If boards were to be accountable for the performance of the SOE, then they had to have the freedom to exercise their collective judgment in its best long-term interests, said Natesan. I Staff Reporter