Will De Ruyter be allowed to do his job?
By most accounts Eskom CEO designate Andre de Ruyter has what it takes to turn the power utility around, a feat that has eluded many. But will he be allowed to do his job, and what will it take for him to succeed?
Since the announcement of his appointment a fortnight ago, the poor man has endured bad press. Clumsy attempts by the government to subdue the backlash have so far failed to deal with the grievances of the complainants, mainly black professionals, the EFF and the National Union of Metalworkers of SA (Numsa).
At the core of their criticism is the issue of transformation; the advancement of black professionals in key sectors of the economy, especially large corporates, and that the CEOdesignate has no engineering background.
This shouldn’t be a surprise. Twenty-five years into our all-race democracy most top jobs should be in the hands of previously disadvantaged groups. That this isn’t the case is an indictment on the ANC government. Worse, blacks have successfully run large complex organisations such as Eskom before.
Then there is the process bugbear, which has complicated De Ruyter’s life. The emergency departure of Phakamani Hadebe and Vuyani Jarana CEOs of Eskom and SAA, respectively within months of each other raised questions about post-state capture black professionals being frustrated out of their jobs.
As so many other things, government decision-making is criminally tardy. It took months to announce a short-term fiscal bailout plan for distressed stateowned enterprises (SOEs), including large ones such as Eskom. The government is operating as though there is no crisis. The recruitment process for the Eskom CEO was also agonisingly slow, fuelling suspicion of undue political interference.
It is common cause that the EFF is embroiled in a multifaceted war with public enterprises minister Pravin Gordhan. Alongside the cabin crew union, Numsa has just ended a week-long strike at ailing SAA over wages and corruption. The strike was supported by the EFF, which partly explains the current opportunistic alliance at Eskom.
Soon after the departure of Jarana, the Black Management Forum called on all black professionals not to make themselves available for consideration in any of the SOEs until the governance framework, especially the relationship with the political head of the SOE, is clarified. This remains opaque, allowing political agendas to be orchestrated. It is therefore unsurprising that many black professionals declined to be considered for the Eskom job.
At Eskom, the picture is of even greater concern. As in other companies, the board ran a selection process and recommended three names to the government more than a month ago. Then, for reasons only known to itself, the cabinet ran another process, in effect second-guessing the board it had appointed to run Eskom’s affairs.
On November 18 Gordhan issued a statement announcing De Ruyter’s appointment, and then there was this line: “The president appointed a team of cabinet ministers to consider the board’s recommendations. The ministers concurred with the board’s recommendation. Accordingly, I am pleased to announce De Ruyter as the new group CE.”
The question arises: why the need for this new process? What were the ministers assessing? After all, the CEO reports to the board, not politicians. Were they checking for a political fit, and if so, with whom the ANC’s deployment committee?
What would have happened if they had not concurred with the board’s recommendation? Should the board have resigned en masse? Or would they have been expected to work with someone picked for them by the politicians?
This should raise concerns for De Ruyter and anyone interested in the wellbeing and sustainability of Eskom, notably its thousands of employees, who have been guinea pigs in what Sandile Zungu has characterised as an economic experiment.
Curiously, Gordhan’s statement made no mention of the relationship between De Ruyter and the so-called chief restructuring officer (CRO) an appointment to be jointly made by him and finance minister Tito Mboweni. It’s also unclear whether he took the opportunity to ask his political masters about this.
At SAA, according to the job adverts, the CRO will be a de facto group CEO, a recipe for conflict and blurred accountability lines. At Eskom, all that is known is that Freeman Nomvalo, CEO of the SA Institute of Chartered Accountants, has been asked to set up the Eskom CRO office.
With appropriate support and space, De Ruyter can do the job, especially because he believes in the unbundling of Eskom into three subsidiaries (generation, transmission and distribution).
To succeed he needs the following:
A clear plan to smoothly transition Eskom’s employees into a new future;
A strategy of getting the multibillion-rand renewables contracts to contribute their fair share in keeping the lights on;
Publication of his contract of employment so all Eskom stakeholders will know when undue meddling starts.
As a man of prayer, he has this columnist’s prayer.
WHAT DID THE MINISTERS ASSESS? AFTER ALL, THE CEO REPORTS TO THE BOARD, NOT POLITICIANS
● Dludlu, a former Sowetan editor, is executive for strategy and public affairs at the Small
Business Institute.