What value do we get from heads of SOES?

SOUTH African state- owned entities ( SOES) are in a weak financial position, and this is a concern, as some of the entities are critical to the country’s economic growth objectives.

The vulnerable financial position of some of these entities poses a critical risk to the government.

These entities’ weak financial performance has resulted in numerous calls to review the salaries of their heads.

The biggest question is whether we are currently getting any value from people who lead these institutions.

When considering that some of these entities are in a weak financial position and are continuously asking for a government bailout, this raises another question about the entities’ performance.

If it was a private listed company, will the shareholders approve paying high salaries to those underperforming company heads or directors?

Recently, the minister of finance raised this vital question: “Is the high pay justifiable for the heads of the state- owned entities?”

I would think that is a difficult question to answer, especially when considering the salaries currently paid to these directors.

To answer the above question, it is crucial to understand that the SOES are established for various reasons.

Some of these state- owned entities are established for profit and others not for profit.

The remuneration, measurement and recognition tools will not be the same, in my view.

Though those entities were established with the profit objective in mind, the remuneration and performance measures for their heads should be closely aligned to the private sector.

The motivating reason will be that those individuals will typically be the same talent that the private sector is keen on poaching.

In my view, an important question to ask these days is what value do we get as a society from those appointed to head those entities?

NYANISO QWESHA | Wynberg