SAA’s needs belong at top of Myeni’s agenda
IMAGINE being on board SA375 from OR Tambo to Cape Town late one night and a voice comes over the speaker: “Ladies and gentlemen, this is your captain speaking. We’ve just reached cruising altitude. I’ve just been informed that I have passed my expiry date, so I will be vacating the pilot’s seat. Gerald in 3A, who last week went solo for the first time at 43 Air School in Port Alfred, will take over. Please enjoy your flight.”
When it comes to flying, it’s always nice to hear the dulcet tones of the pilot welcoming you on board. You want the calm reassurance that they are not the sort of person who is likely to lock their co-pilot out of the cockpit and point the nose of the aircraft directly down at the ground. Yet that is what is happening in the SAA boardroom. And it’s because the government-appointed chairperson is putting interests other than those of the airline first.
It’s been a while since our last Sunday morning snap quiz. Name the CEO of SAA. Come on! Quickly!
Let me help. Siza Mzimela? Nope. Vuyisile Kona? Nah. Nico Bezuidenhout? Nyet. Monwabisi Kalawe? Negative. You sure it’s not Nico Bezuidenhout? Thuli Mpshe! No. That was last week. At the time of writing — and there is no guarantee that it will still be the case when you read this — the new acting CEO is Musa Zwane, head of SAA Technical. All of the others have been either CEO or acting CEO — in the case of Bezuidenhout twice in the past three years. Seven CEOs in three years — the tenure of chairperson Dudu Myeni.
Quizzed after her appearance before parliament’s portfolio committee on finance, Myeni claimed she was being victimised for trying to change the way the airline does business.
While corporate South Africa is scrambling to meet the requirements of the Department of Trade and Industry’s broad-based black economic empowerment codes to qualify to do business with the government, just 4% of state-owned SAA’s annual R24-billion procurement comes from suppliers that are at least 50% black-owned. Myeni is on a single-minded mission to change this and says her desire to do so is ruffling feathers across the organisation. “I am doing it for South Africa and I am not interested in anything else; all I am interested in is making it better for someone else who has been excluded from the economic mainstream,” Myeni told EWN.
There you have it. The chair of SAA sees it as a vehicle for driving economic transformation.
It may be a noble goal, but if it is at the expense of SAA itself it raises serious questions. It also provides clues into the controversy around her insisting that a contract for new Airbus aircraft, which would have saved the airline R1.5-billion, be renegotiated to include a domestic middleman. The move, apparently to reduce currency risk, is dismissed as spurious by industry experts.
The only thing SAA seems more adept at losing faster than executives is money: R648-million in the past financial year.
Its corporate governance is in a mess. Global governance standards stipulate that the role of the chair is to manage and provide leadership to the board of directors of the company. The chair is accountable to the board and acts as a direct liaison between the board and management, through the CEO. At least that is the way it should work — but Myeni is treating SAA as a vehicle for economic transformation.
The King code on corporate governance reads: “The board and its directors should act in the best interests of the company. This means that directors must adhere to the legal standards of conduct but also that real or perceived conflicts of interest should be disclosed to the board and managed.”
Myeni said: “All along things were quite smooth and now that we are talking about transformation, I am being attacked. Maybe it is because I am black, maybe it is because I am a woman.”
The SAA’s (mostly white) pilots’ association this week took the unusual step of taking a vote of noconfidence in Myeni and her fellow non-executive directors amid concerns about the precarious financial situation of the airline, the Airbus deal renegotiation and worries that the board was in breach of legislation around the airline.
Perhaps the turbulence around SAA would settle if its needs were put ahead of any other agenda.
Whitfield is Sanlam Financial Journalist of the Year