Government has much to prove with top appointments
Does SA have a CEO problem? We have the ones who refuse to leave. There are the ones who refuse to stay. And then there are those who refuse to join — or haven’t been hired at all. If there is a common thread, it is about the breakdown in the constructive dynamic that is meant to prevail in the boardroom between board and CEO. It’s about a failure to be clear about the respective roles and responsibilities of the CEO, the board and (in the public sector) the shareholder. Sometimes it is about a hire that was inappropriate in the first place, reflecting a board’s lack of integrity — or simply of expertise. It is, in other words, a broader governance problem, one making for much drama and dysfunction. The Peter Moyo-Trevor Manuel drama is the latest instance of bizarre boardroom dysfunction. It continues to baffle corporate SA and erode the reputations of all concerned. This time, it’s the private sector, but public sector examples abound, though in those cases (Molefe, Moyane, Gama) it’s been a case of CEOs implicated in state capture battling their dismissals. In the public sector, too, we’ve had the drama of CEOs who refused to stay, at Eskom, South African Airways and the Post Office, all in one way or another because of differences with the board and an over-intrusive shareholder.
The state-owned companies they ran have joined the list of public entities without permanent CEOs. Currently, almost every one of SA’s state-owned companies has an acting CEO. In some cases, the entire top layer of leadership is acting, and has been for some time. Eskom and SAA come to mind; so, too, do Transnet and Airports Company SA.
These are companies that matter a great deal to SA’s economy and its public finances. All were captured and corrupted in the Zuma era, and the damage runs deep. But no acting CEO has the kind of clout needed to tackle that aggressively, and while Cyril Ramaphosa’s administration has done much to get rid of the bad people, it has yet to make the decisions or create the space to hire and keep good, capable, suitably experienced and independent-minded people who can undo the damage.
Nor has it even come up with a clear mandate for the boards and executives of companies such as Eskom, most notably, where the long-promised policy paper about the future of the power utility has yet to materialise. It didn’t make it to this week’s cabinet meeting; nor did long-awaited decisions on the future of the state-owned airlines.
One question is clearly whether the government and the boards are genuinely willing to hire the best, as they claim. Another is whether the government and the boards are determined to work with whoever they appoint and allow them to deliver on their mandates — without folding at the first sign of pushback from labour or any other vested interests. Anyone taking the top job at Eskom, for example, should demand support for that, in writing, from the president and relevant ministers.
The Black Management Forum earlier this year called on black executives not to apply for senior appointments at state-owned companies until the government developed a clear governance framework that also outlined the role of the minister and prevented political interference. The same might very well apply for executives of any other colour or nationality — and foreign is a possibility, with public enterprises minister Pravin Gordhan conceding it may be necessary in the short term to import.
Following interviews for the Eskom CEO post last week, there is now a ranked shortlist of three candidates (down from 300 applicants) which will go to the board and minister. The Transnet appointment is also said to be imminent. Who is chosen will be one test of whether the government is serious about turning around the state-owned enterprises. The boardroom dynamics will be the other.
Are SOEs genuinely willing to hire the best, as they claim?