In detailing some of the crimes and misdemeanours that enabled state capture, the Zondo Commission’s report is in fact offering office-bearers across business and society a morality tale, according to the Institute of Directors in South Africa (IoDSA).
In this spirit, the assesscment of the performance of the erstwhile chair of South African Airways, Dudu Myeni, acts as a case study of how important the role of the board hair is, and how not to do the job, argues Parmi Natesan, CEO of IoDSA.
“Myeni’s tenure as chair of SAA should be seen as an object lesson that all current and future board chairs should take to heart,” she says. “The one constructive thing that can come out of this shameful episode in corporate life is to understand how things can go so wrong.”
Natesan says that key lessons can be drawn from the Zondo Commission’s report on Myeni’s tenure as chair:
Criteria and process are critical for the appointment of leadership positions on boards. The report states that Myeni was appointed as chair despite being an underperforming director. All board members, and particularly the chair, need to be appointed in terms of rigorous criteria.
“The IoDSA maintains that the primary role of the chair is to lead the board and set its tone, which in turn sets the tone for the whole organisation,” she notes. “Political connections are wholly irrelevant when it comes to ascertaining an individual’s fitness to serve in this critical leadership position.
“It’s clear that SAA suffered from the same problem as other state-owned enterprises–undue political interference not only in the appointment of senior leaders but also in bypassing basic governance such as, in this case, holding the chair to account.”
As the report makes clear, there were several attempts by the board to seek redress on Myeni’s performance, but they came to nothing because she was protected by the political establishment.
The chair must have the respect of the rest of the board. Without a proper voting process, it is unlikely that the chair would have the board’s respect and support, and he or she would thus be ineffective as a leader.
As the report makes clear, Myeni ruled by creating a climate of fear and suspicion that discouraged other board members and executives from raising the alarm. In such a case, clearly, the board was effectively dysfunctional and thus wrong decisions were repeatedly taken.
Chairs must understand and fulfil their role. The report makes the point that Myeni overstepped her mandate as chair. In particular, she made a “series of operational choices at SAA that saw it decline into a shambolic state”.
The first point to make is that boards, and their chairs particularly, are not supposed to involve themselves in operational matters, which are the preserve of management. The chair’s role is strategic, and primarily involves ensuring that the board functions optimally in fulfilling its oversight role.
“This section of the Zondo Commission Report graphically illustrates how important the chair is as the apex of governance within any organisation, and thus how destructive an ineffective or downright malign chair can be,” Natesan concludes.