As the Zondo Reports so graphically demonstrate, South Africa’s state-owned enterprises (SOEs) are in a truly lamentable state, with dire consequences for the economy and thus our country’s capacity to deliver reliable services to citizens, to create jobs and build a better life for all.
“Reading the recently-released Zondo Reports, it is clear that the rot comes from the top—the IoDSA urges the President to provide the courageous leadership the circumstances demand and set a new course, in which board and senior executive appointments will be guided by objective processes and criteria based on competence and an ethical commitment to the organisation’s best interests,” says Parmi Natesan, CEO of the Institute of Directors in South Africa (IoDSA).
“We are surely at or close to ground zero when it comes to rescuing our SOEs. The last SONA made no mention of the need to appoint the right people to the boards of SOEs, though previous ones highlighted this important issue. The president has to act now, or it may be too late.”
The first two parts of the Zondo Commission’s report have caused a major upset because they have laid bare in clinical detail the extent to which the long-term sustainability of vital SOEs has been compromised. As the reports make clear, the damage has largely been done by incompetent or dishonest board members and senior executives, and overly prescriptive ministers.
“There’s no getting away from it: the parlous state of our SOEs is a direct consequence of the breakdown of good governance,” she argues. “While there’s no easy way out, fixing the governance at our SOEs is an essential first step.
“In his 2020 State of the Nation Address (SONA), the President spoke about the need to stabilise the SOEs and yet chose not to address the vital leadership issue, which may be one of the reasons why we are still where we are today.
“He must not shirk his clear duty this time around, and civil society needs to unite to put pressure on Government to take the necessary steps to restore good governance at the SOEs. A first step must be a commitment to abide by the principles of King IV when it comes to appointing board members and senior executives.”