WHEN Jabu Mabuza announced his resignation as Eskom board chair, President Ramaphosa’s spokesperson, Khusela Diko, said government would “soon announce a reconfigured Eskom board with the appropriate mix of electricity industry, engineering and corporate governance experience”.
Commenting on this statement, Parmi Natesan, CEO of the Institute of Directors in South Africa (IoDSA) said that this opportunity must not be wasted.
“The IoDSA has repeatedly warned that government must ensure that state-owned entities have boards with the right mix of skills to fulfil their mandates. One of the critical factors in the performance of our SOEs is the appointment of board members who have the necessary director competencies,” she said.
“At the same time, it’s important to ensure some continuity so that institutional memory is not lost.”
It is thus critical that the board-nominations process is sound and transparent, and that there is good succession planning.
In a recent paper on the “Challenges facing Public Sector Boards”, the IoDSA tackles this and other issues. The IoDSA argues that government should adhere to governance best practice in appointing board members even if it is not obliged to do so. Best practice as outlined in King IV is for board members to be chosen through a rigorous nominations process that takes into account the skills and competencies the board requires.
“Even if it is not compelled to follow best practice, the IoDSA is adamant that it makes good sense for government to work closely with the board and specialist professionals to ensure that the individuals appointed have the skills that the board needs. These would include people skills, governance skills and sector-specific skills,” she said.
“Government should resist the temptation to select the new board members on its own—proper consultation with informed people will help ensure the right people are chosen and begin rebuilding public trust in the organisation.”