South Africa’s failing SOEs are unlikely to become efficient, productive and have any developmental impact, unless they are held as accountable to the public as listed companies are to their shareholders.
Ordinary citizens, consumers and civil society must play more active roles as shareholders of state-owned enterprises than is currently the case, as activist shareholders in private companies do, to hold these entities accountable.
It must become mandatory for SOEs to open their AGMs to ordinary citizens, consumers and civil society. Consumers, stakeholders and activists could challenge company strategy, ask questions about activities, and hold boards and management accountable at the AGMs. SOE executives and boards receive huge remuneration packages and annual bonuses, yet these entities are loss-making, fail to deliver services and are frequently bailed out with public funds. The excessive remuneration of executives and board members of failing state-owned entities has not only given the managers in these organisations no incentives to become efficient, honest, and accountable, but has added to the ballooning public debt burden.
Most SOE boards lack industry-appropriate skills, professionals, and demographic diversity. Politically exposed individuals are recycled from board to board, bringing failure to every board they are appointed to. There also must be regular assessment of the performance of SOE board members – and these must be made publicly available. Civil society organisations should insist on regular lifestyle audits for SOE board members.
Citizens, civil society and the media must work to get corrupt companies blacklisted from tendering for government services. There have been several successful court applications, of failing bidders challenging corrupt SOE tenders and having these awards set aside. Citizen, civil society and users or consumers should also take SOEs to court when they see that incompetent companies have been fraudulently awarded tenders to provide services and products.
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