A good starting point would be the formation of strong and independent governance structures and ending cadre deployment
There’s an old joke about a boy who is asked by his mother how his day at school went. The boy said every child in his class was asked to tell a story about his father and what work he does. The mother then asked the child: “So what did you say dad does?” He replied: “I said he is a stripper at a nightclub.” In shock, the mother asked why he had lied. He replied that he did not feel he could tell his classmates dad worked for a state-owned enterprise .
While we agree with the president that a nomination or deployment committee should be established, this function does not necessarily have to reside with the governing party. The net negative effect of this process is that the party can nominate its own people, and the country is consequently deprived of the best possible candidates to serve on boards of SOEs. A legitimate appointment process will require far more accountability and transparency than the current practice.
The Organisation for Economic Co-operation & Development guidelines on corporate governance of SOEs recommends that board members should not have any existing ties to the highest levels of government and should be appointed on professional merit. The starting point for such nominations is to apply the precedents set with the recent transparent appointment processes applied to key functionaries — the Financial Sector Conduct Authority commissioner, the head of the National Prosecuting Authority, the SA Revenue Service commissioner, and the chief justice.
According to the OECD, standard practice is to use private sector guidelines when selecting board candidates. This applies particularly to commercial SOEs such as Eskom, Transnet and the Passenger Rail Agency SA. The OECD further recommends that SOEs follow the same practice followed by several listed companies, which entails having external nomination committees advising their annual general meetings. These committees may comprise both civil servants and private sector representatives.
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