28 Jan

State Owned Enterprises, who should run them? - COETSA PART 3

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This blog forms part of our Convention for the Economic Transformation of South Africa (COETSA) series where we look at various initiatives that are designed to transform our economy.


State Owned Enterprises (SOE’s) such as Sentech, Eskom and Telkom are critical to our economy and it does not make sense for a government to be able to decide by itself who should be running such critical organisations. We have seen in our own context that placing people into positions that are not suitable can have a disastrous effect on our economy. Ultimately, the poor suffer. Not having enough power has affected the manufacturing sector, slowing our economic growth and resulting in retrenchments. Furthermore, the load shedding activity has affected, in particular, small and medium enterprises (SME). Our economy should be structured to assist SMEs, not hinder them. SME development will result in a dramatic reduction in our unemployment rate.


Board of Directors and senior managers of SOEs should be selected through a panel. This panel should have representation from organisations and individuals that have a direct bearing on the effectiveness of the economy. Therefore this panel should be represented by:


  • Government;
  • Captains of Industry (Through organised bodies);
  • Representative bodies of SMEs;
  • Panel of Economists.


The panel should have a secretariat that will scrutinise applicants. Applicant’s qualifications would be carefully investigated. Furthermore the secretariat would disqualify any applicant that has a relationship with any member of government above and including the level of senior manager. The secretariat must have investigative capabilities and proper investigation on all aspects of the CV should to be conducted before a candidate is put forward to the panel. Any incorrect information would result in automatic rejection of the applicant. Nepotism will also be completely eliminated.


The secretariat would be given clear briefs for the type of applicant required. For instance, the COO of Eskom would be required to be a qualified engineer; the CFO should be a qualified accountant and so on. Therefore someone with a beautician diploma will not be put forward as the financial controller of the SABC. 


The secretariat would be funded by business and the officers of the secretariat would be appointed by the panel.  The workings of the panel and secretariat would be enshrined in our constitution which can only be changed by a 80% vote in parliament. 


The above are suggestions and we are sure that people will have various opinions, but the message is clear, we cannot continue on the same basis. COETSA will bring the role players around the table and negotiate the detail .Things need to change for the sake of our rainbow nation. 


Also in this series:


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