When your SOCs don't match, FINANCIAL MAIL
We have recently I had the spectacle of the SA Airways board, where, apart from other chronic malfunctions, the chair refused to obey her minister's instruction to reinstate the suspended CEO. Then, this week, we heard that the chairman of Eskom complained to the minister that some of his directors were defying his authority, having met without him. There are dark rumours that the boards of all SOCs are up for “review”, with the minister as absolute as Robespierre in supervising the guillotine. The antics and styles of the personalities involved are inevitably of interest, but they distract us from the real problem: the structure. In the private sector, boards of directors are appointed (according to the guidance of the King governance reports) to act in the best interests of the company, with responsibilities extending to shareholders and other stakeholders — “companies should be headed by a board that should direct, govern and be in effective control of the company”. This is patently not the case at SOCs.