In THE Business Report of November 20, Business Watch quoted new Telkom chairman Jabu Mabuza as saying that “in my mind it was clear that the government set policy while Telkom’s board had the responsibility to drive strategy”. Mabuza’s understanding probably derives from having watched Telkom’s sad history to date. Alas, if that’s what he understands then he’ll get off to a commercially rather bad start.
The organisation’s policy is not for the major shareholder “to set”, especially if the major shareholder is the government, because it does not have the appropriate expertise and experience to devise a policy that has a good chance of achieving commercial success.
In the case of Telkom, a practical policy must be arrived at only after long consultations between board members, top management and highly experienced outside specialists with sound telecoms track records from this and other countries.
Most of Telkom’s troubles so far derive from government apparatchiks imposing interferences that are either impracticable or inappropriate for Telkom’s hi-tech business mission in a ruthlessly competitive environment. Telecoms technology is evolving much too rapidly for bureaucrats and politicians to keep pace with. Mabuza also needs to understand that it is not the board’s function to “drive strategy”.
Driving strategy is a line function. It is up to management to devise and drive strategies to carry out the corporate policies. After appropriate policy elements have been agreed, the board’s proper function is to ensure that management adheres to it, subject to unfolding new market or technical circumstances which may compel occasional policy adjustments.
The board holds only a watching brief, monitoring the progress of strategy through regular reporting from management.
Mabuza (and the government) also must understand that a board of directors should be nominated and elected or appointed to represent the interests of shareholders, approximately in proportion to the size of the various shareholdings.
But that does not entitle a majority shareholder, because of numerical advantage on the board, to appoint mere “ja broers” as directors.
Moreover, if there is a majority shareholder, even if it is the government, it has no right to take over or influence the selection and appointment of directors to represent the minorities. Any moves towards steamrollering such attempts at influence must be guarded against.
Tim Anderson
Newlands, Cape Town
Does report on Eskom include freeloaders?
I refer to the “Bench Mark Returns” article written by Brian Kantor and David Holland, published in Business Report on Monday November 26.
I want to ask them whether their calculations take into account the effect on Eskom of the non-payment for electricity by what seems to be a large army of aberrant users? A number of reports indicate that it is a large sum, and climbing.
Barry Pithey
VIA E-MAIL
Brazil’s chicken quality control is outstanding
In the Business Report article, “Food workers fight ‘dumped’ chicken” on November 29, Gareth Lloyd-Jones, the managing director of Ecowize, “confirms” that chicken is being “dumped into” South Africa, ignoring the fact that the minister of trade and industry has referred the dumping ruling back to the International Trade Administration Commission for its reconsideration.
Furthermore, Lloyd-Jones informs readers that “quality checks on these products were usually not done, posing a health hazard to consumers”.
We are stunned by the recklessness of such statements.
Brazil is renowned globally for the high standard of quality checking of its poultry exports, while South Africa maintains veterinary health checks on all food imports equivalent to the highest standards worldwide, a fact that can easily be verified by the Department of Agriculture, Forestry and Fisheries.
Lloyd-Jones should do some serious research before rushing to the media with unconfirmed, incorrect and inflammatory statements.
David Wolpert, chief executive, Association of Meat Importers and Exporters of SA
Rivonia