Johannesburg -
New legislation aimed at strengthening governance to ensure that all state-owned enterprises (SOEs) function more effectively and efficiently is on the cards, according to the Minister of Public Enterprises, Lynne Brown.
Brown said the planned legislation, expected by year-end, was necessary because the regime currently driving the enterprises needed to be reviewed, so that functions, operations and governance apply uniformly to all the entities.
“We need an act that governs all the external and internal issues as also the culture of all state-owned corporations,” Brown stated.
She and other ministers would shortly make recommendations and appoint an independent technical team which will draft a White Paper, from which the new law governing the functions, operations and governance of State-owned corporations would be developed.
In addition to the mooted legislation, Brown said the enterprises, including Eskom, Denel, Safcol, South African Airways and Transnet, would also sign shareholder contracts with ‘consequence management clauses’ by year-end.
Currently, State-owned enterprises are regulated by the Public Finance Management Act, the Companies Act and individual memorandums with the government.
Brown feels that the SOEs, in order to function optimally, need “the right combination of people who know what their mandate is, stand for good, clean governance and who can lead companies”.
A cursory glance at these entities, collectively worth hundreds of billions of rand, reveal a mixed basket of success, progress and crisis, with Eskom, the entity charged with the nation’s power supply, caught in the proverbial eye of the storm.
The power supply company has experienced extreme turbulence over the past few years with interrupted supply, and most recently the suspension of four top executive and the resignation of its board chairman Zola Tsotsi.
Brown told The Sunday Independent she had full confidence in the board, which was “relatively united” and did not see the need to descend into the arena and fiddle in matters that were internal to the company.
“My role, as the shareholder, is one of oversight, to ensure that the board understands and execute their mandate, which is dealing with an entity that is more than 80 years old, where we will have to deal structurally,” Brown said.
Sunday Independent