When we normalise abnormality in state-owned companies, we run the risk of never achieving transformation goals

Sita CEO Bongani Mabaso has resigned. Photo: YouTube

Sita CEO Bongani Mabaso has resigned. Photo: YouTube

Published Dec 11, 2023


Seeing the headline last week, “Sita CEO Bongani Mabaso quits after just nine months”, made some of us put our faces in our hands because yet another well-meaning professional, who heeded the “Thuma Mina” call to help government turn around an ailing agency, has been left with egg on his face.

Mabaso joined the State Information Technology Agency (Sita) on April 1, having moved over from the private sector where he held various senior IT roles. According to the news website TechCentral, as recently as September, Mabaso was up-beat and excited about the impact he could make, and “bullish about turning around the agency”.

Less than three months later, he submits his resignation, citing a desire to pursue interests elsewhere that are aligned with his career direction and growth. Mabaso was brought in to head the agency after years of it not having a CEO.

This headline and story have become all too common and normalised in our beloved country. Black professionals with good intentions who respond to calls to serve the country by joining state-owned entities are almost guaranteed to be pushed out in no time by politics, leaving SOEs in a continuous state of flux, and the careers and mental health of these professionals dented.

According to the Organisation for Economic Co-operation and Development, SOEs around the world are growing in importance, with around a fourth of the largest global companies either entirely or largely owned by the state. Their role in driving broad development is unquestionable, and the ultimate beneficiary owners are the population at large.

Arguably, this means the state officials assigned to provide oversight are subject to obligations to the public that are the same as those fiduciary duties that boards and management owe to their shareholders. Political heads must account to the public.

They must ensure the financial and non-financial character of their portfolio of SOEs serves not only long-term profit maximisation, but also the attainment of widely-held policy priorities. In our context, transformation is a widely-held policy priority that must be achieved. When used appropriately, SOEs have the potential to promote peace and stability in a country. Yet, in our context, more often than not we see instability, political interference and infighting at our SOEs. We have normalised this abnormality.

The SOEs Denel and Eskom announced the appointment of their CEOs last week. Tsepo Monaheng was appointed CEO of Denel, over three years since the organisation had a CEO. Public Enterprises Minister Pravin Gordhan said the appointment underscored government’s commitment to reposition and put Denel on a firm, strategic path.

Dan Marokane, a chemical engineer with more than 20 years senior leadership experience and a reputation for working in distressed organisations and turning them around, was appointed CEO of Eskom.

Both these chief executives are no stranger to the organisations they are now leading, having worked there previously. Their appointments are supposed to be great news, especially for Eskom, which has been unstable and costing the country dearly.

Yet, we watch with fear and wonder how long they will last before reports of infighting and political interference are shared. This has become the normal state of affairs at SOEs, with the associated harm it inflicts on professionals’ careers, and the resultant delays to the transformation agenda.

This state of affairs doesn’t have to be our normal though. With proper governance and accountability, SOEs can be well run, with tangible success.

There is a formula for getting SOEs working effectively, which, if followed, can bring peace and stability. This formula includes the following.

Ensure separation between the ownership and management functions of SOEs, with clear separation lines between the shareholder, board and management.

Develop clear and quantifiable short and long-term goals, and appoint a self-directed management team to strategise how to achieve these goals. Management must put in place transparent and independent monitoring and evaluation mechanisms to share regular performance reports with all key stakeholders.

And lastly, attract competent and talented individuals to join the ranks with competitive salaries, empower them to do the job and reward them for improved performance.

SOEs often drive the country’s mega-infrastructure projects and remain a critical source of employment and economic growth. They are central to our transformation agenda. Therefore, we must remain hopeful and work hard at normalising their success.

Sibongile Vilakazi is president of the Black Management Forum.

Dr Sibongile Vilakazi is president of the Black Management Forum.