BMF STATEMENT OF PRINCIPLE ON THE MISALIGNED SOE'S PROGRAMMES TO THE TRANSFORMATION AND DEVELOPMENT AGENDA
It is very mischievous of various the Press reports to trivialise the BMF concerns regarding the debacle at Eskom to simply a race issue. The BMF in its statement specifically attributes the challenges of parastatals to an ideological disconnect between the objectives of the government and that of its parastatals, as vehicles to achieve a developmental state and the serious disregard of corporate governance principles by these boards.
It is interesting but not surprising, the extent to which the current power economic relations and interests will be defended to the extent of creating smokescreens and failing to address the real issues that are anti transformation.
Transformation is not only about race but has a number of indicators. While the BMF is not apologetic about raising issues of race based transformation as it is a constitutional imperative we will defend, this time we concentrated on another transformation indicators, a transformed mindset to achieve the objectives of a developmental state. Yes, the issue of slaughter of black executives will receive attention as it still is being used to ensure that the economic power relations remained skewed in favour of the minority.
The double agenda is shown in various comments by people who are portrayed as corporate governance specialists who ignore the glaring breach of corporate governance by the board, which allowed the confusion in the role of Chairman who is non executive and the CE, and the Chairman performing an executive function by tabling a strategy document. Instead they use the corporate governance card to berate government for doing what any shareholder in private sector would do to protect its interests.
The complicity of ESKOM board in perpetuating that breach by even considering a strategy document from the Chair despite the King Good Corporate governance which clearly separates the role of Chairman and executive and the ESKOM Conversion Act which clearly stipulates that the ESKOM chair will be non executive, cannot be ignored.
If the latest media reports are indeed true, that Mr Mpho Makwana has been charged to run Eskom until both Chair and CE are replaced, which is both performance of oversight and executive roles forbidden in the said Act, I expect the honest South African public to be outraged by this blatant breach of the Act and lawless deed by Eskom board and overwhelmingly call for its resignation. I expect government to take a firm stand against such lawlessness and dismiss the whole board with immediate effect.
The complicity of the board in misinformation regarding the alleged resignation of Maroga which, 7 days after the first announcement of alleged resignation still remains a falsehood and their disregard of labour related resignation procedures of the country, smacks of travesty of justice and disregard of the laws of our country which they are supposed to uphold not only as citizens but most importantly as custodians of corporate governance. We challenged the Eskom board to produce evidence of his resignation. The BMF further stated that if Maroga is no longer the Chief Executive, we will know he has been pushed. If a board cannot adhere to basic corporate governance principles, what good does it do, why should it still be charged with such important responsibility of corporate governance?
To the extent that the board even allowed the Chair and CE to step out to inter alia consider a counter strategy from a non executive instead of discussing , considering and strengthening the CE's strategy to be in line with the shareholder's vision calls into question the competence of the Board in execution of their fiduciary duties and responsibilities.
It is for those reasons that the BMF called and is still calling for the whole board of Eskom to step down as their objectives are not only incongruent to those of state, but it failed to exercise vigilance in corporate governance matters which was the basis for its appointment. The Board of ESKOM is over 60% black so it is inconceivable that racism could have gained so much prominence, but a transformational and developmental mindset is uppermost. We questioned the ESKOM board on its commitment to the objectives of the shareholder and its flagrant disregard of corporate governance.
SOEs are an important transformational vehicle for our country and therefore boards need to be transformed, both in the objectives of achieving a developmental state and of strategic view leading to effective management of these SOEs .
The BMF has never defended mediocrity in management, we are a leadership development organisation hence we put value and prominence to effective leadership. It is for that reason that we place emphasis on performance of our managers and supporting them through development of their managerial capacity.
Certain media is practising not only selective reporting but selective amnesia to the fact that the ESKOM board breached corporate governance principles, and this was the essence of the BMF argument in calling for the board to step down. This is pointed out in the Press release given to media (see here) and could be accessed on the BMF website www.bmfonline.co.za.
In my engagements with Press, I deliberately steered the Press away from the race debate that they seemed to be more occupied with, and highlighted that the problem was bigger than that, constantly reiterating the BMF stance on the ideological disconnect between the shareholder and boards of SOE's and the weak governance of the SOE boards. Neither in my article in the business report of the 4th November 2009 and in the press statement released on the 6th November 2009, did the BMF call for Bobby's resignation based on race, but on lack of role clarity between the Chair and CE which manifested itself in Godsell's breach of corporate governance and his misinformation about Maroga's alleged resignation.
It is therefore interesting to note that certain South African media have chosen to give prominence to the issue of Bobby Godsell's resignation on racial grounds, thereby creating a smokescreen around the real issues stated by the BMF.
The only time when a race issue was raised in relation to Bobby Godsell in response from a direct question from a journalist in the Press conference on whether the BMF says Bobby Godsell is racist.
My response was that we cannot say that he is or he is not. I then further explained that he does exhibit signs of covert racism, inherent subliminally in our country.
On hearing the news of Bobby's resignation, Stephen Grootes from eyewitness news asked whether the BMF was pleased with his resignation. Again my response was that the issue for BMF was not about an individual as this was never a BMF crusade against Bobby as an individual but about principles, which have been breached. I then outlined the issues of principles of SOEs and its strategic direction and governance issues, again calling for the board to step down. I am not surprised this did not come out in his article, as I did not take the race bait he was trying to use.
The BMF will however not be distracted by the "racism" utterances and insinuations made out of the context it has outlined, i.e. of ensuring that there's a strategic and ideological alignment between SoE's and the Government's developmental agenda, and removing mediocre Boards who flout corporate governance at the behest of narrow and personal capital interests.
The BMF will always stick to principles reiterated here, which result in the strategic view and direction of SOEs boards that do not resonate with those of the shareholders.
- SOEs transformation Agenda should reflect a developmental agenda of the state;
- Intolerance to serious breaches of corporate governance in SOE boards ; based on the inability of board to distinguish between executive and non executive authority and responsibilities and basic labour principles.
It is also interesting that the South African media did not capture anywhere, that we have said we will address these issues across the Board, singling out cases like the Siyabonga Gama case at Transnet and the Mathanzima Mweli case in the North West Province , as case in points of a broader focus rather than defense of individuals. Ours is a principle we will entrench on the conscience of the State and its SoE's, that impeding the transformation Agenda and the erosion of Black Managerial leadership in State institutions shall not go unabated. This we shall fight for and achieve in our professional lifetime.
The BMF and other black business formations will keep on engaging the ANC as the leading party in government, and the government, to appraise each other on the progress or lack of it, in attaining fundamental transformation objectives and targets. Within the coalition of pro-transformation professional organizations, we will also challenge ourselves to add-value to the SoE's alignment and capacitation process, by developing workable policy alternatives and improved monitoring systems that Government can use to ensure better delivery by these catalysts of service delivery.
We trust that this engagement would emerge with progressive policies and practical solutions aimed at streamlining SoE's contribution to the objectives of establishing a developmental State.
Statement issued by Tembakazi Mnyaka, Black Management Forum Deputy President, November 12 2009
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