Public Enterprises on appointment of new Transnet CEO

21 January 2020

Transnet SOC Ltd. has the important responsibility to make the country commercially competitive by providing and maintaining key economic infrastructure through our ports, rail and pipeline networks that facilitate the movement of goods from where they are produced.

The Transnet Board is responsible for strengthening the Company, restoring its integrity and reputation and refocusing Transnet on its core mandate.

The Ministry of Public Enterprises has received numerous enquiries from the media about the process to appoint a new Group CEO for Transnet. Several of these enquiries appear to rely on rumour, gossip, concocted narratives and aspects of confidential information, leaked from Board meetings, usually from unidentified ‘sources’.

Information from anonymous ‘sources’ usually seek to promote one purported candidate above another, make any number allegations of unwarranted Ministerial or Board interference and essentially questions the integrity and bona fides of Transnet Board’s process to recruit a suitably qualified candidate for the GCEO position.

The Facts

The appointment process to appoint a Chief Executive Officer for a State Owned Companies (“SOC”) is governed by the Memorandum of Incorporation (“MOI”) and the Guidelines for the Appointment of Chief Executive Officers of State Owned Enterprises (“CEO Guidelines”).

The process entails the following:

Prior to commencing the recruitment process, the Board must submit to the Minister a description of the key specifications for the position as well as the selection criteria for Ministerial consideration.

 The Board must ensure that the specifications are informed by the SOE specific mandate, challenges, requirements and Government’s strategic objectives.

The Board identifies, nominates and evaluates potential candidates for appointment as CEO.

After completing the recruitment process, the Board submits shortlisted candidates and a preferred candidate to the Minister for further assessments and an interview by the Minister, if (s)he deems it necessary.

The Minister may approve, disapprove and/or express an opinion on the shortlisted candidates.

If the Minister approves the shortlist, (s)he can submit the recommendation to Cabinet, prior to the Board appointing a candidate as CEO.

With respect to Transnet, the Board followed due process for the recruitment of the GCEO.

It instituted a two-pronged process and widened the search to attract the most proficient candidates for evaluation. The Board made a recommendation of the preferred candidate to the Minister for his consideration. The Minister is still taking the matter through Government’s processes and will make an announcement when a final decision is arrived at.

Transnet requires a strong GCEO who will provide leadership and revive an SOC that has been plagued by state capture and corruption.

The conduct of the Transnet Board in the recruitment process for a new GCEO has been impeccable with respect to applying sound corporate governance standards and Transnet directors must be commended for that.

The allegations contained in several media enquiries to the Ministry since the end of 2019 are an attempt to disrupt or discredit the process of appointing a new GCEO – without credible facts - who must command the required skills and the commitment to work with the Board to root out corruption and malfeasance at Transnet.

Issued by Sam Mkokeli on behalf of Department of Public Enterprises, 21 January 2020