South Africa's Deputy President, Cyril Ramaphosa, has announced the appointment of new board members at the state-owned power utility, Eskom, as an immediate measure to strengthen governance and management at the parastatal.
In addition, Ramaphosa directed the board to appoint a permanent Group Chief Executive and Group Chief Financial Officer within the next three months.
New Eskom Board
“The company has been facing several challenges, including a weak financial position, declining revenues and governance failures, which are threatening the sustainability of the company going forward," explained a statement released on Saturday.
“As a result, government has decided on the following immediate measures to strengthen governance and management. This is the first step towards restoring confidence in the company, improving its financial position and restoring its operational performance."
The new board will consist of:
- Jabu Mabuza as Chairperson (Current chair of Telkom)
- Sifiso Dabengwa (Former MTN CEO)
- Sindi Mabaso-Koyana (Director at Toyota South Africa)
- Mark Lamberti (Founder of Massmart Holdings)
- Professor Tshepo Mongalo (associate professor of Commercial Law at Wits University)
- Professor Malegapuru Makgoba (Health Ombudsman and academic)
- Busisiwe Mavuso (COO of Business Leadership South Africa (BLSA) )
- Nelisiwe Magubane (served as the director-general of the Department of Energy)
- Dr Rod Crompton (served as a regulator member of Petroleum at Nersa for 11 years)
- George Sebulela (was Head of Government, Empowerment and Public Infrastructure Finance, ABSA Capital for 4 years until 2009)
- Dr Pulane Molokwane (a nuclear physicist and environmental specialist)
- Dr Banothile Makhubela (an independent non-executive director at Eskom)
- Jacky Molisane (a deputy director-general at the department of Public Enterprise)
According to the South African Government News Agency, government has recommended the appointment of Phakamani Hadebe as the Acting Group Chief Executive with immediate effect.
The statement said that the board is directed to immediately remove all Eskom executives who are facing allegations of serious corruption and other acts of impropriety, including Matshela Koko and Anoj Singh.
— Karyn Maughan (@karynmaughan) January 21, 2018
“Government further calls on all Eskom employees and other stakeholders who may have evidence of wrongdoing to bring this to the attention of law enforcement agencies so that culprits can be brought to book,” said the Presidency.
It said Eskom is critical to the South African economy.
“As a key enabler of economic growth and social transformation, any further deterioration of Eskom’s financial and operational conditions could have a severe impact on the country,” said the Presidency.
Deputy President Cyril Ramaphosa, who is Chair of the Inter-Ministerial Committee on State-Owned Enterprises Reform, said: “We are confident this intervention will restore the important contribution Eskom makes to our economy. We are determined to address the damage that has been done to this institution and place it on a new path of efficiency and integrity.
“Government calls on all stakeholders, employees, suppliers and members of the public to work together to ensure that these measures are successful. For South Africa to flourish, Eskom must work and work well,” he said.
“Government will continue to act decisively to address challenges at key state owned enterprises to restore public and investor confidence and to ensure that they fulfil their economic and developmental mandates,” it said.
On 19 January 2018, over 200 senior Eskom management sent a plea to Ramaphosa to appoint a Board that will restore the parastatal's credibility and reputation. Read the memorandum here.
Confidence in the Board selection
The South African Chamber Commerce and Industry (SACCI) welcomes the appointment of the new board of Eskom.
“We hope that under the chairmanship of Jabu Mabuza, the new board will get on with the urgent mammoth task of stabilising Eskom and fixing its governance structures and processes to stabilise the corporation.”
Eskom has big challenges with its mega capital projects and ability to trade out of the difficult financial and operational challenges it faces.
Former finance minister, Nhlanhla Nene, was highlighted as a potential prospect for the Group CEO position, however he reportedly declined due a conflict of interest with one of his private sector employers.
#Eskom Former Finance Minister Nhlanhla Nene tells eNCA that he declined the Eskom board chair offer because of potential conflict of interest with one of his private sector employers.@eNCA pic.twitter.com/kMnboOsNmY
— Siphamandla Goge (@SiphamandlaGoge) January 21, 2018
The Eskom board is in the process of identifying a suitable candidate to fill up the position of Group CEO.
SACCI added: “At this time the board has an opportunity not to compromise on a suitable candidate with competence, experience, and a performance track-record and leadership capabilities.
“We encourage the board to look for and find the best talent locally or abroad. Eskom’s challenges require this aspect to be taken very seriously and diligently.”
Featured image: Photographer: Dean Hutton/Bloomberg