The alleged micromanagement by the Eskom board in the running of the power utility will be one of the issues to come under the spotlight at a meeting of parliament’s standing committee of public accounts (Scopa) on Wednesday.
Eskom chairperson Mpho Makwana has other engagements on the day and will not be able to attend but the power utility’s other board members will be in attendance.
Public enterprises minister Pravin Gordhan, invited to answer questions about micromanagement and the identity of a senior politician allegedly involved in corruption, will also not be present as he has embarked on an official trip to China to try to fast-track the delivery of locomotives and spare parts by the state-owned CRRC e-Loco to Transnet. Nondelivery has been a severe constraint on Transnet’s operations.
The board will also be questioned about the extensive corruption at Eskom highlighted by former Eskom CEO André de Ruyter in a February television interview with eNCA presenter Annika Larsen.
Replying to a question by DA MP Alf Lees at a Scopa meeting last week, De Ruyter said Gordhan is known for being involved in operational detail which included speaking to low-ranking employees in the organisation, bypassing senior executives. “It made life as the responsible accounting officer quite difficult,” he said.
He also said the new board was an engaged, activist board that got involved in operational matters which some may describe as a form of “overreach” for a non-executive board. He experienced meetings with subordinates without his knowledge as disempowering, which made his life difficult and played a role in his decision to leave Eskom.
Lees said in an interview on Friday that he would pursue his questions about micromanagement at Wednesday’s meeting.
De Ruyter’s management style received scrutiny in the weeks running up to, and immediately after his abrupt exit. Announced in December, it followed comments by mineral resources & energy minister Gwede Mantashe that Eskom under De Ruyter’s watch was guilty of sabotage and of “agitating for the overthrow of the state” in allowing such high levels of load-shedding to afflict the country.
He has also likened De Ruyter to a “policeman” focused on “chasing criminals” without a grasp of the power utility’s challenges. He should, the minister said, be replaced with someone who has the technical capabilities to turn Eskom around.
In a recent interview with Business Day Mantashe said he never criticised De Ruyter as a manager, but he believed De Ruyter, who has two law degrees and an MBA, did not have the right qualifications to run Eskom.
“I criticised the misplacement of a lawyer [as head of Eskom] and then wanting him to manage an engineering entity that requires a fixer. [De Ruyter] can be given tasks where his skills apply, but in Eskom we need fixers,” Mantashe said.
Speaking to Business Day in February, one day after it was announced by the board that De Ruyter would vacate his post at Eskom more than a month ahead of schedule, Makwana said he thought De Ruyter was out of touch with certain areas of the business.
“There’s areas where he may have had his own sense of passion, but I don’t feel that people in power stations felt his leadership they should feel from a CEO of a technical company,” he said.
According to the Harvard Law School Forum on Corporate Governance, principles of corporate governance define the role of the board as being to oversee the company’s management and business strategies to achieve long-term value creation.
“The board delegates to the CEO — and through the CEO to other senior management — the authority and responsibility for operating the company’s business. Effective directors are diligent monitors, but not managers, of business operations.”
However, the forum stresses that the distinction between oversight and management is not always precise, “and some situations (such as a crisis) may require greater board involvement in operational matters”.
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