In another two months, it will be exactly a year since Andre de Ruyter was forced out of his job as CEO of Eskom, the struggling power utility.
After months of what was supposed to be a structured, board-led CEO search, the process has been stalled while Eskom’s performance continues to deteriorate.
It has emerged that Pravin Gordhan, the public enterprises minister who oversees Eskom, is apparently unhappy that the board he entrusted with the recruitment gave him only one name. He has cited procedural mistakes by the board in its recruitment.
Still, fixing these procedural defects could have been done by a mere phone call or a meeting with Eskom board chair Mpho Makwana, a man who has previously worked with Gordhan.
What is unacceptable is stalling and restarting the entire process while Eskom strangles households and businesses.
In the absence of a clear explanation, the public — the ultimate victim of Eskom’s implosion — has to conclude that the minister’s action amounts to second-guessing the board. Worse, could it be that Luthuli House is unhappy with the board’s choice? These are concerning possibilities.
The board is scarcely a year old. To its credit, it accepted the unenviable complex task of leading the process to fix Eskom; split it into three subsidiaries (for generation, distribution and transmission) under a holding company; and, after De Ruyter’s departure, it assumed the role of seeking a new CEO.
Its thankless work has been made infinitely harder by variables beyond its control. Two of these stand out: first, the introduction of the electricity minister into a fluid governance ecosystem; and second, the impending scrapping of the public enterprises department.
For the first time yesterday, Eskom’s executive management gave a briefing on the electricity system’s status. Each Sunday, South Africans have been treated to lengthy but mostly meaningless briefings by electricity minister Kgosientsho Ramokgopa and the generation team.
Months after the ministry’s introduction, it remains unclear what, if at all, the new CEO’s relationship will be with the minister who acts as though his is an executive management role.
Similarly, the board should be concerned about the impact on Eskom’s stability of the establishment of the SOC Holding Company, probably Eskom’s new oversight home.
Also, although the Transmission Company, the monopoly, has been legally set up, it still has no CEO or board a year later.
These are not new problems. It took more than a year for Gordhan to appoint a new Eskom board. The skeletal board limped along while Eskom was failing. The same happened with Transnet, another failing entity. It was only two months ago that Gordhan appointed a new Transnet board.
To restart the Eskom CEO appointment process, apparently Gordhan’s preferred cure for the procedural defects, is too risky. Not only does it taint the process, it also discredits the board and undermines its integrity and authority. More important, it risks losing the current candidates, especially the board’s recommendation.
In the interests of good corporate governance, Gordhan must submit the board’s recommendation to the cabinet. Whatever procedural flaws the board may have committed, they are less serious than a CEO who is hand-picked by politicians.
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