Intervention in SOEs should be systemic and made public - expert

There have been questions on whether Public Enterprises Minister Pravin Gordhan is coming on too strong on state-owned enterprises.

News24 quoted the minister as saying during Tuesday’s State of the Nation Address debate that the situation in SOEs is uncertain and the government won’t hesitate to intervene if the boards and management of these organisations don’t do what’s expected of them.

Responding to this, Pan-African Investments and Research Services CEO Dr Iraj Abedian suggests a systemic framework needs to be implemented where political oversight and organisational oversight is exercised.

I think the level of intervention should be systemic. That means the political oversight and boundaries between political overisght, the role of the board, the composition of the board and contract of the board should be made clear and ideally should be made public.

Iraj Abedian, CEO - Pan-African Investments and Research Services

So you and I as citizens know what are the deliverables that the minister has signed with the board of let's say SAA or Eskom and that, of course, presupposes that the minister does have absolute confidence that the board can deliver.

Iraj Abedian, CEO - Pan-African Investments and Research Services

On the back of that, then the board enters into a similar organisational arrangement with the chief executive in order to deliver those on the best possible professional advice.

Iraj Abedian, CEO - Pan-African Investments and Research Services

A culture has been developed over the past 20 years that these boundaries of political oversight, corporate governance and executive control are completely blurred and it is done on ad hoc basis.

Iraj Abedian, CEO - Pan-African Investments and Research Services

We need to sit back and not perpetuate this adhoc interventionist approach and instead put in place a developmental systemic framework....

Iraj Abedian, CEO - Pan-African Investments and Research Services

If you appoint the right board who understands which page you are on as a political representative then you should have absolutely no need, as a minister, to interfere.

Iraj Abedian, CEO - Pan-African Investments and Research Services

Click on the link below to hear the full conversation...


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