STATE-OWNED ENTERPRISES
Private-sector guidelines can assist the government
SOEs have no profit motive, but they must still be able to demonstrate measurable value, write Sian Wanjiru Kiri and Joy-Mare de Wet
SA has more than 700 state-owned companies. Only 22 of them are of significant size and influence, but together, they make the government an important player in the economy. The track records of these companies are decidedly underwhelming. South African Airways (SAA) is functionally bankrupt, Eskom and Transnet have become known for their role in alleged state capture rather than for delivering services and infrastructure, and the Post Office has been unable to reliably perform its most basic function for years. As Peter Major of Cadiz Corporate Solutions points out, if a country is going to have state-owned enterprises (SOEs), they should be role models in the economy. They should be managed by the best people available and set standards for others to follow. In SA, however, this is not the case. Corporate governance at many public companies is poor, wasteful expenditure is high and executives are often political appointees rather than people with skill and acumen. Given the cost o...
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