One of the greatest flaws in the governance of state enterprises is the tension caused by the inability to understand the distinctions and intersections between fiduciary duties, oversight and operations. The current model preferred by the ANC government entails appointing a political principal as the shareholder representative. The party still regards state enterprises as strategic assets, the business models of which should be responsive to its prevailing policy stance. To facilitate this, the ANC has always preferred to appoint executives who have an awareness of its policy stance to run the most important state enterprises. These are then supplemented by boards of directors who should be able to balance the political mandate — as articulated through the government’s policy stance — and the financial sustainability question. But sometimes this has turned out to be an unmitigated disaster. When faced with tension between the financial sustainability question and the policy positio...

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