LETTER: Water boards have leaky structures
Minister of Water and Sanitation needs to ensure ethical governance of water boards
Some state-owned water boards have been without formally constituted boards of directors for a long time. The board of Overberg Water in Somerset West was terminated by the water affairs minister (for reasons known only to her) in July 2017. The minister, who is the sole shareholder in this company on behalf of the people of SA, decided to illegally combine the fiduciary duties of nonexecutive directors and the management functions of the CEO into one person. The CEOs of these boards now approve their strategic direction and policies, provide oversight of themselves, manage the companies without independent oversight and disclose to stakeholders only what they deem important. This is no way to achieve legitimacy with stakeholders, promote ethical culture and improve performance, as King IV advises. The prescripts of King III and IV, the Companies Act and the Public Finance Management Act are clear about the separation of roles between a CEO and a board. It is unethical for accountin...
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