EDITORIAL: SOE CEOs throttled by political noose
Where politically unpalatable decisions have to be taken, the individuals charged with making them are stymied by their political overlords
The surprise resignation of SA Post Office CEO Mark Barnes last week had an air of déjà vu about it. After 3½ years at the helm, Barnes resigned with immediate effect, citing differences over strategy and structure of the post office.
It was, he told the FM this week, "a fundamental disagreement with the government. If you have a fundamental disagreement with the shareholder … then you can’t in good conscience stay on."
Seven years ago, SAA director Russell Loubser threw in the towel at the embattled airline. Like Barnes, Loubser had ostensibly signed up for the job out of a sense of public duty (as he told BizNews in a 2015 interview) — a commitment to public service that was slowly eroded by a seemingly uninterested state shareholder.
With no response forthcoming from the department of public enterprises around organisational structure — about the need, for example, for three wholly state-owned airlines — no action on solutions and a general lack of support, Loubser resigned with immediate effect. He was followed by most of the airline’s board, including the chair, Cheryl Carolus, who cited a breakdown of her relationship with the shareholder.
But one doesn’t have to look all the way back to 2012 to wonder at the revolving door of state-owned enterprise (SOE) executives. A quick survey of just some of SA’s larger SOEs tells a story all of its own: Eskom is without a permanent CEO after the resignation of Phakamani Hadebe, as is SAA, with Vuyani Jarana out the door; Transnet is on its second acting CEO in as many years; and Prasa’s acting CEO is the sixth in that position in three years.
And that’s just at the CEO level.
It speaks to something deeply problematic with the state’s management of its own assets. It’s not, for the most part, that the government isn’t able to attract top-drawer talent. It’s that it’s not putting that talent to good use. On the most positive reading, that could be benign neglect.
But it could also be a calculated throttling of corporate initiative for political expediency. Politicians, after all, are a single-minded class. Their objective is to retain power. That’s not to say all politicians are without noble intention; it’s that even the most noble of intentions are worthless without access to the levers of power.
And so, where politically unpalatable decisions have to be taken — and there are a number of those in SA at present; think retrenchments at the SABC and Eskom, for example — the individuals charged with making them are stymied by their political overlords. It’s a disempowering position to be placed in, to be given a company to run but not the tools to do so. And so the revolving door.
That Barnes remains committed to serving the public sector, albeit "not on a leash", is remarkable. It speaks to great resilience — or great naiveté, if he thinks things are likely to be better at any other state company. Because, while the hallmark of SA’s SOE environment in the Jacob Zuma era was the exercise of political influence for nefarious ends, the rapid turnover of executives in the "new dawn" suggests an overenthusiastic nanny state that doesn’t trust the very people it has invested its own resources in.
If the state capture saga taught us anything, it’s that an overly close relationship between politicians and SA’s big-budget SOEs brings with it a multitude of dangers. The irony is that government’s attempt to manage the fallout has been to further centralise power in political masters rather than build corporate accountability and give competent CEOs free rein to do their jobs. That may be our undoing.