Draft policy to strengthen SOE governance

by Benice BurgerSeptember 15, 2017

Deputy President Cyril Ramaphosa says the Inter-Ministerial Committee on state-owned entities (SOEs) will soon submit a second draft of the shareholder oversight policy with an aim of improving governance at SOEs.

The Deputy President said this when responding to a question by DA MP Jacques Julius at the National Council of Provinces on Wednesday. Julius had asked what actions have been taken to implement some recommendations of the Presidential Review Committee on SOEs.

He said government is currently involved in the process of reforming the State Owned Enterprises. This process, the Deputy President said, was being led by the Inter-Ministerial Committee (IMC) that he chairs.

“Some of the recommendations that have been adopted include the finalisation of the Private Sector Participation Framework for Infrastructure Delivery, the Framework for the Costing of the Development Mandate, the Remuneration Framework as well as the Guide for the Appointment of Persons to Boards and Chief Executive Officers of the State Owned Companies.”

He said once these are fully implemented, SOEs will reclaim their role as drivers of growth and transformation, a goal that is also envisaged by the National Development Plan (NDP).

“This cannot be achieved unless we strengthen the governance of our SOEs. To this end, the IMC will be submitting to Cabinet the second draft of the Government Shareholder Oversight Policy (GSP) to clarify mandates and to regulate lines of accountability.

“The draft policy outlines the rationale for continued state ownership in the key sectors of the economy and make proposals for alternative ownership models. Implementing a new shareholder oversight model will be a radical change in the governance and operations of SOEs in order to be competitive and regain investors and public confidence,” he said.

The Deputy President said all SOEs must ultimately be financially sustainable and have a positive impact on the economy.

“We want the SOEs to have qualified and ethical boards and competent staff. The appointment of Boards must follow a well-planned, formal and transparent procedure that will applied across the different SOEs.

“Our target here is to promote transparency in the appointment of boards, and to increase accountability, sound administration and good governance practices in all organs of state.

“By providing a conducive environment, state-owned companies (SOCs) can become drivers of investments and job creation; they can become technology enablers, and they can lead a skills revolution in this country.”

The Deputy President said, meanwhile, that recommendation 15 of the Presidential Review Committee report calls for the sanctioning of corrupt activities, including fronting, by among others, developing a register of delinquent individuals and companies that are involved in corruption practices.

“It further calls for the sharing of this register across the SOEs.

“Even though the IMC is yet to implement this recommendation along others as part of the next phase of reforms, there are on-going anti-corruption efforts in our SOEs.

“In many instances these are bearing fruits, hence the public reports and outrage at all allegations of corruption. Our view is, whoever is suspected of wrongdoing should be brought to book without fear or favour.”

Source: http://www.sanews.gov.za/south-africa/draft-policy-strengthen-soe-governance

About The Author
Benice Burger