Cape Town - Minister of Public Enterprises Barbara Hogan has defended the need for independent boards to oversee state-owned enterprises, and railed against the racially and politically charged public commentary around Eskom's management woes.
In a statement to the National Assembly aimed at explaining government's role in the fallout between the power utility's board and its CEO, Hogan slammed the "never-ending stream" of public comment that often had no basis in fact or law.
This, she said, only served to "inflame and exaggerate" an already complex and difficult boardroom matter, one in which she was prohibited by law to interfere.
Hogan dismissed critics who accused her of dithering leadership and called for her resignation, saying it would have been "inappropriate and illegal" as a minister to interfere in the contractual relationship between the two parties.
"I refused to override the principles of corporate governance. As shareholder, the articles of association of Eskom allow me to appoint a CEO after consultation with the board.
"The CEO then enters into a contract of employment with the board, which is governed by the company and labour law. Included in that contract is the basis for termination of that relationship," said Hogan. She stressed that the right of either party to that contract can be asserted in a court of law.
Tireless behind-the-scenes labours
This, she said, was not the only reason for her silence during the drama which unfolded after Eskom board chairperson Bobby Godsell announced Jacob Maroga's resignation, only to resign himself when Maroga refused to go.
"In this highly charged and volatile environment I felt it wise to maintain a prudent silence and to refrain from making public commentary, which would only serve to heighten tensions.
"Instead, my deputy minister and myself busied ourselves, tirelessly trying to reach an amicable settlement. Days and days of long hours and complex negotiations ensued. Our aim was to try and reach an amicable settlement that would resolve the matter in the best interests of Eskom and the country," said Hogan.
She conceded, however, that President Jacob Zuma did step into the fray, but added this was in the interests of breaking the deadlock, not to interfere or undermine the board.
"Let me stress, that the integrity of a board is paramount. Boards are appointed by government, and by law are obligated to govern the company with the support of senior management.
"The shareholder oversees the functioning of the board to ensure that the board and the company give effect to the strategic intent and objectives of government," said Hogan.
She went on to reiterate that the board had now decided to terminate Maroga's contract. While Hogan made no comment on Maroga's capabilities, she took exception to applause that followed her confirmation that he would not be returning to work.
- Fin24.com