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Governance body warns against Mabuza's dual role at Eskom

Jul 31 2019 07:15
Khulekani Magubane, Fin24
Eskom chairman Jabu Mabuza at the interim results

Eskom chairman Jabu Mabuza at the interim results announcement at its Megawatt Park headquarters. (Picture: Felix Dlangamandla)

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Jabu Mabuza appointed Eskom acting CEO


Having Eskom chair Jabu Mabuza also serve as the power utility's interim chief executive falls short of best practice guidelines outlined in Judge Mervyn King's reports on corporate governance, the CEO of the Institute of Directors of Southern Africa Parmi Natesan has warned.

Eskom announced on Monday evening that Mabuza would serve as the interim CEO of the state-owned entity for three months, after Phakamani Hadebe’s resignation left the position vacant.

At a briefing on Tuesday, Mabuza said he would be a "placeholder" CEO for the next three months in order to maintain "leadership stability" at the debt-laden power utility. 

"Selflessly I accepted this burden from the minister," he said, adding he would not serve longer than three months. Eskom started advertising for a new Group CEO in late July. 

'Rigorously separate'

Natesan cited Principle 10 of the King IV report, which says the CEO and chair of an organisation are "quite distinct".

It adds: "[G]ood governance requires that the two positions be kept rigorously separate."

"The chair leads the board in exercising oversight over management, and should be independent, while the CEO leads the management team. The CEO and his or her team are accountable to the board, and this separation of powers is vital to ensure the necessary checks and balances are in place," Natesan said.

Not about Mabuza

She stressed, however, that in Eskom's situation, it may have been a case of weighing the organisation's unique circumstances.

The concerns raised were over governance best practice, not Mabuza's calibre as a person or executive, she added.

"In the circumstances in which Eskom finds itself, appointing the chair as CEO as an interim measure, with the purpose of creating a stable transition period until a new CEO is appointed, may be in the best interests of the organisation," she said.

"However, this is not an ideal situation, clearly."

Natesan urged Eskom to "properly address" a number of issues, namely to take clear steps ensuring that the lead independent director "plays an active role where necessary"; that the appointment of a permanent CEO is transparent; and that Mabuza's tenure as interim CEO not be extended while he also serves as chair.

ANC deputy secretary general Jessie Duarte, meanwhile, said at a briefing on Tuesday that it is of concern to the party that "the same person will chair and be the CEO of Eskom". 

"We will raise the matter and concern with [Minister of Public Enterprises Pravin Gordhan]," he said. 

eskom  |  mervyn king  |  jabu mabuza  |  south africa


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