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Protect us from the madness of the bosses

May 13 2018 06:00
Muzi Kuzwayo

You’ve seen them — those guys who drive big cars and act like they own the road. They’ve got the power to crush you in their hands, and you’ve heard it, “absolute power corrupts absolutely”.

This kind of corrupted power has been prevalent in boardrooms for quite some time now, where bully shareholders like Carl Icahn boss management around, and when they do not agree to their short-term demands, they vote them out.

In a business, different shareholders often have different wants — pensioners may invest in a business for its regular dividends. Younger people who do not need cash immediately may want the business to invest its money in long-term capital projects that will yield better profits in the future.

Corporate governance has evolved over the years to manage these diverse interests. Business, we have accepted, is not for the shareholders alone, but all its stakeholders, including employees and the communities in which these businesses operate.

Surprisingly, state-owned enterprises are still exposed to bullying by government ministers, who are often called “the shareholder”. A minister can fire the whole board, appoint the people he or she prefers without regard for the rest of the stakeholders. As we speak, some state-owned enterprises have no boards to govern them, and this hampers delivery.

In many instances, the management team has to consult the board for approval beyond certain amounts of money. What happens while the minister is mulling over who should sit on the board?

We saw in the previous government how Cabinet ministers turned state-owned enterprises into private ATMs and how they appointed people who only bowed to their will.

The crumbling Luthuli House made it so much easier for the forces of greed to capture the weak and aspiring ministers, and so capture the state. Many South Africans feel good that there will be a commission of inquiry that will look into this, but it is like looking in the rear-view mirror for what has fallen through the rear door, but continuing to drive without closing it.

The power to appoint the board of a state-owned enterprise must never rest with one person alone. The process must be transparent so the sunshine can disinfect the boards, just as with the Judicial Service Commission.

Criteria should be put in place to protect management from predatory behaviour from board members as well as government ministers.

If management executives are given sufficient protection from the madness of their political bosses, they will perform their duties without fear. Our country will then be governed by the rule of law and contracts and not by the monarchic fits from which some government ministers suffer from time to time.

The same should hold for government departments. Directors-general are not servants in the king’s castle. In many instances, new ministers change them as if they are changing personal staff who handle their wardrobe.

Since Cabinet reshuffles occur haphazardly, ministers seldom wait for the contracts of the bureaucrats to come to a legal end. They look for and find the ways to suspend them. Since we have bought into the mob narrative that all government officials are corrupt, when someone has been accused, we applaud like uncivilised Romans celebrating the burning of a citizen.

Fascism does not march into a country in bright shining armour. Instead, it comes invisibly like blight that destroys all the crops.

If we want to build our economy, we have to create systems that will curb the power of the powerful.

“Fascism does not march into a country in bright shining armour. Instead, it comes invisibly like blight that destroys all the crops."

* Muzi Kuzwayo is the founder of Ignitive, an advertising agency.

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