SWAKOPMUND – Some state-owned enterprises (SOEs) are failing because they are led by board members who possess no integrity nor the skills required to provide leadership that would place such institutions on a growth path, Minister of Public Enterprises Leon Jooste said Friday.
Jooste was addressing CEOs, board members and managers of SOEs at a two-day conference that concluded on Friday in Swakopmund. Jooste, during panel discussions, said it is so easy to point fingers at failing SOEs while a lot could have been avoided if competent professional people were appointed as directors to lead these institutions.
“We had 29 years of dependency syndrome from our public enterprises which is unsustainable and created a corporate DNA. We now have to remanufacture,” Jooste said shortly after the panel discussion on Friday.
He said that appointing the right boards will literally solve all problems, especially in loss-making public enterprises.
“Personality traits, quality of integrity and skills are what we look at when appointing a board… this sort of culture will filter down to the core of that specific institution. A board like that would not want to fail and would not allow an institution to fail.”
“They will make sure they appoint a CEO with the same calibre and hold him accountable. He will also have the same culture and leadership style and will set an example for his workforce,” Jooste explained.
Jooste wants government to seek such qualities when appointing SOE boards.
The minister also pointed out that it is essential to understand that some of the failing public enterprises cannot be privatised or liquidated.
“Some of these institutions are rendering essential services on behalf of the government and cannot be liquidated, hence we are looking at the option of restructuring,” he said.
Jooste added that restructuring does not necessarily mean retrenchments but rather looking at options such as mergers and absorbing some of the institutions into various line ministries and also looking a public private partnerships (PPPs), while those doing well can be listed on the stock exchange.
Apart from that, he says challenges of SOEs are a global phenomenon – notably in neighbouring South Africa which has hundreds of SOEs.
South African Minister of Public Enterprises Pravin Gordhan, who also attended the conference, said that it is important to note that privatisation of public institutions could be great but tricky and should be well thought through.
“It is important that we start to measure the impact of such institutions and not necessarily the output only,” Pravin said.