State of the Nation 2024
Type of recommendation
Fixing state-owned enterprises
Part 6, Volume 3, Page 976
Category- New Institution
- Fixing state-owned enterprises
Part 6, Volume 3, Page 976
Establish a standing Appointment and Oversight Committee for Board and Executive appointments for State Owned Entities
Category:
- • New Institution
- • Fixing state-owned enterprises
Description:
The Commission recommends the establishment through legislation of a standing Appointment and Oversight Committee tasked to ensure, by way of a public hearing, that any person nominated for appointment (by the relevant Minister) for Board appointment or as the Chief Executive Officer, Chief Financial Officer, or Chief Procurement Officer of an SOE meets the professional, reputational and eligibility requirements for such a position. The Committee will also investigate and act upon any complaints received concerning the misconduct of any Board member or senior executive in the discharge of his or her duties.
Responsible to implement:
• Department of Public Enterprises
Actions on recommendations
Government accepts the recommendations on the need for a process for the appointment of boards at state-owned enterprises that is not open to manipulation, including the involvement of independent panels with appropriate technical expertise to recommend suitable candidates to the relevant executive authority. This process would need to take due regard of any legislation relevant to the particular entity. Provision will be made in the final ‘Guide for the Appointment of Persons to Boards and Chief Executive Officers of State-Owned and State-Controlled Institutions’ for independent panels of relevant stakeholders and experts to play a role in nominating suitable candidates to the relevant Minister. It is anticipated that the guide will be finalised in the 2023/24 financial year.
Progress as at November 2023
Consulations on new legislation for State-Owned Companies and Entities are underway.
Part 1, Volume 1, Page 78
Category- Legislative Change
- Fixing state-owned enterprises
Part 1, Volume 1, Page 78
Amend Companies Act to allow for directors to be declared delinquent after two years have lapsed
Category:
- • Legislative Change
- • Fixing state-owned enterprises
Description:
The Commission recommends the amendment of the Companies Act so as to permit applications [for a director to be declared delinquent] to be brought even after two years on good cause shown.
Responsible to implement:
• Department of Trade, Industry and Competition
Actions on recommendations
The recommendation to amend the Companies Act so as to permit applications [for a director to be declared delinquent] to be brought even after two years is accepted and will form part of a review of the Companies Act that is expected to be concluded in the third quarter of 2023.
Progress as at November 2023
The Companies Second Amendment Bill has been approved by Cabinet and submitted to Parliament. This amendment extends the time bar period for bringing an application to declare a director of a company delinquent.
The Companies Second Amendment BillPart 1, Volume 1, Page 445
Category- Operational / Regulatory Change
- Fixing state-owned enterprises
Part 1, Volume 1, Page 445
Capacitate the Auditor-General’s office to be able to audit all public entities
Category:
- • Operational / Regulatory Change
- • Fixing state-owned enterprises
Description:
The Auditor-General’s office should be further capacitated so that it can audit all public entities. To the extent that it is practicable, serious consideration to be given to private firms being appointed to audit state-owned enterprises (SOEs) only if they can demonstrate that they have the requisite skills and understanding of their obligations to the public at large when auditing an SOE.
Responsible to implement:
• National Treasury
Actions on recommendations
The review of the respective roles of the Auditor-General and private auditors, as well as recommendations on the public-sector audit committees, are expected to be completed by 30 September 2023.
Progress as at November 2023
Work in progress.
Part 6, Volume 4, Page 1221
Category- Operational / Regulatory Change
- Fixing state-owned enterprises
Part 6, Volume 4, Page 1221
Independent and transparent process for the appointment of boards and executives at state-owned enterprises
Category:
- • Operational / Regulatory Change
- • Fixing state-owned enterprises
Description:
The recommendations of the Commission must insist on a truly independent and transparent process for the appointment of boards and executives at state-owned enterprises. This process must be free from political manipulations so that the ultimate appointment made by a Minister is genuinely the result of a merit-based selection process.
Responsible to implement:
• Department of Public Enterprises
Actions on recommendations
Government accepts the recommendations on the need for a process for the appointment of boards at state-owned enterprises that is not open to manipulation, including the involvement of independent panels with appropriate technical expertise to recommend suitable candidates to the relevant executive authority. This process would need to take due regard of any legislation relevant to the particular entity. Provision will be made in the final ‘Guide for the Appointment of Persons to Boards and Chief Executive Officers of State-Owned and State-Controlled Institutions’ for independent panels of relevant stakeholders and experts to play a role in nominating suitable candidates to the relevant Minister. It is anticipated that the guide will be finalised in the 2023/24 financial year.
Progress as at November 2023
This process is ongoing.
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