MEDIA STATEMENT
27 August 2018
BLSA welcomes the approval of new boards as a step in the
right direction
BLSA commends the appointment of new boards of the Airports Company SA
(Acsa) and the South African National Roads Agency Ltd (Sanral) as a
significant step towards restoring leadership integrity, good corporate
governance and financial prudence in these entities.
Cabinet announced its approval of the new boards last week.
We congratulate Themba Mhambi on his appointment as chairperson of
Sanral, along with four non-executive directors. We also welcome the
appointment of Nolulamo Gwagwa as chairperson of Acsa, and look forward
to the finalisation of Phydelis Mvelase, Yershen Pillay, Bonang Mohale,
Pascalis Mokupo, Nosizwe Nokwe-Macamo and Nqobizitha Phenyane as nonexecutive directors.
State-Owned Companies constitute a key part of our national life and our
national assets and should be central to delivering public services, investing
in infrastructure, creating jobs, diversifying wealth and providing
opportunities for people to realise their potential.
The unfortunate tragedy of the last seven years is that these public entities
have suffered major blows to their operational functionality and capability to
deliver public value due to maladministration, corruption and state capture.
Over the past three years, four board members quit Acsa, two of which
resigned over a lack of corporate governance at the entity, political
interference, as well as issues of over-reach and undermining of the board
by the Acsa executive.
Their departure clears the way for the new leadership to proceed with the
process of stabilising the operations of the entity whilst restoring the
company to financial health. The new boards’ skill sets and proven
leadership will definitely add impetus to this mission and will serve the
public entities well.

 “We are especially delighted that someone of Bonang Mohale’s calibre,
depth of experience, immense leadership ability, integrity and unyielding
patriotism has agreed to help steer Acsa through the most challenging
environment the organisation has faced since 1994. As CEO of BLSA, he has
had a distinguished career at the helm and in leadership roles of several
major South African and multinational companies including Shell South
Africa, Otis Elevators, South African Airways, Sanlam, and Drake & Scull
Integrated Facilities Management. He has also received several prestigious
awards for his pioneering role as a nation-builder, transformation change
agent in the companies he has been involved in, and a vocal opponent of
state capture. Bonang is scholar, with a heart of a lion”, said Dr Jabu A.
Mabuza, BLSA Chairman.
As the tide of history turns towards a new state-building exercise, his good
grasp of both operational and governance matters makes him a great fit for
the position. Attention must turn to institutional capacity and several
constraints that have held back the economic growth, reducing income per
capita, and disproportionately hurting the poor. Public debt has risen,
depleting buffers, and leaving little room for fiscal policy to support growth.
On the back of high expenditure levels, public debt as a share of GDP has
doubled during the last decade, reaching 53 percent of GDP in 2017, and
pushing up public-sector gross financing needs.
In the past fiscal year, the fiscal deficit was more than 1 percentage point of
GDP above the budget target, as revenues underperformed, affected by low
growth, and expenditures were pushed up by bailout costs from loss-making
public entities.
Materially turning the economy around toward strong and inclusive growth
will require swift implementation of a bold transformation agenda. The
policy thrust now must be toward a greater role for public entities as
delivery agents in a context of massive inequality.
It is this sense of mission, driven by our shared vision and bound by the
constitutional goals of a capable developmental state that underpins our new
dawn. Through our public institutions and State-Owned Companies, we must
work to promote our constitutional values such as inclusivity, non-racialism
and gender parity. The state-owned companies belong to all South Africans.
They are not the preserve of only a few.
Measures adopted to tackle corruption, such as changes in boards, actions
to strengthen procurement, and in general, the intention to eliminate
wasteful expenditure, are certainly a step in the right direction.

 However, this is only the first step in combating corruption and inefficiency.
We are hopeful that the new boards heading up Acsa as well as Sanral, and a
speedy state capture inquiry will lead to the past leadership being held
accountable and through this, an acceleration of the fight to reduce wasteful
expenditure of public funds in South Africa.
This must include the exit of all the problematic executives from the utilities
and taking credible disciplinary action against officials implicated in serious
wrongdoings; clarifying regulation to foster private investment in the sector;
driving down costs to ensure that the entities do not borrow to service debt,
facilitating investment in infrastructure to reduce the cost-structure in the
economy so that other economic players become more efficient and
competitive, and increasing the efficiency and quality of public service to all
citizens.
Ultimately, success will be dependent not just on the aptitude of the boards
alone but the people running State-Owned Companies, the governance
systems and value systems that inform the public service.
Issued by BLSA
Media Enquiries
Sizwe Mbele
Director: Strategy and Marketing
+27 (O) 82 560 6055
smbele@businessleadership.org.za