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Public Administration News  
SOEs Important in Developing a State
Source: Bua News
Source Date: Monday, December 06, 2010
Focus: Institution and HR Management
Country: South Africa
Created: Dec 07, 2010

“SOEs have a role to play in this process, both through procuring in a manner that promotes industrial investment and through making direct targeted investments in these capabilities,” said Gigaba.


It is for these reasons, among others, that the department will continue to engage with these enterprises and ensure they run optimally.


“In view of the above, we have decided to exercise a hands-on and robust approach in order to ensure that the SOEs under our control do meet policy targets,” he said, adding that the department will require strict compliance with the current governance framework.


The department will also ensure that oversight documents are made public so that the public is informed of what is expected of enterprises so that these enterprises are publicly accountable.


Among the problems faced by the some 400 SOEs in South Africa is that they straddle across the various government departments - complicating matters as there is no common shareholder governance model or framework that guides this.


Gigaba said there was a reliance on ad-hoc instruments that may not be suitable for an SOE environment where there is government as the sole shareholder.


Individual chairpersons and CEOs of enterprises will meet with the department quarterly to assess compliance while the department will also engage SOEs at their Annual General Meetings while also ensuring stable boards and management.


“As we go forward we shall revive the efforts to provide a holistic approach to SOE governance through a dialogue on government shareholder management,” said Gigaba.


The minister was speaking at a seminar organised by the Presidential Review Committee (PRC) on State-owned enterprises and the Organisation for Economic Cooperation and Development (OECD).


All shareholder departments of such enterprises - of which the Public Enterprise Department is responsible for nine - are mandated to ensure that these entities are an effective vehicle for socio economic development. – BuaNews


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