You have been thrown into the deep end as the Chair of the Eskom Board. In your 2019 autobiography, Betting on a Darkie (sub-title Lifting the Corporate Game), you made it clear that you became an engineer because you like to fix things and have a built-in desire to make things work. You now have that opportunity.
It is an extremely daunting and, perhaps, even dangerous venture. But you did sign up for it, despite the possibility of once more being assigned the Dead man walking label that implies that you are doomed to fail, a metaphor that someone in one of your previous companies assigned to you after you were appointed as CEO.
You have been on the Eskom Board since October 2022 and you have had a year to assess and understand the organisation and its perils. So, you must have a pretty good idea of what lies ahead.
How do you go about it, then?
Let us start with what you have and what you know. According to Principle 1 of the King IV Report on Corporate Governance (2016), the governing body should lead ethically and effectively. The report recommends following the ICRAFT characteristics that Board members should embody: Integrity, Competence, Responsibility, Accountability, Fairness, and Transparency. Among these, a particular emphasis is placed on integrity and competence.
The majority of contributors to your book have high praise for your principles and values. In the foreword, President Thabo Mbeki remarked that your book tells the story of “a fellow national who is devoted to the values of honesty, truthfulness, objectivity and candour in the construction of good and durable relations.” After joining a previous employer, someone asked you why a person with “such high ethics” would join such a shady company. Similarly, previous colleagues continuously refer to your sense of integrity in their contributions to your book. Your character is intact. The integrity box is ticked.
Shifting our focus to your credentials, you were probably appointed as Chair because the right people believed in you. There is a shared belief that you are up to the task. Your career success is testimony to that. You made good impressions and had a significant impact at your previous companies like Afrox, Tiger Brands, and Nampak, just to name a few. Furthermore, you have successfully orchestrated major turnarounds at IBM, Microsoft, MTN SA, and Altron. You are well-equipped both professionally and in terms of business acumen, especially in your ability to fix things. The competence box is ticked.
That brings us to Eskom. President Mbeki also stated that you “have the skills modern society needs” and are “committed to building our country as a viable democracy”. For a democracy like ours to maintain credibility, it needs state-owned entities (SOEs) that are not only financially viable, well-managed, and transparent but also contribute to improving the lives of people in South Africa. Eskom is, at least at this juncture of the country’s history, probably the most crucial SOE whose success is not only essential for the survival of the country and its people but also for the sustainable development of the SADC region.
Moving the focus to the Eskom Board, the question arises? Where shall your help come from? Undoubtedly, from good governance guidelines. The King Committee Guidance Paper on Corporate Failures and Lessons Learnt (2021) advises that the primary role of a governing body’s chair is to provide leadership to the governing body of an organisation, set the tone for its performance, and oversee its management. The guidance paper asserts that one of the main reasons for corporate failure is an ineffective Board chair. The Committee recommends that the chair ensures that the focus is maintained by the governing body on what is in the organisation’s best interest and establish the tone for organisational success. Perhaps most crucial, the chair should set the tone for ethics in the organisation.
Your career has been distinguished by your ability to surround yourself with good and competent people and believing in them. This is sorely needed at Eskom. In your role, you need to serve as the link between the Board and the CEO while maintaining an arm’s length relationship with the CEO and management. The King Committee’s Practice Notes (2017) on the Chair’s role recommend that the incumbent offers guidance, especially during times of crisis, and the current situation undeniably qualifies as a crisis.
Let us be specific about ethics. Your responsibility is to influence and oversee the establishment of an ethical culture within Eskom. This means that you need to ensure that both the Board and the Social and Ethics Committee understand what is meant by an ethical culture, call it an ethics mindset or ethics consciousness if you like. You should oversee the measurement of the strength of the ethical culture and implement interventions to build a sustainable ethical culture that shapes the ethical thinking and behaviour of individuals within the organisation. Regular reporting on the progress thereof should not merely be relegated to the end of agendas, as ethics often is, but should indeed be a top priority.
Your mother’s store in the Eastern Cape bore the name Embekweni, which means a place where you are respected. Can you transform Eskom into such a place?
The challenging part is that you set a very high bar for yourself, as articulated in your book. This becomes especially demanding when you sit in the red-hot seat of Eskom Board Chair. It is highly likely that you will have to, in your own words, cultivate a vision of an improved quality of life for all and establish long-term goals in a situation where “the present is hopeless and the future devoid of promise.” Additionally, you will need to conceptualise and effectively implement a much-needed turnaround strategy, which will likely require living up to your nickname of Mbazo (meaning the Axe) to stop the bleeding. And, of course, it involves maintaining your belief that South Africa is going to be okay, echoing your own words.
A word of caution is in order at this point. You have stated that one should never assume that you have the support of your colleagues. The same sentiment should apply to those who have direct or indirect oversight of and expectations of Eskom. So, be careful, some will have nefarious intentions. In these situations, the words of Sun Tsu come to mind: “The supreme art of war is to subdue the enemy without fighting.”
Finally, regarding Betting on a darkie, Mteto, the purpose of this open letter was not to teach a fish how to swim, but to encourage you to excel in your mammoth task. This time, it is not just a company that is betting on you, but an entire nation that lives in hope.
About the author: Prof. Leon van Vuuren is an Executive Director: Business and Professional Ethics at The Ethics Institute. He holds a Doctorate of Industrial Psychology from the University of Johannesburg.