Eskom lessons

2009-11-17 00:00

THERE are two sides to every story. No better situation illustrates this than the Eskom debacle of the past two weeks. This is because the public brouhaha was about complex internal disputes over good corporate governance at Eskom, where there were two versions of events. The politicisation of the issue in the public domain was driven by two different sides.

Boardroom matters are both complex and confidential in their nature, making it very difficult for observers to make definitive judgements on the basis of what either party involved in the dispute presents to the public. For this reason, although ugly, the crisis offered valuable insight into deep-seated challenges facing parastatals like Eskom, and the diversity of views regarding the roles of the executive, the board and the shareholder. It also demonstrated the rights and wrongs of public commentary on complicated matters of this nature.

Over a month ago, Eskom, through its ex-CEO, Jacob Maroga, tabled its proposed tariffs to Parliament. This sparked a major public row with even ideological foes closing ranks in opposition to the proposed tariff increases. Both the filthy rich and the very poor were dismayed. Big industries like mining warned that such a price increase would inevitably lead to retrenchments.

So, long before the dispute between Maroga and the Bobby Godsell-led Eskom board broke out and spilled over into the public domain, Eskom and Maroga were already mired in controversy. Actually, when Godsell took over the reins of the board with the backing of the African National Congress, even the ANC’s critics saw him as a sane person needed to deal with the overwhelming insanity at Eskom. Believing that Godsell was brought in to edge Maroga out of Eskom, both friends and foes of Maroga squared up for a titanic power battle. No wonder that what appeared to be a mere boardroom tiff quickly turned into a national crisis. In the process, the government and the public got absorbed in the debacle.

Buoyed by expectations from some quarters of society, Godsell gladly announced to Eskom staff that Maroga had resigned. In no time, a public spat began. When Maroga contradicted Godsell’s announcement, Godsell decided to resign, citing lack of support from the government. The public row suddenly acquired racial undertones. First Democratic Alliance leader Hellen Zille issued a statement suggesting that the ANC’s deployment policy had gone wrong. She alleged that the ANC government would rather have an able leader in Godsell leave the organisation than have one of its cadres put to scrutiny for poor performance. This view was echoed by influential voices in the media. It also assumed that all black executives are incompetent deployees of the ANC and their white counterparts are competent, independent persons. Couched in the language of good corporate governance to give it credence, this argument helped fan racial feelings in public commentary for or against.

The ANC Youth League and the Black Management Forum predictably came to Maroga’s defence and castigated Godsell as a racist. This view also assumed that Godsell’s move was motivated solely by racial considerations. It assumed that Godsell acted on his own and without the support of the board and, therefore, Maroga had to be defended because he represented transformation. This camp used transformation to lend credence to its views.

Neither camp considered the merits of the issues in dispute or the broader issues of governance raised by the debacle except to buttress their agendas. In the process, the real issues were obscured­.

Of course, both the ANC and the largest Congress of South African Trade Unions (Cosatu) affiliate, the National Union of Mineworkers (NUM), sought to steer the debate away from a racial discourse by calling all actors to desist from racialising and politicising the matter.

In the end, Barbara Hogan, the Minister of Public Enterprises and a perceived major villain in the public row, had the last word. In a speech to Parliament on Thursday, she castigated both camps for exerting “undue pressure through a string of never-ending public commentary that sometimes had no basis in fact or law, and only served to inflame and exaggerate an already complex boardroom”.

She refocused the discourse to the breakdown in the relationship between the board and the CEO, the matter she and her deputy had worked tirelessly behind closed doors to resolve amicably, but speedily. They had tried facilitation, mediation and arbitration. They avoided intervening irresponsibly in violation of corporate governance. She then announced that the matter had been resolved with Maroga having resigned and interim board chairperson, Mpho Makwana, acting as CEO while the search for a new CEO is going on.

But this did not mean that the two sides to the dispute had actually been removed, because in her media interviews, Hogan revealed her attempts to lure Godsell back to the Eskom board. This means victory for one side and its triumphalism has started, threatening to perpetuate a political row.

The outcome has taken the steam out of the public controversy, eased pressure on the government and ended the reputational risks for Eskom. But it does not resolve the deep-seated issues bedevilling Eskom and other public enterprises. These issues appear as power dynamics involving boards, chief executives and shareholders. They are about how public enterprises should respond to complex expectations of their role in support of a developmental state in a highly unequal society thrust upon them. It is about demands that they adhere strictly to principles of corporate governance and still be sensitive to the country’s political economy. They are expected to be both capitalist and socialist in their conduct and orientation.

As for us commentators, there are many lessons to be learnt. One is that there are two sides to any story and both must be given the benefit of the doubt. Secondly, we need to be careful not to be stooges of powerful forces in society pursuing their own narrow political agendas. Thirdly, we should educate ourselves better about the matters we want to pass bold judgements on. And lastly, we should never act in a manner that destroys our country’s image and the reputation of institutions that are so critical for our long-term development.

We ought to have used this debacle to raise fundamental questions about role definition as it pertains to parastatals like Eskom, the SABC and Armscor. We can’t wallow in the sensationalising of matters of critical importance such as this.

• Siphamandla Zondi works for the Institute for Global Dialogue, but writes in his personal capacity.

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