PIC board should have 'global expertise and perspective', inquiry hears

The Public Investment Corporation board should have expertise in investment-related matters and include representatives of key stakeholders. 

These were some of the recommendations that came out of a PIC governance workshop held in May to discuss matters relating to the fund manager.

A submission by an independent financial consultant, Muitheri Wahome, before the PIC inquiry on Wednesday gave insight into discussions that took place at the three-day workshop attended by Finance Minister Tito Mboweni.

The inquiry, which began its work in January, is probing allegations of impropriety at the firm, which manages over R2 trillion worth of assets, including the pensions of government employees.

Evidence presented by Wahome focused on the make-up of the board and the skills it needed in order to play an "effective oversight role".

Global role

"It should have broad competence in asset management and business," she said.

"As the PIC is a global investor and asset management is a global industry, the board should include individuals that bring global investment industry expertise and perspective".

In February, members of the PIC board resigned in en masse, following allegations of corruption and poor governance leveled against some its members. The inquiry was later told that Finance Minister Tito Mboweni had instructed to board to resign. The minister is yet to appoint a new board.

The workshop also recommended that key stakeholders, such as clients and trade unions, should have a seat in the board.

Various labour representatives, including the Congress of South African Trade Unions (Cosatu) have been calling for union representation in the board, in an attempt to have a voice on behalf their members.

Board selection

The minister of finance, in consultation with Cabinet, is responsible for the appointment of the board; however, the workshop recommended that the process should in future be conducted by the board nomination committee of the PIC.

It was not clear when the recommendation, put forward at the workshop, would be adopted.

The most significant suggestion from the meeting was on the role of the board chair, a role which has always been held by the deputy finance minister. 

According to Wahome's presentation, the workshop wanted the position to be occupied by an independent person "with a significant background and demonstrable track record in investment or business".

The inquiry will resume on Monday.

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