7 June 2007
The Minister of Public Enterprises yesterday addressed the Portfolio
Committee on Public Enterprises on the report on Board Members. The key points
made to the Portfolio Committee were as follows:
The selection and appointment process of directors onto the different SOE
boards is a thorough process, taking place over several months.
The number of Boards and the type of boards that a director sits on is taken
into account, as it is important to assess the availability and commitment of
each director to the board they are appointed to.
The duties of members and their prudential obligations are spelt out to the
potential members before they accept the position.
In the report to the Portfolio Committee we provided information on the type
of Board on which the directors sit. This was in the form of stand-alone
companies, holding companies, subsidiaries, associate companies and shelf
companies. This was done in order to provide clarity on the nature of the
Boards since it is quite clear that all Boards do not take up the same amount
of time or involve the same level of economic activity. A mere addition of the
Boards is therefore misleading. In addition there are a number of cases where
the persons concerned are involved in investment companies and sit on Boards as
a result of this. It is therefore important to make these distinctions and once
this is done a more accurate picture is obtained as to what the real demands on
the directorsâ time are as a result of the Boards they sit on.
The quality of work, commitment, and availability of SOE directors has thus
far not been compromised by the number of boards that they sit on.
Directors are appointed for a three-year period, but at each annual general
meeting (AGM), directors can be replaced. In general the AGM is also used to
rotate Board members to provide a mix of new persons and experience and
continuity.
It is therefore evident that should a director's performance not be
satisfactory during their term of office the shareholder has a number of
remedies to deal with such a situation. The Minister, however, expressed his
full confidence in the Boards of the SOE and that there was a pride in the
quality of persons we had been able to attract to the SOE Boards.
Media enquiries:
Ms Vimla Maistry
Chief Director: Communications
Tel: 012 431 1021
Cell: 082 372 0270
E-mail: vimla.maistry@dpe.gov.za
Issued by: Department of Public Enterprises
7 June 2007
Source: Department of Public Enterprises (http://www.dpe.gov.za)
