Even the creative reframing of the withdrawal of 20 Sector Education and Training Authorities (SETA) board chair appointments – as an example of democracy in action – can’t disguise the fact that governance failures like these could be easily avoided. “This isn’t rocket science,” says Parmi Natesan, CEO of the Institute of Directors in South Africa (IoDSA). “The public sector needs to get its nomination processes up to scratch. There is no excuse for not appointing the right people in the first place.”

Political motivation
So, where does the problem lie? The Higher Education Minister was publicly called out for appointing prominent ANC politicians and others linked to the party as SETA board chairs. Among mounting pressure, she decided to “recalibrate the process” and form an independent panel to oversee the new nominations and recommend suitable candidates. This time, she said in a statement, the process would focus on merit, competencies, and relevant experience, while also ensuring a balanced representation regarding race, gender, youth, and persons with disabilities.

According to media reports, the ANC welcomed the decision as a principled act and reaffirmation of the party’s commitment to ethical governance and democratic accountability. In line with this PR strategy, President Cyril Ramaphosa is reported as suggesting that South Africans should be grateful to have a government that listens when it has made mistakes.

Clear guidelines
While Natesan agrees that restarting the nominations process is the correct approach to rectify the flawed initial process, she is concerned about a possible clash between so-called cadre deployment and a fair transparent process. “Who actually knows what their new process is?” she asks. “What we need is transparency and a clear guideline used in all public sector board appointments to ensure good governance and improve organisational oversight. The criteria for appointing senior roles should no longer be politically motivated.”

She points out that the IoDSA provided extensive input to the Department of Public Services and Administration into the planned update of the “Handbook for the appointment of persons to boards of state and state-controlled institutions”, but this was not approved by Cabinet. “We were hopeful that an updated handbook may make a positive difference, but unfortunately, it doesn’t seem that a sound nominations process was applied in the SETA appointments or by the public sector in general,” says Natesan.

Getting it right
The SETA board chairs should have started serving their five-year term on 1 April 2025, overseeing their organisation’s mandate of addressing the mismatch between the available skills and those required by the labour market. In her statement, the Minister tried to defend her previous chair appointments, listing their academic degrees and areas of expertise without mentioning any actual board experience. Yet King IV makes it very clear that chairs require not only the right skills but also the right experience, in addition to being independent. “This recommendation is designed to ensure that decisions are made in the best interest of the organisation, rather than being unduly influenced by a single shareholder,” says Natesan.

It's encouraging that the Parliamentary Portfolio Committee on Higher Education still expects the Minister to account for the original appointment process, including the composition and credibility of the panel tasked with making these recommendations.

“We can only repeat our pleas to strengthen the nominations process and the professionalisation of board members in the public sector,” says Natesan. “The framework and guidance for appointing the right people, based on competency rather than political connection, are readily available. They just need to be applied.”

ENDS

MEDIA CONTACT: Stephné du Toit, [email protected], 084 587 9933, www.atthatpoint.co.za
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
X:  @The_IoDSA
LinkedIn:  Institute of Directors South Africa Company Page 
Facebook: Institute of Directors South Africa 

According to a recent news article[1], Lifeline Ekurhuleni experienced challenges in forming a stable and credible board of directors.  "Having an capable board is absolutely essential for the effective functioning, oversight and control of an organisation," says Parmi Natesan, CEO of IoDSA. "When a board is effective, it significantly boosts an organisation’s ability to deliver on its objectives and maintain stakeholder trust."

The news article refers to ongoing challenges at Lifeline Ekurhuleni regarding the election of their board, noting that irregularities and issues with the nomination process have previously hampered board elections.” It describes an incident where board candidates were absent at an initial meeting intended to establish the governance structure, resulting in the meeting needing to be rescheduled. Given that every candidate missed the initial meeting date, it is unclear whether they were fully informed of their obligation to attend, which raises concerns regarding the communication process.  Additionally, it was reported that during the nomination period, technical issues caused the nomination submission method to be changed from email to WhatsApp, with not all the candidates being notified about this change, leading to claims that some candidates, despite applying, were not included in the original list.

Natesan points out that King IV clearly emphasises the need for a formal, rigorous, and transparent board nomination process. This approach ensures candidates selected are well-equipped to fulfil their responsibilities and meet the needs of the board.  It also provides credibility to the process and ultimately trust in the candidates being put forward for election.

The report further states that selected board members would now undergo vetting and training through the Department of Social Development (DSD).  Natesan, however, questions whether candidates were sufficiently vetted prior to their recommendation to the board.  Due diligence during the initial nominations process, prior to selection, is absolutely critical to ensure that candidates have the knowledge, skills and experience needed to perform their duties well.  It also provides some level of assurance regarding the lack of reputational risk by association with the prospective candidates.

Regarding the planned training by DSD, Natesan stresses the importance of clarity about its scope.  "Director training should explicitly cover crucial governance elements such as directors’ legal duties, strategic oversight, and accountability," according to Natesan. In order to be assured that board members are fully aware of their responsibilities and able to fulfil them, such training should be in line with King IV, which establishes the standard for efficient corporate governance.

Crucially, a major funder's remarks in the news report suggest that Lifeline Ekurhuleni must raise its governance standards in order to maintain financial support. This demonstrates unequivocally the growing significance of sound governance. Organisations need to understand that stakeholders are becoming increasingly aware of governance issues, especially funders. "Financial support and organisational sustainability can be directly threatened by poor governance practices," cautions Natesan.

The IoDSA strongly advises organisations to implement the recommended governance practices, such as a transparent and clear nominations process, rigorous due diligence procedures before appointment, and then extensive training programs for directors once appointed. Natesan concludes, "Good governance not only ensures board stability but also significantly mitigates reputational risks, enhancing trust and confidence among stakeholders."

[1] Fresh start for LifeLine Ekurhuleni as new board takes the helm | African Reporter

ENDS

MEDIA CONTACT: Stephné du Toit, [email protected], 084 587 9933, www.atthatpoint.co.za
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
X:  @The_IoDSA
LinkedIn:  Institute of Directors South Africa Company Page 
Facebook: Institute of Directors South Africa