Opinionista Johann Redelinghuys 1 June 2014

SAA’s Board is a festering sore

“A fish rots from the head” is an appropriate bit of governance wisdom that is used to describe the effect of bad leadership on a company. Chairing the board of a major company like SAA requires sound judgement, maturity, balanced opinions and great interpersonal skills. It also requires a deep knowledge of the company’s business and of the challenges faced in its markets. Based on the reports of her recent behaviour the chairwoman of SAA, Dudu Myeni, shows an embarrassing lack of these essential qualities.

Unless government starts to respect real business competence and brings the skills of experienced business leaders to the governance of state-owned enterprises the farce playing on boards like that of SAA will simply continue

The spectacle of such a poorly qualified chairwoman throwing her weight around and leveraging off her close relationship with the president is an embarrassment to all who use the national airline and who cherish our reputation as proud South Africans

Much has been said about the government’s lack of business understanding and that the administration continues to be less than business friendly. The firmly held belief of white capitalist exploitation of the people must be where it starts. The truth is that there are deep layers of business and governance expertise residing in the community of experienced non-executive directors serving on major listed boards. Many of them could make a great contribution on a board like SAA and could prevent its chair from regularly ending up with egg on her face

Mr Gigaba playing the government’s hand, again hell-bent on transformation at all costs and blinded by sycophantic loyalties chose to put a person with no knowledge of the airline industry and a messy background as chair of the South African Association of Water Utilities (SAAWU) into this critical job.

Instead of putting a firm hand on the internecine fighting and providing some steadiness in the conflict between the warring board factions as a chairman should, she is not only contributing to the governance shambles, she is jeopardising the relationships with suppliers and stakeholders. She shoots herself in the foot by overriding her own board and conducting executive business as she chooses.

Yes, the airline is a state-owned enterprise and one supposes that as its owner the government can do with SAA what it damn well pleases. Its role in the recent years is ample testimony that it does just that. But there is a wider issue. SAA is literally the flag carrier of brand South Africa and our calling card in the international community. When one sees that beautiful tail emblem amongst a line of other aircraft at an international airport there is a nice feeling of recognition and pleasure. At the time of boarding a SAA flight on a return trip back home to South Africa from anywhere in the world there is a warm sense of familiarity and a feeling of goodwill. The airline does not belong to its conflict riven leadership, it belongs to us and to see something that we own and should be proud of abused and exploited in such a manner is exasperating. In front of international visitors it is like being let down by a badly behaved family member when everyone should be on best behaviour

Government interference and ham-handedness caused the departure of Cheryl Carolus and several highly regarded senior business people two years ago when the board had a chance of bringing some expertise to the job. But it could not resist the temptation when they had to be replaced of bringing in a phalanx of loyalists who now fight and bicker constantly. Each wanting to assert their influence and a chair that is completely out of her depth.

The temptation when the numbers are so big and the delicious prospect of wielding massive influence must be irresistible. Placing orders for A320 aircraft is not shopping for small stuff. It’s no wonder that the lady is ignoring her board and doing things in the way she sees fit. It is not about following the proper process it is about personal power; endorsed by Number One. Once again the tax-payer will be left to pick up the pieces

Lynne Brown is the new minister of public enterprises and was quoted as saying “I can’t bear working in an environment where things don’t get done”. As she is now in charge of businesses owned by the state she has to manage and take responsibility for the on-going SAA debacle. Our urgent message to her as she prepares to ‘get things done’, is that she should select the next board of SAA based on experience, skill and ability and not on credentials as ANC cadres.

Choosing transformation above sustainable profitability can only be a short term strategy. If the business is managed into the ground for lack of leadership there will be nothing more to transform. The same advice would apply to the boards and chairs of any of the other state-owned enterprises. Party loyalty and willingness to give in to government will only lead to further costly disasters.

SAA has been surviving on a R5billion guarantee that was put in place in 2012. The disgrace of a national airline forever in hock to funders doing the government bidding must be stopped. Shouldn’t this be done by putting an end to the tenure of the big fish at its head? DM


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