SOUTH AFRICA: GOVERNMENT STRENGTHENING OVERSIGHT ON STATE-OWNED COMPANIES

PRETORIA, Public Enterprises Minister Lynne Brown says processes are underway to strengthen her oversight role as a shareholder of South Africa state-owned companies (SOCs) to improve governance.

She said the department's challenge is to inculcate the principles of good governance practised within the department across SOCs. The Minister said events that have unfolded over the past year have demonstrated the need for a departmental structure that is agile, swift to respond to challenges at SOCs and capable of ensuring compliance.

The department should, in this financial year, complete a realignment process to significantly strengthen the tools at its disposal to exercise its oversight responsibilities.

Lessons learned over the past year will also profoundly impact the terms contained in the shareholder compacts signed by the shareholder and SOCs in the future.

The 2016 Memorandum of Incorporation (MOI) differs from the 2014 version and it gives me, as shareholder, additional powers to act decisively to ensure the assets of the 54 million South Africans are looked after. The major change here is that the Minister has now been assigned the power to act against a Chief Executive Officer of a State-owned company should the need arise.

The Minister said the principles of the new shareholder policy to improve the performance of SOCs and sharpen government's role as shareholder were approved by Cabinet in the last financial year.

Minister Brown said in instances that company employees conspire among themselves to commit wrongful acts, the Shareholder relies on the company's executive and board to spot the infraction and take the requisite action.

Ahead of the presentation of the department's annual report, the Minister announced that State-owned entities needed to emulate the performance of the department.

Salient features include a clean audit report from the Auditor-General, and the fact that the department spent almost 95% of its budget, achieving 18 of 22 set targets.

Taking a step back, it is important to note that in my first year as Minister, the department had a qualified audit, followed by an unqualified audit and now the clean audit. This needs to be emulated at all SOCs in my portfolio, she said.

Source: NAM NEWS NETWORK

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