Abstract
The South African government uses state-owned companies (SOCs) as vehicles through which it provides the necessary services that it cannot directly provide. However, the South African SOCs are plagued by corruption that causes perpetual dependency on the government for bailouts. Major SOCs have had a pattern of mismanagement and poor governance. One of the root causes of SOCs’ governance collapse is the inappropriate intervention by state shareholder representatives in the SOCs’ affairs.
Although S 66(1) of the 2008 Companies Act bestows governance authority on the board, the SOC boards do not enjoy practical authority and autonomy to manage the SOCs. The state shareholder often uses the SOCs' developmental mandate to justify intervention. This presentation will advocate for the extension of the original and undelegated governance authority to SOC boards to minimize or eradicate political interference. It will argue that the developmental mandate (a corporate purpose) and the board’s autonomy (corporate decision-making power) may co-exist.
Minah Tong-Mongalo is a Ph.D. student at the University of Cape Town, South Africa. She is an admitted attorney of the High Court of South Africa and a contract law specialist. Her Ph.D. research focuses on the governance of state-owned companies in South Africa, particularly the division of power between the state shareholder and the board of directors. The aim of her thesis is to argue for the affirmation of the SOCs' board’s autonomy free from state intervention. She is also conducting a comparative analysis of governance models of state-owned companies in South Africa, Norway, and the People’s Republic of China.