Greater Transparency Needed on PIC Board

Greater Transparency Needed on PIC Board

AIDC Statement on the appointment of PIC Interim Board | 15 July, 2019

The Alternative Information & Development Centre (AIDC) notes the appointment of an interim Public Investment Corporation (PIC) board of directors (BoD). Of great concern for the AIDC is the decision to disregard Deputy Finance Minister David Masondo’s recommendation that a new PIC board be appointed only after the PIC Commission of Inquiry is concluded. The commission of inquiry has offered the nation a chance to re-appraise the governance of the asset manager. The appointment of the interim board is to use the popular phrase letting a crisis go to waste

A positive step has been the appointment of trade union representatives onto the interim BoD.  The expectation is that these representatives will be subject to appropriate mandates and accountability. 

In addition to this, the decision by the Finance Minister to not appoint Dr Masondo to the interim board poses questions in light of past practices of the Deputy Finance Minister being the chairperson of the board. These questions however lead to the need for greater scrutiny on the appointment and role of the board at the PIC and other state-owned entities. Should there not be greater democratic control and say in appointing the custodians of these critical institution?

Current practice leaves great discretion on appointments in the hands of the Finance Minister. In light of this high level of discretion it is imperative that the minister account for the reasons why each individual was appointed and how they will fulfil their roles in the public interest. Part of this should include the disclosure of any material benefits that PIC BoD’s may receive as a direct result of them being on the PIC’s board.

Furthermore, greater interrogation of the boards of public owned (or controlled) entities is needed. This is particularly crucial in light of the daily revelations being made at the PIC and Zondo Commissions of Inquiry. South Africans need greater reassurance that the oversight-role of the board is congruent with the public interest and not used to facilitate the enrichment of a few individuals and corporations.

What the PIC needs now is greater transparency; greater transparency on governance (and this means transparency in how and why individual members of its board are appointed and any benefits they might receive). However transparency should not only be reduced to individuals but must be extended to the PIC’s investments. All of this information should be disclosed publicly. In line with the yet to be signed PIC Amendment Bill, South Africans need transparency on the PIC’s investments. This means regular public disclosure on which companies the PIC invests and how much they invest and the terms of these investments. This is the bare minimum South Africans are owed after years of opaque operations at the asset manager.