Parmi Natesan, the chief executive of the Institute of Directors. Picture: Supplied
In his SONA speech, President Cyril Ramaphosa correctly identified governance failure as one of the reasons for the poor performance of the vast majority of South Africa’s municipalities. Poor governance could indeed lie at the heart of the failure of service delivery. But to turn that around, you need to appoint the right people in leadership positions, says Professor Parmi Natesan, CEO of the Institute of Directors in South Africa (IoDSA).
“The president indicated that moves are afoot to professionalise the civil service which, if they bear fruit, will go a long way to solving the service delivery crisis we are facing,” she said. “The institute has been calling for the professionalisation of the civil service for a while. As King IV code makes clear, appointing the right calibre of leaders is the first prerequisite for a competent organisation.”
King IV’s supplement for municipalities urges councils to ensure they have access to “professional independent guidance on corporate governance and its legal duties” and that it appoints a competent municipal manager (King IV, p85). As King IV makes clear, specialised and in-depth governance expertise is required to ensure that any entity’s governance fulfils its primary aim of ensuring the organisation operates both ethically and effectively.
Principle 7 of King IV states: The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity, and independence for it to discharge its governance role and responsibilities objectively and effectively.
In its “Consolidated general report on local government audit outcomes: MFMA 2021-22”, the Auditor-General clearly shows how ineffective governance lies at the heart of municipal dysfunction. Poor governance leads to defective financial reporting and thus a lack of accountability. The Auditor-General has frequently noted that municipal audit committees lack the skills needed to oversee the council’s finances properly.
Inefficient use of information technology is also cited as a problem. Given technology’s role in promoting efficiency and cost-effectiveness, its governance has become a key agenda item for governing bodies, including councils, as indicated in King IV (Principle 12: The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives).
“One of the key problems faced by the public sector as a whole, including municipal councils and state-owned enterprises, is the appointment of unqualified individuals. The state has to adopt best practice and appoint individuals who are fit and proper to serve, but who also have the right level of skills, including proper governance knowledge,” Natesan said. “Councils run complex operations and have massive responsibilities. Councillors need to be appointed with that in mind.”
The institute has constantly warned that appointments made on political or other improper grounds are the root cause of the challenges hamstringing the state at all levels.
“The institute sees the professionalisation of the civil service as a high priority in order to revitalise service delivery and return municipalities to financial and operational health. The important first step is to ensure that they are ethically and effectively led, and that means appointing the right people to these boards,” Natesan said.
Saturday Star