Workers want say in PIC board

Unions want a seat at the table when the minister of finance appoints a new board at the PIC, to give workers a say in how their pensions are invested. (Madelene Cronjé)

Unions want a seat at the table when the minister of finance appoints a new board at the PIC, to give workers a say in how their pensions are invested. (Madelene Cronjé)

The appointment of the Public Investment Corporation’s (PIC) new board, after members resigned en masse last week, should follow an inclusive process, say unionists.

Finance Minister Tito Mboweni has begun the search for an interim board for the biggest asset manager on the continent and organised labour says those appointed should preferably not have political connections, be without any stain of corruption and fit for the job.

Worker representatives are concerned about how the PIC is managing their investments. They say the process should be consultative and labour should have a seat at the table.

“If [Mboweni] decides to appoint without being transparent, without giving effect to the PIC Act, which clearly states he must consider depositors, which happen to be us, we will interdict the new board,” said Tahir Maepa, the spokesperson of the Public Servants’ Association.

The Act, which gives the minister the power to appoint the board in consultation with Cabinet, says the minister must have “due regard for the nominations submitted by the depositors”.

Maepa said the minister should consult workers and provide clear, public criteria about how the interim board will be appointed.

The nonexecutive board members of the PIC, including the chairperson, Deputy Finance Minister Mondli Gungubele, resigned at the beginning of February, saying recent events and allegations of corruption levelled against at least four of its members had brought its credibility and integrity into question.

Recent emails sent by a whistleblower, known as James Noko or Nogu, accused Gungubele, directors Sibusisiwe Zulu and Dudu Hlatshwayo and acting chief executive Matshepo More of impropriety.

The board resigned in the same week in which the PIC judicial inquiry investigating governance issues and corruption heard details about how the PIC’s former chief executive, Dan Matjila, and More had allegedly flouted governance procedures to benefit Independent Media owner Iqbal Survé’s ambitions to list Ayo Technology on the JSE.

The board said it would remain in place until Mboweni appointed an interim one.

The long-standing practice has been for the deputy minister of finance to be the chairperson of the PIC, although this is not legislated.

Trade union federation Cosatu’s parliamentary co-ordinator, Matthew Parks, said that although the union was not opposed to the deputy minister sitting on the board, it believed that Gungubele should not be reinstated because of the allegations.

But Maepa rejected the idea of appointing a politician to the board again, saying it would lead to interference.
“We don’t want the deputy minister of finance to be the chair. We want the board to be appointed and appoint a chair from its ranks without the interference of the minister.” Parks said the union would not compromise on the inclusion of a union representative on the board because that would give workers a direct say in how their pensions were being invested and would ensure greater transparency. The PIC Amendment Bill, which is still going through Parliament, proposes that “a trade union or two or more trade unions acting jointly” should have a representative on the board.

Of the R2.08-trillion managed by the PIC, 88% of it is comes from the Government Employees’ Pension Fund (GEPF), the PIC’s biggest client.

Cosatu agreed it was time that workers were represented on the board but Parks said they would not anticipate events by hoping that Mboweni would act in good faith and appoint a labour representative in line with the proposals of the amendment Bill.

“The minister has not shown much keenness to engage with labour in his short term of office. We have also encountered a fair amount of resistance on the PIC amendment Act in Parliament, from the treasury in particular,” Parks said.

Mboweni needed to move away from the historical approach used to make appointments to state-owned entities in which a minister represented the primary shareholder, according to business consultant Peter Goss, of Peter Goss (Pty) Ltd. He said Mboweni should include stakeholders in the process.

“He needs to form an appropriate expert panel to identify the board of directors. He cannot on his own quietly and privately suddenly emerge with a list of people as this will run the risk of being [seen as] cronies as opposed to being competent people.”

Goss said the PIC had to revisit its corporate governance framework and demand better management control and more directorships in the companies in which it invested.

“The board needs to be encouraged to change its strategy to be more prescriptive. When you pay R4.3-billion of government employee pension funds to an Ayo, it should be made sure that the board [can] impose a degree of management control over the organisation. You cannot give money and walk away,” said Goss.

But he challenged the idea that trade unions should sit on the PIC board because not all the employees who contributed to the GEPF were trade union members. Instead, worker representatives could be employers or institutional investors.

For example, if Eskom’s employee pension contributions were invested through the PIC, it would be prudent to have an Eskom representative sitting on the board looking after the money.

“The union is not a standard default; it’s an option,” Goss said.

In an emailed response to the Mail & Guardian, the GEPF said it was also perturbed by the testimony being given at the PIC inquiry and by the allegations of impropriety by some board members. But it said it would await Mboweni’s decision on the appointment of the interim board. It did not indicate whether it expected to have a say in this.

“It is important to note that the PIC is a corporation whose sole shareholder is government, with its own board, governance structures and processes,” GEPF spokesperson Matau Molapo said.

Tebogo Tshwane is an Adamela Trust journalist at the M&G

Tebogo Tshwane

Tebogo Tshwane

Tebogo Tshwane is an Adamela Trust financial journalism trainee at the Mail & Guardian. She was previously a general news intern at Eyewitness News and a current affairs show presenter at the Voice of Wits FM. Tshwane is passionate about socioeconomic issues and understanding how macroeconomic activities affect ordinary people. She holds a journalism honours degree from Wits University.  Read more from Tebogo Tshwane

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