Why the Eskom board will not be held accountable
The dilemma with the Eskom board lies in a fundamental flaw that’s built into the legal structure of parastatals. The concept of the State Owned Company (SOC) was imported by the 2008 Companies Act. But it wasn’t thought through properly. The SOC is an “enterprise” registered i.t.o the Companies Act and listed as a public entity i.t.o. the schedules to the Public Finance Management Act (PFMA), but “ownership” is not the test of what constitutes a SOC. Instead, that falls to the provisions of the PFMA. The involvement of the PFMA in Eskom’s life is an additional, and substantial, complication from a governance perspective. The PFMA is the “ultimate” act if there is a conflict with the Companies Act.