Public Enterprises Minister Malusi Gigaba expressed regret on Friday over the fact he had not been able to inform incumbent board members at Eskom and Denel of Cabinet-approved changes to the composition of those governance structures, owing to the “premature publication” of the decision.

Cabinet spokesperson Jimmy Manyi released the names of the new nonexecutive directors at a post-Cabinet briefing on Thursday.

The Eskom announcement, in particular, caused some anxiety, with both a key union and a major customer sector expressing open disquiet about a surprise plan to nominate Zola Tsotsi to replace Mpho Makwana at the Eskom annual general meeting (AGM) on June 27, 2011.

The National Union of Mineworkers immediately objected to Gigaba's lack of consultation, while the Chamber of Mines expressed surprise at the axing of Makwana, who had helped restore stability at the utility.

Manyi told Engineering News Online that the changes were designed to inject “new blood” into the nonexecutive team, owing to the fact that many of the incumbent members had already served for a number of years.

He noted, that Makwana had served as a nonexecutive director since 2002, albeit that his stint as chairperson began only in late 2009, after then chairperson Bobby Godsell resigned in the wake of a boardroom dispute with then CEO Jacob Maroga, who was subsequently dismissed.

In his statement, Gigaba highlighted that five of the 12 nonexecutive directors had served since 2002, while two had been on the board since 2005.

The changes were, therefore, pursued in a bid to rejuvenate and strengthen Eskom, while infusing the board with individuals with “strong technical engineering, project and structured finance expertise, and policy and regulatory acumen”.

Tsotsi, who was born in Port Elizabeth, has a BSc in mathematics and chemistry and an honours degree from Surrey University in chemical engineering. He worked previously at Eskom and with the water and power utilities in Lesotho.

Gigaba argued that, as a shareholder representative, he had a “duty” to ensure that State-owned enterprises (SoEs) were aligned to the vision of government, and that a “degree” of active participation by the shareholder representative in the areas of policy, planning, strategic direction and oversight was also required.

“The implementation of the developmental state agenda requires a paradigm shift on the role of the State-owned companies in the economy from trading strictly within the constraints of their balance sheets to exploring innovative ways to fund infrastructure development including partnership or cooperation with the private sector. Consequently, the developmental state also requires a different governance and shareholder management model of SoEs,” Gigaba argued.

In a recent interview with Engineering News Online, Gigaba indicated that he intended to play a more hands-on role and that he planned to introduce a new shareholder governance framework. He said that, in an era of performance management and constant monitoring and evaluation, SoE chairpersons, their boards and top SoE executives should expect far greater scrutiny by, and engagement from, the shareholder.

Besides Tsotsi, the other members of the new Eskom board will be Brian Dames (CEO), Paul O'Flaherty (CFO), Bernard Fanaroff, Boni Mehlomakhulu, Ashok Sharma, Mafika Mkhwanazi, Neo Lesela, Yasmin Masithela, Collin Matjila and Phenyane Sedibe.

The nonexecutive directors for the Denel board, meanwhile, have been named as Zoli Kunene (chairperson), Bafana Felix Ngwenya, Ghandi Badela, Nkopane Johannes Motseki, Melissa Ntshikila, Sonja Sebotsa, Professor Stella Nkomo, Ziphozethu Mathenjwa, Mavuso Msimang, Matodzi Ratshimbilani, Bulelwa Paledi, Professor Tshilidzi Marwala, Martie Janse van Rensburg and Gert Cruywagen.

The Denel AGM is scheduled for July 6, 2011.

Proposed changes to the Transnet board had been deferred by Cabinet for further discussion.