The Minister of Public Enterprises, Leon Jooste, yesterday called on all boards of directors of state-owned enterprises to refrain with immediate effect from undertaking any foreign travel without formal approval.
“The reason for this is that I have received information that some board members undertake foreign trips and earn board fees for the entire duration of such a trip and then the entity will still cover the various associated travel costs as well, resulting in a substantial cost to company and marginal benefit to the entity,” Jooste said in a statement released to the press.
He added that all public enterprises have existing chief executive officers (CEOs) or managing directors (MDs), who are duly equipped to deal with most matters that require foreign travel. “The CEOs and MDs are already earning fair salaries and I want to see that entities utilise their services to the absolute maximum,” Jooste added.
On September 30 Jooste delivered a statement in parliament to highlight a number of remedial actions, which his ministry is taking to ensure compliance of the various public enterprises to the provisions of the Public Enterprises Governance Act.
“These actions are not of an abstract nature, but rather calculated to address certain issues immediately to contain costs and ensure efficiency and effectiveness in our public enterprises,” he said.
Furthermore, Jooste noted he was particularly concerned about the remuneration of boards of public enterprises and, therefore requested CEOs and MDs to furnish his office with the “total-cost-to-company” of their boards.
The costs he requested includes all costs associated with boards, including sitting fees, retainers, subsistence and travel allowances, air tickets, honorariums and any other privileges or allowances (monetary or in-kind) offered to board members over the last three financial years.
“I am aware that there may be exceptional circumstances where a board member may be required to travel abroad and in these cases the chairpersons of the boards may request permission from the Ministry of Public Enterprises to travel and we may approve such request if we are convinced that it is unavoidable.
“I will also need to be convinced that such a trip will generate tangible benefits that shall accrue to the public enterprise, failing which approval shall not be granted. The financial status of the entity will also obviously be taken into consideration.
“A board member undertaking a foreign trip on behalf of a public enterprise will also not be allowed to earn board fees for the duration of such a trip. The entity will be responsible for the daily subsistence and travel allowance of the member, as well as the cost of flight tickets and accommodation,” Jooste noted.