The ESKOM Board Appointment: An ecdysis or metamorphosis?

    The excitement at the uncharacteristic wholesale replacement of a Ramaphosa-era inaugural ESKOM board with a new and mid-political-first term must be welcomed with caution and more profound questions. While its timing looks like a response to societal calls for change at ESKOM, the fundamental question is 'to what extent is the change a political ritual or genuine recalibration of South Africa's policy approach to energy security? Is the constitution of the new board ecdysis or metamorphosis to borrow natural science nomenclature. 

Ecdysis is the phenomenal shedding of the outer skin. It is a process which allows whatever is damaged (tissue) to regenerate or be substantially reformed. It does not change the species. The DNA of the species undergoing ecdysis stays intact. In fact, most species' predators know its vulnerabilities during the season of ecdysis, and they generally pounce on it at that time. 

Metamorphosis is, on the other hand, the process of transformation from one form to another through distinct changes. The outcome of the process is an entirely different organism. During metamorphosis and at each stage, the transforming organism occupies a niche in its ecosystem.

Clearly, the South African energy situation, and given the government's commitments to -climate change, decommissioning of fossil fuel-based energy systems, green energy solutions, unbundling of 'network industries' such as electricity, SOE restructuring- requires a metamorphosis rather than ecdysis. Changes of the 'main board' of ESKOM independent of the other newly established boards of 'unbundled entities' would be ecdysis unless the mandate of the new board was reviewed as they were appointed. 

In governance terms, the wholesale changes represent a gap of continuity from the other board, unless ESKOM is institutionally also a completely new entity which requires trailblazers to its corporate form. Suppose ESKOM is still what society knows it to be in structure and content; the change is incomplete if it does not include the reconfiguration of its executive committee. With the government being the sole shareholder, ESKOM is vulnerable to decision-making challenges and deficits characterising the interior of its shareholder context. 

Like in ecdysis the new board might be the new outer skin for the next season of the same species. In organisational studies terms, the policy direction the better covered species has its work cut out, manage the energy transition process. The legitimacy crisis of ESKOM's leadership and governance complex has gotten its vaccination to withstand societal rejection but attract positive expectation on an otherwise helpless situation, unless the policy trajectory gets new vectors. The ecdysis ESKOM finds itself in, can only lead it to a business rescue tunnel, whereat it will find ready suiters to strip it off its assets, as the new outer skin adjust to the high stakes geopolitical interests operating in South Africa.

There is nothing new in celebrating the newness of the ESKOM board. The shedded outer skin was as shiny when it was paraded. When Jabu Mabuza was appointed chairperson of the outgoing board and the exiting current cohort, their prowess as individuals were equally celebrated. In fact, three months into its term, the Jabu Mabuza board saw him being appointed executive chairman and CEO, notwithstanding his conflict of interest challenges. The stature and personal brand sensitivity of Mpho Makwana can only mean there were serious and unknown to the public conditions the government had to succumb to. Otherwise, it would be foolhardy for Mpho to take up this challenge, save for a fervent love for his country. The same goes for other board members.

With the instructively dominant King Code in South Africa, corporate governance playbooks clinically separate the board and executive to audit practice levels. In the case of PFMA institutions, like ESKOM, the accounting authority, accounting officer, and executive authority roles of stakeholders and shareholders are clearly defined. The limitations and discretionary space of the board and management are succinctly articled. Without some executive sting, consequence management might be choked by stalemates in the elaborate employer-employee relations South Africa boasts. 

Without a doubt, and In the practice of corporate governance terms, like the previous one, the new board of ESKOM is appropriately talented. Without vitiating the legitimate expectations of society out of the new or newness of the board, it would unfortunately still be the executive management that will bring to the new board decisions options that are fit to resolve the complex energy crisis. 

It is also fair to be sure that the country is in no way expecting the new board to be executive in its new role. This is notwithstanding the foregrounding of the technical skills of appointed board members than their corporate governance prowess in a context of suspected ineptitude in the system. Corporate Governance positions the board differently when it comes to execution. Suppose their accounting authority is not politically refereed by the Executive Authorities that just fired others and appointed them without a transparent process. In that case, they can start by firing the CEO, that is, if the dominant interests allow them to touch De Ruyter. 

Theirs, the new board, is to be astute in regulating the interests of strong and powerful stakeholders along the entire ESKOM value chain. As they balance the energy needs of society, they should do so in the purview of networked interests in the multi-billion budget ESKOM currently commands. Given the already displayed power of interests in ESKOM, from its reported capture to its muted capture by multi-decade long green contracts, it is clear that as a company, ESKOM has a distinct political economy with sub-hierarchies to the national one. In any political economy, there will be powerful individuals or companies without which no change of a system will succeed unless picked up from ruins, as ESKOM is threatening.

Power, argues Ngaire Woods, can mislead in so far as it prevents the powerful from taking stock of the consequences of their actions. Because the powerful tend to imagine themselves above rules, they fund within society discourses that bracket them away from the consequences of their protection of profit to the disadvantage of end users. As they win space to dictate policy direction through lobbying mechanisms which might include funding political parties or individuals therein, their willingness to seek counsel and countenance criticism grows commensurate to the power accumulation process. 

In situations like the new board finds itself, resilience literature on crises such as ESKOM faces points to understanding the 'ostrich paradox'. This is explained as a condition which expresses the disconnect between knowledge and action. It is a known fact that South Africans, including the new board members, are the most knowledgeable people about their problems and yet the most action-phobic society on what to do about what they know are problems. Evidence on the new board members, especially where they were themselves executives, post to a series of successes in turning around organisations. Where they are responsible for corporate governance, the execution prowess of those in the organisation has been the undergirding asset base. 

Unless this decision of the new board is in the immediate term about getting the energy availability factor to the best possible level to meet this economy's needs, and in a much more abstract way, model our energy transition path into the future without compromising our inherent strengths not to be energy orphaned, it cannot lead to some metamorphosis but ecdysis. For the new team, most of the decisions they will be expected to make will require the power of foresight. 

Optimistic as society is about the corporate governance abilities of the new board, there should be some pessimism on what new magic will those on the execution side spin out of the proverbial hat, which they could not with the previous board, given that the political executive authority arrangements are still very much intact. 

This is my long-winded way of saying congratulations to the new board. Similarly, congratulations to the Executive Authority complex, which had the first phase of courage to deal with the leadership deficit. As we expect movement towards stage 1 or no load shedding at ESKOM, as a nation, we hoping for a stage eight leadership shedding in the executive management of ESKOM by the new Board. Congratulations to the governing party for its December conference changes of leadership in tandem with what the country expects. 

But hey, when ignorance screams, intelligence is in silence. CUT!!!

🤷🏿‍♂️Time for the leader of society brigade has arrived.