19th May 2017 at 10:51 am #61938
Leaders need to demonstrate and put into practice efficiency, honesty, integrity, responsibility, transparency, and accountability.
If we consider corporate governance issues in terms of the various applicable reports and acts we will notice they all include four principles or basic essentials – fairness, accountability, responsibility and transparency.
Consider Eskom over the past few years – how do they weigh up in terms of these basic essentials? There is no indication of responsibility, there is no accountability or transparency, and openness and honesty are sadly lacking.
I make a distinction between accountability and responsibility. You render an account when you are held accountable, but you can be called to account when you are responsible. In the case of Eskom I ask the question, who is the responsible person or persons, and have they been called to account?
A director is accountable at common law and by statute to the company and at the same time responsible to all stakeholders including the shareholders. This, in the case of Eskom would apply to all directors yet none are being called to account. The entire board of directors as far as I am concerned are to blame and should be held accountable.
Openness, honesty and transparency
Management is required to be open and honest at all times. We have seen many instances in the past few weeks where this does not exist. Contradictory views and opinions by Eskom management have been expressed both in the press and on TV.
• The skills shortage, originally place by Eskom management at less than 100 people has now escalated to over 4000.
• Depleted coal stocks, originally denied, are now placed in the millions of tons.
• The export of power to neighbouring countries, denied originally by the CEO, has now been verified as a fact.
What we need to question is, do openness, transparency and honesty fit into the values of Eskom? Is there place for them and are they applied?
Service before profit
Management have a responsibility to ensure the service delivery. In order to do so it is the responsibility of management to ensure all necessary resources, raw materials and human resources are available. If a product or service cannot be delivered because the required resources are not available then management is held accountable for this failure. Here I ask the question – were, and are the required resources available and are they effective?
In the event of failure, action must be taken in terms of accountability and responsibility to establish the cause of the problems and how to allocate and apportion blame. There is a need to consider all aspects of the problem and if one of these is the failure to provide service in favour of profitability then this equates to gross mismanagement.
A leader is required to be a visionary. A leader should be capable of seeing the big picture and foreseeing the future. A leader based on ability to visualise future needs plans with the management team what the requirements of the market will be, what resources will be required, what provision needs to be made to ensure availability of resources. Failure to do so indicates an inability to foresee market needs and to plan appropriately.
The question is – To what extent did management at Eskom plan? If there was a foreseen need that was rejected by government then what contingency plan was put in place? In management we do not always get what we want and must make alternate arrangements in the form of contingency plans in order to achieve our objectives. Did this happen at Eskom?
Rewards and incentives
Salaries are paid for doing what is expected, for doing what is required each day. Standards of activity, productivity, service and profitability are set by employers and agree to by employees at the time of appointment. These standards are what each and every employee, at all levels, should be achieving or striving to achieve. This is what an employee is paid for.
Companies offer rewards and incentives for achievement, going beyond the expected. Employees are rewarded for going the extra mile. There is no reward or incentive for doing what is expected, unless you work for Eskom.
Here you can fail to deliver, make huge profits at the expense of the customer, mismanage, fail to plan, show no leadership ability, and fail to apply good corporate governance principles, be dishonest and unethical and be rewarded to the tune of millions. How can this be justified?
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8th Dec 2017 at 12:03 pm #64444
12th Dec 2017 at 10:00 am #64466
Hi Lucy, not practical at all. however if a three pronged approach to performance management is used then we could do without KPI’s. Managers should follow three steps
1. Performance agreement – agree on targets and goals
2. Performance management – of what has been agreed to
3. Performance appraisal – look back over the year and decide what went right and wrong – then things could work very well on that front.
26th Mar 2019 at 8:28 am #70053
I am re-posting this article in LIGHT of recent happenings leading to power outages. One year and three months later??
So much is happening in South Africa that can be attributed to poor management and/or a total lack of management skills.
Leadership is sadly missing right from the top.
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