CASE STUDY

READ THE CASE STUDY AND ANSWER THE QUESTIONS THAT FOLLOW:

NEW PIC INTERIM BOARD: A BIG WIN FOR WORKERS, TRADE UNIONS

While much of the focus has been on the appointment of business heavyweights Maria Ramos, Dr

Ruel Khoza and Sindi Mabaso Koyana to the interim board of the Public Investment Corporation $($PIC$),$

a closer look at its composition reveals something unprecedented about board appointments in South

Africa. Three individuals that were appointed on the board by Finance Minister Tito Mboweni on

Wednesday $10$ July are unusual.

They are Ivan Fredericks, Zola Saphetha and Mugwena Maluleke, who are all trade unionists at the

Public Servants Association, National Education, Health and Allied Workers' Union, and South African

Democratic Teachers Union respectively. Essentially, the PIC, the manager of about R$2-$trillion worth

of state workers' pension funds on behalf of the Government Employees Pension Fund $($GEPF$),$ will

have worker representation on its board for the first time since its incorporation in $2003.$

It is uncommon for board appointments to include worker representation, not only at entities such as

the PIC but also at state$-$owned entities and corporate South Africa. However, it is considered as best

practice in Europe, with Germany often seen as the role model. For many years, trade unions$-$incensed

by rampant corruption allegations that have surfaced at companies that employ their members and

management that glibly embarks on retrenchments, blaming tough economic conditions that

intensified their demand for worker representation on company boards.

They have argued that having trade union$-$affiliated individuals will ensure that workers are privy to

decisions taken by management and the board itself. It would also be to their advantage when wage

negotiations or labour disputes emerge because worker representatives at the board level would see

on a first$-$hand basis the financial position of a company and the rationale behind decisions taken by

management.

The call for worker representation on the board also grew louder at the height of State Capture during

Jacob Zuma's presidency, when state$-$owned entities such as Eskom, South African Airways, Denel and

Transnet became the target for looting and enriching a coterie of politically connected individuals.

Having worker representation on the PIC board will probably result in workers keeping a much closer

watch on what goes on with their money. It also has the potential to hold PIC executives and directors

accountable for any governance failures and sloppy investment decisions.

However, there is a caveat. The board worker representative model only works if individuals chosen

to the board have the best interests of workers at heart and are highly principled. Otherwise, they will

become pliable and fall into patronage networks.

SOURCE: $($Nel and Kirsten, $2020)$

QUESTION: ONE $(25$ MARKS$)$

The case study illustrates a new important phenomenon and development in South African labour

relations which is the widening of space for employee involvement and participation. Critically

examine the various ways that can be adopted by South African organisations to enhance employee

$4$

participation and involvement