Nice work if you can get it: Transnet director paid R34 500 per meeting
A Transnet director effectively earned R34 500 per meeting of the Transnet board and board committees in the 2010/2011 financial year. These and other aspects of Transnet's Annual Report and Financial Statements were interrogated in today's meeting of the Standing Committee on Public Accounts (SCOPA).
Transnet is responsible for the national rail and ports infrastructure and will be a key player in the R262 billion transport and logistics projects announced by Finance Minister Pravin Gordhan earlier this year. It is thus imperative that the corporate governance of Transnet is above reproach.
The Transnet Annual Report indicates that non-executive board member, Mr MP Malungani, attended only 3 out 5 scheduled board meetings since being appointed and has missed 2 of 3 board committee meetings. He received a director's fee of R138 000 - which amounts to R34 500 per meeting.
Mr Malungani also holds 63 other directorships and trusteeships. Transnet's board must therefore interrogate whether Mr Malungani, as well as other board members holding multiple directorships, is adding value to the board and whether they are making a sufficient contribution to the success of the entity and the integrity of its governance structures.
Given Mr Malungani's involvement with 63 other companies and entities it would, for instance, be necessary to carefully manage whether the appropriate disclosures have been made in terms of potential conflicts of interest.
Corporate governance principles, as prescribed by King III, require that the board and individual directors should be evaluated every year. The Transnet chairperson reported to SCOPA today that board evaluations were done for a four-month period following the new board appointments in 2011. A full year evaluation will be done shortly.
In today's meeting I have requested that SCOPA should receive the evaluations for the full year and specifically a follow-up on the efficacy of Mr Malungani in performing his duties as a director.
As a public entity, Transnet is accountable to the people of South Africa. Any mismanagement of public funds represents an opportunity cost paid for by our most vulnerable citizens. There should be no doubt about whether individuals entrusted with responsibility for good governance in this entity are able to fulfil their duties. SCOPA should take the lead in ensuring that this happens.
Statement issued by Dr Dion George MP, DA Representative on the Standing Committee on Public Accounts, March 13 2012
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