Shareholders have the ultimate responsibility to choose the right individuals to steward and oversee the organisation. It is in their interest to ensure that the organisation is in the hands of upright, well-meaning people who will, in turn, ensure that it is well run and thriving.
One bad apple on a board can badly influence the board dynamic, and shareholders can end up with egg on their faces. Shareholders must act in good faith and appoint members for a proper purpose. They must apply reasonable, informed processes to balance the relevant skills, governance stability, accountability, independence and integrity.
This was apparent in the decision by higher education minister Buti Manamela to place the National Student Financial Aid Scheme (NSFAS) under administration after reports of a leadership crisis on the board, governance failures, poor financial controls, disputes over the appointment of the CEO and board resignations.
Manamela termed the decision “temporary but necessary”. The minister has egg on his face because though he inherited the board from his predecessor, he had a responsibility to intervene immediately when he took over in July last year as there were already signs of instability brewing by then.
