Examining governance in South Africa: Who holds the power accountable?

Governance systems in South Africa hinge on the notion that individuals entrusted with authority will act lawfully, fairly, and with restraint. Various entities oversee, manage, supervise, and investigate entities, including boards, executives, regulators, and committees. However, the critical challenge arises when the exercise of power becomes contentious.

This issue has gained prominence in South Africa's public and corporate governance contexts, as seen through several high-profile cases where suspensions, administrative interventions, and regulatory actions have been challenged in court.

The NSFAS matter serves as a stark illustration of these governance issues. Initially placed under administration due to governance, financial, and operational concerns, the Gauteng High Court recently suspended the appointment of Professor Hlengani Mathebula as administrator and ordered the reinstatement of the board. The key question here is not whether NSFAS required urgent attention but rather whether the administrative intervention to restore order was conducted lawfully and in a procedurally defensible manner.

A similar scenario emerged in the PIC matter, where the Gauteng High Court invalidated a precautionary suspension of chief executive Patrick Dlamini, ruling that the board had acted without the necessary ministerial and Cabinet approval. This underscores the importance of clear authority, proper justification, and procedural discipline in governance. Even the seemingly innocuous label "precautionary" cannot absolve a process that lacks these foundational elements.

The RTMC matter further emphasizes this point, with the Gauteng High Court once again invalidating the precautionary suspension of chief executive Makhosini Msibi due to the board's lack of legal authority to suspend him. The court also scrutinized the board's charter, highlighting the necessity for governance documents to be under proper authority.

While suspensions are a legitimate governance instrument, their effectiveness hinges on having a clear legal basis, proper reasoning, and adherence to procedural discipline. Beyond suspensions, the Sipho Pityana matter involving Absa and the Prudential Authority sheds light on how informal influence can undermine governance. The Prudential Authority's informal process in nominating Patrick Dlamini as chairperson without following the prescribed formal procedures was deemed unlawful by the Gauteng Division of the High Court.

Regulators play a crucial role in maintaining healthy markets by protecting the interests of the public, depositors, investors, and systemic confidence. However, their authority must remain within lawful boundaries. The IDAC matter before the Madlanga Commission adds another layer to this discussion, revealing concerns about the speed, basis, and authority of certain investigative steps.

This case reinforces the notion that institutions with coercive public power must exercise extreme caution to uphold their mandate and maintain public confidence.

The SABC and Hlaudi Motsoeneng matter further illustrate the broader implications of governance failures. The Local Division of the Gauteng High Court invalidated a decision to pay Motsoeneng more than R11.5 million, declaring the decision unlawful and invalid. Former SABC board members were subsequently ordered to pay the amount jointly and severally, demonstrating that governance decisions can have long-lasting repercussions through court proceedings, audits, and recovery efforts.

Ultimately, governance instruments such as charters, suspensions, regulatory interventions, executive decisions, and board actions must be treated as binding disciplines rather than internal conveniences. Their legitimacy depends on lawful foundations, proper authority, statutory compliance, and respect for established processes. When governance instruments are circumvented or misused outside these boundaries, the very mechanisms designed to safeguard governance can become sources of failure.

In light of these cases, access to independent accountability mechanisms becomes paramount. Courts, regulators, commissions, and parliamentary oversight serve as vital checks and balances, testing legality, supervising conduct, exposing hidden patterns, and interrogating public institutions. Auditors, too, play a critical role in ensuring transparency and accountability.

In essence, governance thrives when those entrusted with power are held accountable by independent entities and are compelled to explain and justify their actions within the established legal and procedural frameworks.