Public enterprises minister Malusi Gigaba yesterday announced the appointment of a new chairman and six other non-executive board members for Broadband Infraco.
The board changes were announced at a Special General Meeting of the company.
Mandla Ngcobo was named the new chairman, according to the Department of Public Enterprises (DPE).
He is an admitted attorney and has worked as CEO of Telkom Media. He also served on the boards of the 2010 Soccer World Cup Bid Committee and the 2010 Soccer World Cup Local Organising Committee.
Management rotation
Nadia Bulbulia, former councillor of the Independent Communications Authority of SA, was named as one of the directors. The DPE says her skills are policy-making, strategy, corporate governance and ICTs.
Salim Essa has skills in economics and risk management; Meta Maponya is a qualified chartered account; Anthony Githiari has skills within strategy, business development and ICTs; Xoliswa Kakana is skilled in ICTs and telecommunications; and Nokuthula Selamolela has proficiency in finance and ICT.
The new directors and chairman succeed the outgoing non-executive chairman, Andrew Mthembu, and non-executive directors Nolo Letele and Cornelius Groesbeek.
The department says two non-executive directors, namely Sydney Mabalayo and Shakeel Meer were reappointed.
There were five vacancies on the board, four of which have now been filled.
“Three of the previous non-executive directors had already served for four years, and their terms of office expired in July this year. These three and two others were due for rotation at the Infraco Annual General meeting last month. They were reappointed at the AGM subject to the review, which was under way at that time,” says the department.
Gigaba says the strengthening of the board of directors opens a new chapter in Broadband Infraco's story.
He explains the new board has been strengthened in areas of technical, regulatory and financial supervision. “This would ensure that, together with a complementary strengthening of the company's executive management capacity and governance oversight, Infraco's performance would be lifted, enabling it to fulfil its developmental mandate,” says the DPE.
Multiple portfolios
Gigaba also set out the department's policy on the composition of boards of state-owned companies, and the factors guiding the appointment or retirement of directors.
These included the need to attract skills relevant to a particular industry, and to match those skills with other disciplines required for an efficient board; the need for a regular review of boards of directors, as required by the King III report on corporate governance; and the need for boards of state-owned companies to reflect the demographics of the country, based on age, gender and race.
“While King III provides for directors to serve a three-year term, Infraco's articles provide for the appointment of directors for a period of one year at a time. For business continuity, this will be extended to two terms, subject to the minister's prior approval and subject to review at the annual general meeting,” adds the department.
It also says a new requirement is that members should not sit on more than four boards subject to an assessment of the scarcity of the skill needed, and that the chief executive may not serve on the boards of other state-owned companies.
“The department does not want directors over-committed with less time to attend to activities or functions because they serve on multiple boards.”
Huge loss
The state-owned company was tasked with bringing down SA's telecommunication costs by making long-distance communications infrastructure available to competing private sector companies.
Gigaba says Infraco was established in December 2007 with a mandate to focus on developing a new high-capacity national long-distance fibre-optic telecommunication infrastructure and new high-capacity marine cable infrastructure. It was to make these available on a broad basis, at sustainable cost-plus levels, to the benefit of private sector telecommunications companies.
The minister notes a 2010 World Bank study that found in low- and middle-income countries, every 10 percentage point increase in broadband penetration accelerates economic growth by 1.38 percentage points.
“Continued government ownership of Broadband Infraco is aimed at ensuring that international connectivity pricing remains competitive in particular through its investment in the West Africa Cable System, and that broadband penetration is increased especially in underserviced areas through the continued expansion and enhancement of its national long-distance network.”
At the company's AGM in September, it was revealed that Infraco generated lower than expected turnover of R297 million, posted a net loss of R207 million, and incurred irregular expenditure to the cost of R151 million in the 2010/11 financial year.
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