1 August 2010

Strengthening SABC Governance

Resolving the Present SABC Crises

The SABC has been experiencing ongoing corporate governance crises since late 2007 when there was political interference in the appointment of the Board. This eventually lead to the removal of the Board, its replacement by an interim Board in mid-2009 and the appointment of a new Board that took office in January 2010. During these crises the SABC lost close to a R1 billion (during the 2008/2009 financial year) and was forced to seek government guarantees of R1.47 billion. (See sections below for further details.)

After some progress under the interim Board in 2009, problems flared up again in 2010 around the SABC Board Chair's unilateral appointment of the Head of News. Also, there were problems with the CEO, Mr. Solly Mokoetle. He was suspended and paid out (in early 2011) after he allegedly failed to deliver on, amongst a number of issues, the SABC's turnaround strategy.

Now in 2011 further problems are unfolding... 

SABC Board member, Peter Harris resigned without giving reasons (30 June 2011). Newspapers alleged that it was around Ministerial interference as regards the appointment of a new permanent CEO.

Further the SABC appointed, as of 1 July 2011, Mr. Phil Molefe as acting CEO. Outgoing Acting CEO, Robin Nicholson sued the SABC for breach of contract because he claimed he was promised a further 6 months contract.

In October and November 2011, a number of other crises have exploded including:

• A R20m car scandal
• The improper hiring of Mr. Justice Ndaba as head of the turnaround strategy

Please see sidebar for SOS's letters to the SABC Chair, board members, the Portfolio Committee and the Minister of Communications requesting information on the above crises including the reasons why a permanent CEO, COO and CFO have not been appointed.

Previous governance problems - appointment of the head of news in 2010

In May 2010 Dr Ngubane unilaterally appointed the Head of News, Mr Phil Molefe in contravention of the Broadcasting Act, 1999, the SABC's Articles of Association and the SABC's own internal processes and protocols. The remaining 11 non-executive Board members declared this decision null and void. They also claimed that there had been an irretrievable breakdown of trust in their relationship with him.

Unfortunately, the oversight structures did not strongly or timeously intervene. After numerous failed attempts at calling a hearing, Parliament eventually debated the issues in late November 2010. ICASA maintained a defeaning silence on all SABC crises, arguing that these were "internal matters". Previous Minister, General (Ret) Nyanda, intervened but did not deal with the breach. He argued incorrectly, that the problems merely revolved around petty, personal disagreements amongst board members. Four board members resigned in protest. Those who remained eventually ratified the appointment. However, it was an uneasy decision with certain members voting against it.

In the meantime a new crisis was developing - Board members suspended CEO Solly Mokoetle. They had lost trust in him when he had supported the Chair's unilateral appointment.  But further, the Board claimed that Mokoetle had failed to draft a critical turnaround strategy for the SABC to allow it to pay back the almost R1bn debt it had accumlated in the 2008/2009 financial year. However, Dr Ben Ngubane distanced himself from the Board's decision. He claimed that Mokoetle had not been given sufficient time and support to complete the task.

Crises also developed around the appointment of an Acting CEO. The SABC's Articles of Association were clear that it needed to be an internal candidate and that the person needed to be an executive of the SABC. The SABC''s Chief Financial Officer, Robin Nicholson was thus the only suitable candidate. (Other execs were in an acting position.) The Board moved to appoint Mr. Nicholson. Minister Nyanda however intervened to state that he was not happy with the appointment. The Board then announced that it would ask the Minnister to redraft the Articles of Association to allow the SABC to employ an external candidate.

SOS strongly objected claiming that it was inappropriate for the Board to be calling for the Articles of Association to be redrafted willy nilly. If the Articles were to be redrafted this needed to be a comprehensive review and not because they were presently inconvenient. Further, SOS stated that Minister, Nyanda's interventions were exacerbating the crisis - Board members had no choice but to appoint Nicholson. Further, it was inappropriate for the Minister to be intervening in the management of the SABC. The Chair of the Board then, under pressure, eventually appointed Nicholson as acting CEO.

Resolving the governance crises in 2007/2008/2009

A major governance crisis arose at the SABC in 2007 and has continued unabated. The initial crisis was precipitated by direct Presidential interference in the appointment of the 2007 SABC Board.

From the start the 2007 Board lacked legitimacy and found it difficult to hold management to account. Major battles then ensued between management and the Board. The Board suspended and re-suspended the CEO. The CEO fought back - and as the stand-off between the two parties deepened, the financial situation at the SABC started to deteriorate. (Eventually by the end of that financial year the SABC had lost close to a billion rand.)

In July 2008 Members of Parliament introduced the Broadcasting Amendment Bill. The Bill’s primary purpose was to introduce clauses to remove the Board. (The Broadcasting Act, 1999 did not allow for removal of Board members except if Board members agreed to remove one of their own.)

SOS Coalition members stated that piecemeal amendments to the Broadcasting Act were not ideal and that  a proper legislative review process was well overdue. However, given the fact that this would take time and that the SABC governance crises were deepening daily, SOS agreed to support some immediate amendments. These focused on issues around the removal of individual board members, the removal of the Board as a whole (in exceptional circumstances), and importantly new appointment criteria and processes.

The Broadcasting Amendment Bill was passed in early 2009. SOS was disappointed to see that it focused entirely on removals and not also on appointments.

Using this amendment, Parliament eventually removed the Board in mid-2009 and an interim Board was appointed for a six month period. The role of the interim Board was to stabilise the SABC. The interim Board negotiated a R1.47 bn government guarantee to assist the SABC to pay off its debts including to independent producers. (The cash-strapped broadcasters had stopped paying producers and commissioning new programming.)

SOS then threw its weight behind the appointment of a new permanent SABC Board. The process in the main was a very democratic, participatory process with civil society putting forward approximately 200 names.

The new Board took office in January 2010. Expectations from civil society were high but sadly problems quite quickly ensued. See above.