Are SOEs career killers for prospective CEOs?

The unprecedented level at which state owned enterprises have claimed the scalps of many chief executive officers has made the public enterprises space a dangerous territory for those aspiring to be in the driving seat of these entities. 

The SOEs sector’s propensity to hire and fire individuals also finally got to the nerves of the SOEs minister, Leon Jooste who sort to put a lid over suspensions of CEOs on full pay.

“As the minister responsible for public enterprises, I want to put it on record that I expect to see an immediate end to this unwanted practice,’ the minister said then.

However, Namibia has seen a significant number of cases involving suspended CEOs some of which where implicated in corruption scandals.

The most recent one is the suspension of the Business and Intellectual Property Authority’s Tileinge Andima over an allegedly inflated N$18 million figure for the purchase of an old gambling house in Katutura. 

  At TransNamib, Sara Naanda is reported to have been part of a board meeting that brought the axe down on former CEO Titus Haimbili's head. This prompted her rise to the position under circumstances that raised eye brows two years ago. 

Although she would later publicly deny that she was not part of this appointing process, the same axe that chopped Haimbili would later be used to ruin her career at the rail entity not more than a year of taking over. 

Again, the rise of Hippy Tjivikua to the same thorny seat was cut short after he was suspended and later fingered for having allegedly committed fraud involving N$60 million.

Visiting professor at the University of Cape Town, Henning Melber, believes that the fact that most parastatals' CEO positions are hot seats has a lot to do with governance issues by those in control. 

“I think it is good that CEOs of SOEs are reminded that their business is to promote the SOEs and not spend time for business on the side,” he says.

Stinking corruption allegations at the Namibia Airports Company claimed the head of Tamer El-Kalawi, again bringing his career to an undignified halt at the company.This was not after former CEO Ben Biwa was again shown the door a year after his rise to the helm of the company after he had left his job as director of financial markets at the Bank of Namibia.While many still vie to sit on the thrones of these entities despite them appearing to be cursed, it seems the money flaunted in their faces is impossible to resist. 

“They are highly paid (higher even than the political office bearers, including the Head of State). This allows to expect them to fully devote their time and energy for the benefit of the company, which as a public enterprise is run by taxpayers’ money. If that money is wasted while CEOs and other high-ranking officials in the company focus on their private business, they deserve to be sacked for a conflict of interest and non-performance.,” says the professor. 

Others have observed that public enterprises’ hiring and firings make the most headlines and are at a faster pace than those in the private sector. 

It is a view that has, however, been disputed by professor Danny Meyer.

“A simple answer would be that what goes on at (an) SOE is in the public domain as the entity belongs to the Nation. People have the right to know. In turn goings-on at a private firm will only affect the shareholders and resultantly is unlikely to hit the media, unless it is a public company listed on the stock exchange. Then the board will have to report to the shareholders and this would normally be done in the form of a public announcement,” he reasons. 

Theo-Namases’ dream of staying on the pinnacles of one of the most important public companies in the country, AirNamibia brought her a nightmare of being sacked after being charged with 17 counts of misconduct. 

 After heading NamPower for more than a decade, Leake Hangala was found turning his back on the power utility following accusations he had exceeded his signing authority in a N$65m power-line contract, despite sidestepping the company’s N$20m limit regulations in 2005.

At the Road Fund Administration (RFA) Penda Kiiyala had to face the music and be dragged before a disciplinary committee for misconduct and before the matter could be resolved, he penned a resignation letter only to later join Rossing Uranium.

The same fate would meet Tobie Aupindi at the Namibia Wildlife Resorts who tried his luck in the private sector instead, where he appears to have been successfully entrenched. 

Former Roads Contractor CEO Kelly Nghixulifwa also gave up his position at the helm of the parastatal after a four-month suspension, hitting hard times. 

Yet professor Melber reasons that SOEs are no to blame for crippling people’s careers saying that it is rather the opposite: “If someone has the ambitions to become a CEO, then the career killer is to be not a hundred percent loyal to the company alone, in return for a very fat salary.” 

“As regards the difference to the private sector: in the private sector companies are either family owned or by shareholders. They will have a look at the performance of the managers and it is for them to decide if they deserve the salary.”

“SOEs are - as the name indicates - owned by the state and funded with public money from revenue. The state therefore is supposed to represent the interests of the ordinary taxpayers. If money is wasted, the state has an obligation to intervene. Namibian government has been far too lenient until recently, and it is high time that this is changed,” he adds.   

Melber affirms that there is a need to turn around the culture of appropriation of public funds for private gains.

“I fully support the stricter control over CEOs and other high ranking officials, who use their overpaid positions to gain even further wealth through unrelated private businesses.”

“What also needs to be changed is the suspension for a very long time with continued salaries and other benefits. If a CEO is suspected of any wrong-doing, the suspension should imply that if found guilty as from the very first day of suspension, not a single Namibian Dollar is paid any longer. So far, even those who violated the employment contract were treated far too generous,” he explains.

Without referring to any particular case of a fired CEO, Meyer asserts that SOEs kill careers for those who naively believe they have a job where the employer works for them and not they for their employer.

 Yet the same does not happen for those who, “Take their work responsibility seriously and accept that they as management and as the leadership of an organisation will be held accountable for words, deeds and action.”

To what extent then do these unprecedented firings spook prospective professionals with a dream of landing a government office top job?

 Says Meyer, “Not at all. The serious and success driven professional will see the career prospects and possibilities for promotion, if they work productively always adhering to ethics and honesty.”