Statement by Andrew Bateman MP – DA Deputy Spokesperson on Appropriations:
The resignation of Public Investment Corporation (PIC) Board Chairperson David Masondo is a significant development, but it is not enough to restore confidence in the institution entrusted with managing over R3 trillion of government employee pension savings and workers’ funds.
In the last few weeks, the PIC has descended into an unprecedented governance crisis.
The suspension of the CEO and Chief Investment Officer, whistleblower allegations, the Financial Sector Conduct Authority investigation, the resignation of non-executive directors, and now the resignation of the Board Chairperson signal a resounding breakdown in corporate governance.
New directors will be required to chart a difficult course to restore confidence, but changing the board without changing the law will not fix the PIC.
The governance framework that allowed this crisis to develop must be reformed.
If we fail to address the causes of the PIC’s institutional decay, South Africa will relive the same crisis every few years.
That is precisely why the DA has introduced the Pension Protection Bill, which has already been submitted to Parliament’s legal services.
The Bill implements long-overdue governance reforms recommended by the Mpati Commission, including:
- requiring the PIC Board Chairperson to be an independent, non-executive person rather than a serving politician,
- ensuring that board appointments are based on merit and the necessary skills, and
- reducing opportunities for political interference in the management of public servants’ retirement savings.
The short-term priorities are to stabilise the PIC, appoint a credible and suitably qualified board, and ensure that ongoing investigations are allowed to proceed without interference.
Regaining public trust will also demand full transparency in respect of the implementation of the Mpati recommendations and the PIC’s unlisted ‘Isibaya’ portfolio.
The most strategic intervention that is required, however, is to implement the structural reforms that are needed to prevent another governance crisis in the future.
Parliament must seize the opportunity presented by this crisis to ensure it does not recur.
South Africa’s teachers, nurses, doctors, police officers and other public servants have entrusted the PIC with their retirement savings.
They deserve an institution governed with independence, professionalism and accountability.
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