How to manage a company and how not to

The governance and management crisis in our state-owned enterprises will eventually lead to their collapse, says Peter Hughes. But people in glass houses shouldn't throw stones. How is your organisation doing?

- Peter Hughes

Imagine you're managing a subsidiary of the listed company, ABC Corp. Let's call it XYZ, It has its own board of directors and your boss is the chairperson. XYZ has not been doing well lately due to factors entirely out of your control.

One morning you open the daily newspaper, and there’s a statement by a senior director of ABC blaming you personally for the poor performance of XYZ, insinuating that you have been sabotaging the company.

You expect to receive a speedy call from your boss about this scandalous statement, but there’s not a word from any of your superiors.

Then, out of the blue, ABC appoints one of its directors to oversee the performance of XYZ, usurping the role of your chairperson. You finally contact your boss, and find him as upset as you are. He says he’ll take the matter up with the ABC board, but you hear no more from him.

The appointed ABC director is soon snooping around the company, bypassing you and your boss. The chairperson of ABC, the ABC director and the XYZ chairperson are soon at each other’s throats, trading insults and allocating blame.

Sound familiar? To a greater or lesser degree, it’s something likely to be happening in most of the 300 South African state-owned enterprises (SOEs).