South Africa’s opposition Democratic Alliance has proposed legislation to overhaul the governance of the Public Investment Corporation. The party said the state asset manager’s latest leadership crisis shows the need to remove political influence over its board.
The corporation faces mounting scrutiny after Chief Executive Patrick Dlamini was suspended pending an investigation into allegations raised by a whistleblower. South Africa’s financial regulator has also launched a governance probe.
The asset manager’s board has given no details of the claims and has said the suspension did not amount to a finding of wrongdoing. Dlamini could not be reached for comment.
The Public Investment Corporation (PIC) manages more than R3 trillion ($182 billion) in assets on behalf of government employees and is one of Africa’s largest asset managers.
Pension Protection Bill
The DA’s Mark Burke said in a statement on Monday that the party had submitted its proposed Pension Protection Bill to parliament’s constitutional and legal services. He added that they planned to formally table it after receiving legal feedback.
The DA has 87 or about 22% of seats out of a total of 400 in the national assembly.
Under the proposal, Parliament’s Standing Committee on Finance would appoint an independent selection panel to shortlist candidates for non-executive director positions. The panel would recommend candidates to the finance minister based on merit and the skills required by the board.
While the minister would retain the power to reject nominees, he or she would be prohibited from appointing directors not recommended by the panel. Executive directors would be appointed by the board rather than the minister. Furthermore, the board would elect its own chairperson from among its non-executive members.
Pension investments ‘not supposed to be political’
“Pension investments are supposed to be boring. They’re not supposed to be political,” Burke said. “The Pension Protection Bill seeks to rectify an unacceptable situation that has cost public servants billions.”
The changes would directly affect the current governance structure, under which Deputy Finance Minister David Masondo serves as PIC chairperson. The bill would also bar anyone holding political office, or who had done so within the previous three years, from serving on the board.
The Democratic Alliance argues that the current arrangement undermines the institution’s independence and has contributed to recurring governance failures at the PIC.
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- South Africa's Democratic Alliance (DA) has proposed the Pension Protection Bill to reform the Public Investment Corporation (PIC) governance and reduce political influence over its board.
- The PIC faces scrutiny after CEO Patrick Dlamini was suspended amid whistleblower allegations and an ongoing financial regulator investigation.
- The DA's bill seeks an independent selection panel to recommend board non-executive directors based on merit, limiting the finance minister's appointment powers and barring recent political officeholders from board membership.
- The bill would allow the PIC board to appoint its chairperson from non-executive members, and executive directors would be appointed by the board instead of the minister.
- The DA criticizes the current governance as politically influenced and harmful, costing public servants billions, and aims to ensure pension investments remain independent and apolitical.
While the minister would retain the power to reject nominees, he or she would be prohibited from appointing directors not recommended by the panel. Executive directors would be appointed by the board rather than the minister.
"Pension investments are supposed to be boring.
ALSO READ: PIC board breaks silence after FSCA launches probe
