The Ms Myeni Trial Shows the importance of the Separation of Powers

In this article, I highlight some of the issues of governance that receive mention in Ms Myeni’s trial. Robert Frost, in his poem “Mending Wall”, states that “Good fences make good neighbours.” The same is true for the separation of powers between shareholders, governing bodies and executive management.

The court heard of Myeni’s allegedly increasing interference with the running of the airline, as she shifted power away from the executive to the board.

She is also said to have changed the SAA supply chain management policy in 2016, to give the board sweeping power over procurement decisions.

 

“I can confirm that she (Myeni) was a non-executive. I can confirm that a non-executive member of the board never involves themselves in the executive decisions of the board. Even if the executive board is on its own, they are not allowed to involve themselves in the operational matters,” Rashaad Pandor of Rashad Attorneys told Fin24.

 

Former SAA interim CEO, Nico Bezuidenhout, on Monday detailed in court how the airline’s ex-chairperson, Dudu Myeni, interfered in the running of the flag carrier by issuing him with instructions to suspend or fire certain people.

A company’s Memorandum of Incorporation determines the role of the shareholders, governing body and the delegation to management. In general, the shareholders appoint the board, the board selects the Chief Executive Officer, who appoints the other executive team members as required.

According to King IV the “governing body assumes responsibility for providing the direction for how each governance area should be approached, addressed and conducted.

This is followed by formulation of policy in the form of frameworks, standards and plans by management to be approved by the governing body.

The governing body oversees and monitors implementation and execution by management,

and finally ensures that there is accountability for the performance in respect of each of these governance areas through reporting and disclosure.”

The governing body and executive managers have defined and separate duties. Corporate governance includes respecting the separation of power. Corporate governance leads to good performance and effective control.