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It is crucial for the survival of an enterprise like South African Airways (SAA) that its board and top management are extremely steadfast.
This according to economists after it was revealed in Parliament on Monday that SAA had paid R22.7 million in severance packages to seven CEOs and six CFOs since 2005.
Mike Schüssler, economist at Economists.co.za, says South African taxpayers would have been saved billions of rands over this period had the SAA senior top management not been replaced so often.
“SAA needs stability. CEOs come with their own plans, style and consultants and it begs the question whether any plans of former CEOs have been implemented in full if the position is changed so often.
“In addition SAA is stuck with a board chairperson [Dudu Myeni, who has close ties with President Jacob Zuma] who thinks she can operate an airline.”
Professor Jackie Walters, transport economist at the University of Johannesburg, says any company that suffers as many dislocations with its CEOs and board as SAA has will be plunged into instability.
“The constantly changing CEOs also create a lack of institutional memory, which in itself can have an enormous impact on the survival of the enterprise.”
For that reason, says Walters, it is of utmost importance that the SAA board also be stable, especially since the board appoints the CEO.
“The CEO doesn’t make a company what it is on his or her own and for that reason there also has to be stability and continuity in the board. That makes the chairperson of the SAA board also very important in the long term.”
