De Ruyter reveals why he quit Eskom
Former Eskom CEO André de Ruyter said that micro-management by public enterprises minister Pravin Gordhan and overreach by the power utility’s newly-appointed board had played roles in his decision to leave the company.
These admissions formed part of his answers to questions during a meeting of Parliament’s Standing Committee on Public Accounts (Scopa) on 26 April 2023.
De Ruyter was asked whether the Department of Public Enterprises and the minister at its head, in particular, had made it difficult for him to do his job.
The former CEO said there were examples of apparent micro-managing interventions by Gordhan in the day-to-day operations of Eskom.
“I think Mr Gordhan is known for a style that can be characterised as being extremely involved in operational detail,” said De Ruyter.
He explained that Gordhan would look for highly specific details about Eskom’s operations, including data about individual power station units.
In addition, the minister spoke directly to middle-ranking officials in the organisation, bypassing senior executives like De Ruyter, chief operating officer Jan Oberholzer, and Eskom’s head of generation.
“Whether that was to gain information or to verify information, I don’t know, but it made life as the responsible accounting officer quite difficult,” De Ruyter stated.
“[Having] many different cooks in the kitchen does not always result in a good meal.”
Pravin Gordhan, Minister of Public Enterprises
De Ruyter was also asked if the recently-appointed Eskom board, chaired by Mpho Makwana, had played a role in his departure.
The board was appointed in September 2022 and tasked to increase the utility’s energy availability factor (EAF) to 75%, which some experts believed was setting it up for failure.
That is because non-executive board members have little to no say over the operational matters of the companies they oversee.
In Eskom’s case in particular, improving the EAF would depend not only on the work of Eskom’s management but also on that of the Departments of Public Enterprises and Mineral Resources and Energy departments.
De Ruyter’s feedback to Scopa suggested the new board did not have a firm grasp on how good corporate governance worked.
“It certainly made my life quite challenging. Meetings were held with subordinates of mine without my knowledge, and instructions were given [to them],” De Ruyter said.
“I experienced this as disempowering. I know certain colleagues on the executive committee had similar experiences.”
“The executives are the people who should run the company and should be held to account to the board’s oversight.”
Mpho Makwana, Eskom chairmman
In contrast to his experience with the new board, De Ruyter said he had a positive relationship with the previous interim board chaired by Malegapuru Makgoba.
“I was of the view that they held management and the executive — including myself — to account in a critically constructive way. It was certainly not plain sailing,” De Ruyter said.
“I think their activities and work were limited by a lack of capacity, as you know they had a number of vacancies on the board that were not filled for a number of years.
“That gave rise to key committees being severely depleted of board members to participate in deliberations and make decisions.”
“But — all in all — I think that the Makgopa board understood the principles of corporate governance and understood the role of non-executive members providing oversight and acting accordingly.”
De Ruyter claimed that the new board had adopted a markedly different approach than the interim board.
“It has become a self-styled engaged board, or activist board, and has immersed itself in operational detail which some would characterise as an overreach for a non-executive board,” he said.
Makwana has not shied away from criticising De Ruyter, labelling his decision to raise accusations of corruption at Eskom involving ANC minister and politicians in the now-famous interview with eNCA’s Annika Larsen as “reprehensible”.
He also accused De Ruyter of “chasing renewables” instead of focusing on fixing existing coal power plants and avoiding a performance review with his early resignation.
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