Parastatals in dire need of independent outcomes committees

Right now, as with any state entity, they are subject to the Public Finances Management Act which is not only effective but something from which the private sector could learn. This act insists on independent outcomes committees being appointed to all state-owned entities and, while these have varied from extremely efficient to hardly efficient, they are limited in their capacities to predict crises.

Predicting outcomes

An outcomes committee, though, is not made up largely of accountants and auditors but rather of business and marketing people who are able to look at all policies and decisions under consideration by boards of directors, with the specific mandate of examining all possible outcomes and how these would affect the entity. With the objective of nipping crises in the bud.

For example, an outcomes committee for South African Airways (SAA) would look at a decision say, to retrench staff as a cost-saving measure, and then predict the impact that this move would have on service and the potential to draw new customers. Or, predict potential repercussions marketing campaigns could elicit from competitors, such as the current litigation brought against SAA by Comair and Nationwide.

As far as, say, the SABC is concerned, an independent outcomes committee could be an extremely useful tool in terms of being able to represent the public at large to allay wrong perceptions and also to be able to predict the impact of staff appointments on corporate credibility and so forth. The current situation at the SABC could keep such a committee extremely busy on all manner of controversial issues.

Public companies

These are just two of the many advantages that independent outcomes committees could have on boards of directors of state-owned organisations. For that matter, they could be equally applied to public companies as well. In essence, the objective would be to predict reactions and create a bridge of understanding and perception management between the organisation and its publics and stakeholders.

Outcomes committees don't have any right of veto or legal standing, but they do inevitably have an extremely influential voice if they are truly constituted from independent specialists and not just loaded with political appointees.