Eskom’s search for a new CEO could be long and tough

State-owned power utility Eskom, which last week confirmed the resignation of its CEO André de Ruyter, could be in for a lengthy search to find his replacement, experts have said.

De Ruyter joined Eskom in December 2019 and will remain its CEO until the end of March next year. Until then, its board will be on the hunt for the next CEO, in a recruitment process that looks set to confront several challenges, including the timing of De Ruyter’s resignation and Eskom’s reputation.

Dr John Wentzel, CEO of listed recruitment giant Adcorp, says one of the challenges presented by the timing of De Ruyter’s resignation is that it coincides with the festive holiday season, when many head-hunting firms have closed.

“The second thing that Eskom sits with, unfortunately, is the reputation that it has [developed] over the last decade,” says Wentzel.

Eskom has had 10 CEOs in the past 10 years – including current board chair Mpho Makwana, Phakamani Hadebe, Sean Maritz and Jabu Mabuza.

Its high executive turnover has tarnished the entity and is off-putting for potential CEOs.

Eskom is also battling to attract critical engineering and power generation skills.

Utility needs to ‘get its house in order’

Eskom is uncertain about its future, says Wentzel – “so it may take them longer to identify candidates, and that’s just going to delay the process”.

“I think they are going to face a challenge, because of what’s happened, in finding candidates who are putting their hands – unless the state of course already has some candidates in mind.”

He adds that Eskom’s struggles in attracting and retaining skilled candidates is not an irredeemable situation; it just needs to “get its house in order”.

“Eskom was always a great company to work for, and it can be a great company to work for again,” says Wentzel.

“But what [it] really needs to do now is bring stability into its leadership … it needs to bring certainty into its decision making.”

Typically, appointments to C-suite positions at state-owned entities may take up to three months, excluding the notice period the elected candidate may have to serve.

The board appoints a recruitment firm, a mandate is issued, and the preferred candidate is then tabled for the related minister to approve.

Read: New Eskom board member identified as source of PPC market-sensitive media leaks

Under scrutiny 

Besides searching for a candidate who has a deep knowledge of the energy sector and Eskom itself, the entity has the added challenge of securing an individual who is comfortable enough operating within a highly politicised environment.

De Ruyter has faced many detractors in the three years he has been at the helm of Eskom, including the Black Business Council, the National Union of Metalworkers (Numsa) and the general public.

A week before he tendered his resignation, Mineral Resources and Energy Minister Gwede Mantashe launched an attack on Eskom – effectively its CEO – saying the power utility was attempting to overthrow the government by failing to end load shedding.

Read: De Ruyter’s ‘removal through inaction’ is similar to Zuma killing the Scorpions

Mantashe said Eskom was “actively agitating for the overthrow of the state” with continued implementation of load shedding.

De Ruyter later cited a lack of support as the main reason for his decision to part ways with Eskom.

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Poisoned chalice

EE Business Intelligence MD Chris Yelland tells Moneyweb suitable candidates may view the position of Eskom CEO as a poisoned chalice, given the expectations surrounding the role – such as stabilising its finances and operations, which have been critical for many years.

“There’s no way we can expect a miraculous saviour to solve all our problems. We shouldn’t have undue expectations of a saviour coming along from the new CEO,” Yelland says.

He believes it could take six months or longer to find a replacement, saying the individuals with the right kind of credibility would come with a long list of conditions.

“They will want cast-iron guarantees that they can implement what they need to, irrespective of the political populism and constraints that have been seen in the past.”

One, two, three …

De Ruyter will leave Eskom on 31 March next year.

Eskom COO Jan Oberholzer is due to go on retirement in April.

And acting Group Executive for Generation Rhulani Mathebula resigned last month.

These three departures leave Eskom with a leadership vacuum it cannot afford to have.

Read: The impossible job at Eskom that no one wants