Having an empowered, high performing CEO should be the Chairperson’s KPI

It is certainly encouraging and augurs well that the Government has brought in top professionals of high integrity to be Chairpersons of SOEs. However, the Government should pay greater attention to the caliber of CEOs in the State-Owned Enterprises (SOEs), because they are the ones who run the business and are responsible for the bottom line. It is the CEOs who need to be empowered and should be the center of attention, not the Chairpersons.

In most cases, the role of the Chairperson is a non-executive position, which means from a governance point of view, their involvement in the business should be limited to strategic decisions, ensuring corporate governance, and doing so via the board of directors. Having an empowered, high performing CEO should be the Chairperson’s KPI. If not the Chairperson would not have delivered on his / her basics.

By creating so much hype around the appointment of chairpersons, it creates a false expectation that the Chairperson is the one who will turn around the SOE, which is an unrealistic expectation. It can also pressure or tempt these Chairpersons to start getting involved in operational aspects, which should be out of bounds for Non-Executive Chairpersons.