New Eskom CEO a surprise pick as questions arise
The appointment of Andre de Ruyter as the new Eskom chief executive officer (CEO) came as a ‘dramatic’ surprise, with concerns over his ability to lead the crisis-hit power utility, says capital markets and financial services research house Intellidex.
De Ruyter, who will leave packaging group Nampak to take up his new post in January 2020, is being given the benefit of the doubt from several quarters, including politicians within the ANC and opposition DA, and leaders in business in South Africa.
However, Intellidex analyst Peter Attard Montalto questions whether this benefit is warranted.
According to Attard Montalto, the Nampak CEO is little known in Eskom and related circles, does not appear to have made any particular interventions in recent years on Eskom or related energy policy, and it is unclear he has consulted anyone in the wider energy and energy policy space.
“Hence it has been a rather dramatic surprise that he has suddenly being appointed as Eskom CEO,” the analyst said.
“We have attempted to garner the temperature on de Ruyter from former colleagues and others, and have really struggled to find any significant net positive balance of sentiment towards him.
“Overall views are exceptionally mixed and not what you would expect from someone appointed to such a challenging and crucial job. There do not seem to be any strong advocates for him, indeed even the Department of Public Enterprises statement does not exactly seem to sell him strongly,” he said.
While a narrative has emerged of de Ruyter having experience in turning businesses around, Attard Montalto noted that Eskom is unparalleled in the issues that it faces, and the group simply does not have time for on-the-job learning.
“Eskom has had 10 CEOs in 10 years and has strict deadlines set in the Eskom roadmap. De Ruyter starts on 15th January which gives little time into major deadlines into month end. Put simply there is little reason to given benefit of the doubt. Actions will be judged from the get go,” he said.
De Ruyter’s appointment comes as a particular surprise as former Eskom employee Andy Calitz, who has extensive experience in the energy sector, was seen as the front-runner for the position, even as recently as a few weeks ago.
According to the Department of Public Enterprises, the recruitment process took two forms, a head hunting process and a public advert placement for external and internal participation.
The following process was followed:
- The search agency received a list of 142 potential candidates, including eight Eskom employees.
- First shortlist of 17 individuals was formulated and interviewed by the agency. From that 17, eight potential candidates withdrew as they did not wish to make themselves available.
- The Board interviewed 6 candidates.
- Four candidates were requested to undergo competency tests.
- The final interview process was undertaken, after which the panel ranked three candidates from six.
- After further interviews a list of three candidates, with the indication of a preferred candidate was submitted to the shareholder in terms of the Memorandum of Incorporation (MOI) between Eskom and the government.
- The president appointed a team of cabinet ministers to consider the Boards recommendations.
- The Ministers concurred with the Board’s recommendation.
Market reaction to de Ruyter’s appointment has been mixed – neither positive or negative, for now – while many wait and see where Eskom will be going under his leadership.
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