How to build a PIC dream board

Eight Public Investment Corporation (PIC) directors, including chair and deputy finance minister David Masondo, have now resigned since Masondo unceremoniously suspended CEO Patrick Dlamini two weeks ago.

The implosion of PIC management, its terrible unlisted investment record, and the departure of its board provides finance minister Enoch Godongwana a fabulous opportunity to do it all again from scratch and get it right this time. He’s promised a new board by Thursday. But what, actually, should a dream team look like, and who should those board members be?

There is a danger that South Africa will answer this question in its customary way: by compiling a list of prominent people, running the names through the political mincing machine and announcing, after the usual mysterious delay, a board that looks vaguely plausible.

But this is an institution which manages R3.7-trillion of mainly public sector employees’ money, and is the largest investor on the JSE. That is not just another state company whose board can be populated with the reasonably competent, the politically convenient and the agreeably retired.

What’s more, the prognosis for how the PIC found itself in this parlous state in the first place rests ultimately on one enormous misconception: that it is the plaything of government.

It is not; it is owned by its members and should first and foremost reflect their desires.

Worst of all worlds

As it stands, the amended PIC Act provides for 10 non-executive and three executive directors. The chair must be the deputy finance minister – or another deputy minister in the economic cluster – and at least seven of the 10 non-executive positions are allocated to particular constituencies like Treasury and organised labour. Three seats go to union representatives; two from the union with the largest number of Government Employees Pension Fund (GEPF) members.

This has produced, transparently, the worst of all worlds.

The GEPF has filtered its choices through state employee trade unions that do a good job of representing their members but a bad job of supplying investment expertise. For its part, government has consistently nominated political apparatchiks, who have demonstrated themselves to be poor judges of the investment environment, demonstrably poor investors in unlisted business, heavily biased by political considerations, and poor guardians of the environment. That the PIC has managed to more or less match the performance of the JSE is hardly a badge of honour. Since it’s so large, it would be difficult not to achieve that goal.

A great board is not simply a collection of impressive CVs. It is a network. The visible asset is the director sitting at the table; the hidden asset is the director’s contact list and knowledge base. The PIC board needs to be less like a council of elders and more like a very sophisticated switchboard.

Representation is entirely defensible. The money belongs overwhelmingly to public employees, not to the government of the day, and workers should have a meaningful voice in its oversight. But there is a difference between representation and delegation.

For example, the Ontario Teachers’ Pension Plan in Canada offers a useful comparison. The Ontario government and the Ontario Teachers’ Federation each appoint five directors and jointly choose the chair. That looks, superficially, like a constituency board. But its members are explicitly required to act independently of both the sponsors and management, and in the interests of all beneficiaries. It combines representation with fiduciary independence.

The Canadian model does not magically eliminate politics. Nothing involving hundreds of billions of dollars is ever entirely free of politics. But it inserts professional filters between the politician and the appointment.

New Zealand goes further. The board of the Guardians of New Zealand Superannuation is appointed by the governor-general on the finance minister’s recommendation, but candidates first come through an independent nominating committee. The minister must then consult representatives of other political parties. The fund describes itself as operating at “double arm’s length” from government.

The SARB model

The second issue is what the board is there for.

It is not to run the business. It’s there to create the environment for the organisation to develop a culture and tradition of deep – truly deep – internal expertise.

In some ways, the history and traditions of the Reserve Bank are a good example. It too is an institution of state. But its independence is not only constitutionally entrenched, but institutionally entrenched. And its mandate is explicit and protected. The PIC’s new board should collectively understand public and private markets, fixed income, infrastructure, private equity, property, actuarial liabilities, banking, credit, corporate governance and law. That is the conventional part.

The less conventional part is now equally important.

It needs genuine technology expertise; not someone who once chaired an IT subcommittee, but somebody who understands cloud infrastructure, cybersecurity, digital payments, AI, data governance and the economics of technological disruption.

The board also needs someone who understands the economies of the world, with a tilt towards Asia. The centre of global growth, manufacturing, battery supply chains, digital commerce and increasingly capital formation is shifting eastward. A board that knows London better than Lagos, Mumbai or Shenzhen is not globally experienced; it is globally nostalgic.

There must also be expertise in climate and energy, not in the narrow, slogan-heavy sense in which South Africa debates these things, but in the harder questions of power markets, transition finance, mineral supply chains, carbon pricing, stranded assets and adaptation.

A dream team

So who should be these custodians of our public wealth?

The Currency team has proposed, just off the top of our head, a few names. This is not a closed or complete list. It’s just an illustration of how plentiful South Africa’s pool of expertise really is.

Basani Maluleke: the former CEO of (the new) African Bank and now head of Capitec’s personal-banking business. She brings law, corporate finance, banking operations, mass-market financial services and experience to what has become a large technology-driven consumer platform. She would also bring a perspective too often absent from institutional investing: what financial institutions look like to ordinary customers.

Ketso Gordhan: he runs the SA SME Fund, and would bring access to venture capital, entrepreneurship, university technology, small-business finance and the emerging ecosystem of South African fund managers. His value would not be merely what he knows about venture investing, but the network of entrepreneurs, scientists, corporates and specialist investors around the fund.

Tsepo Headbush: co-founder of Bright On Capital. He would add practical knowledge of fintech, alternative credit and the financing problems faced by smaller businesses. That is useful because enormous institutions often understand sovereign bonds better than they understand why a perfectly viable small firm cannot finance a purchase order.

Zwelakhe Mnguni, chief investment officer and co-founder of Benguela Global Fund Managers, Asief Mohamed, founder of Aeon Investment Management, and Anthea Gardner, founder of Cartesian Capital. Between them they provide real public-market and portfolio-management experience, as well as tremendous depth of experience in asset allocation, and hedge fund and market knowledge.

Jacko Maree: the former CEO of Standard Bank. He would bring formidable international banking, credit, risk and capital-markets networks. He remains deputy chair of Standard Bank, an institution in which the PIC may invest and with which it conducts business. The expertise is unquestionable; the conflict problem is obvious.

Muvhango Lukhaimane: she served as Pension Funds Adjudicator from 2013 until 2025, after previously working as the deputy adjudicator, as well as at Sanlam’s employee-benefits business. During her tenure, the adjudicator’s office cleared a substantial backlog of complaints and strengthened its role as a protector of retirement-fund members. She is a lawyer with an MBA rather than a portfolio manager.

Sello Moloko: former chief executive of Old Mutual Asset Managers. Before that he was deputy chief executive of Capital Alliance Asset Managers, having worked as a portfolio manager and analyst. He offers real institutional asset-management experience, employee-benefits knowledge, portfolio construction, corporate governance and familiarity with the investment industry’s talent networks.

Nicky Newton-King: she spent 23 years at the JSE, including eight as chief executive, after beginning her career as a lawyer at Webber Wentzel. Her expertise spans securities law, exchange regulation, corporate governance, market infrastructure and responsible investment.

Leila Fourie: she was Newton-King’s successor, whose particular contribution would be financial-market technology, payments, operational resilience, cybersecurity, exchange infrastructure and the international evolution of capital markets.

Trevor Manuel: the former finance minister would bring public finance, sovereign-risk analysis, international financial networks, government experience and serious boardroom authority. He also understands the distinction between the state’s fiscal needs and the fiduciary obligations of a pension institution.

Michael Jordaan: he led FNB for approximately a decade until the end of 2013 and became closely associated with the bank’s digital transformation and innovation strategy. He would add digital banking, fintech, payments, technology investment, entrepreneurship and experience building innovative organisations inside a regulated financial system.

Themba Gamedze: is a fellow of the Actuarial Society of South Africa and one of the country’s pioneering black actuaries. He supplies something indispensable: an understanding of the liabilities against which the PIC’s assets are invested.

Sizwe Nxasana: a chartered accountant who founded one of South Africa’s early black-owned audit practices. He subsequently led Telkom through its listings in Joburg and New York, and served as FirstRand chief executive until 2015. Since leaving banking, he has focused heavily on education and social investment.

Then South Africa might also consider some foreigners, like former Japanese GPIF investment chief Hiromichi Mizuno, who could bring experience of managing vast pension assets, long-term allocation and global stewardship. Suyi Kim, formerly CPP Investments’ global head of private equity and before that its Asia-Pacific head, would bring rare knowledge of Asian markets, private capital, infrastructure, real estate and global manager networks. Arunma Oteh, the former World Bank treasurer and Nigerian securities regulator, combines African capital-markets experience with direct connections to central banks, sovereign funds and international financial institutions.

The PIC doesn’t necessarily need to place all of them on its formal board. It could establish a standing international advisory council, meeting several times a year, with access to board papers on strategic matters. The important thing is that international advice must be institutionalised. It cannot consist of directors attending Davos, collecting lanyards and returning with photographs.

And who shouldn’t be appointed? First, no serving party officials. No person whose principal qualification is proximity to the minister. No habitual collector of state-company directorships. No investment promoter seeking PIC money. No director who would be recused from half the agenda. And no former minister who is looking for somewhere comfortable to complete the journey from cabinet to retirement (Hello, Gwede Mantashe).

The next board must therefore be more than 13 respectable people seated around an expensive table. It must be a system: representative but independent, local but globally connected, financially expert and technologically awake, and sufficiently confident to tell both an ambitious dealmaker and an insistent minister to take a hike.

Now that would be doing it right.

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