SOEs need empowered CEOs, less hype on Chairpersons: MTI

MTI Consulting CEO Hilmy Cader

• Says having an empowered high-performing CEO should be Chairperson’s KPI

MTI Consulting CEO Hilmy Cader said the need for the Government to prioritise the calibre and empowerment of CEOs within State-Owned Enterprises (SOEs), arguing that they play the crucial role in running the organisations and are ultimately responsible for delivering results.

His comments come amid recent attention on the appointment of top professionals as Chairpersons of SOEs.

“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 calibre of CEOs in the SOEs because they are the ones who run the business and are responsible for the bottom line,” he added.

Cader said it is the CEOs who need to be empowered and should be the centre 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,” he explained.

He cautioned that placing too much emphasis on Chairperson’s could create false expectations that they are responsible for turning around SOE, which according to Carder is an unrealistic and potentially harmful approach. 

“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,” he said.

MTI Consulting is an international strategy consultancy that has completed 680 projects across 51 countries over the past 27 years, supported by eight regional offices.