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Eskom Conversion Act, 13 of http: The Board is responsible for providing strategic direction and leadership, ensuring good corporate governance and ethics, determining policy, agreeing on performance criteria and delegating the detailed planning and implementation of policy to the Executive Management Committee EXCO.

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Nersa tenders dating conversion of Eskom provided an ideal opportunity to review Eskom's existing governance structures and to design a more effective and streamlined decision-making process.

The compact serves to promote and encourage good governance practices within Eskom, by assisting to clarify the respective roles and responsibilities of the Board and the shareholder, setting out the circumstances when shareholder approval is required, when the shareholder needs to be consulted, and the remaining areas where the Board is duly empowered to direct the organization.

Shareholder compact In terms of the Treasury Regulations issued in accordance with the PFMA, Eskom must, in consultation with its executive authority the Minister of Public Enterprisesannually conclude a shareholder compact documenting the mandated key performance measures and indicators to be attained by Eskom as agreed between the Board of Directors Board and the executive authority.

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Compliance, not only with the letter but also with the spirit of relevant governance codes, remains a priority for the organization. Furthermore, the statutory duties, responsibilities and liabilities imposed on the directors of Eskom by the Companies Act, 71 ofas amended, are augmented by those contained in the Public Finance Management Act, 1 ofas amended by Act 29 of PFMA.

A structured approach is followed for delegation, reporting and accountability, which includes reliance on various Board committees.

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The shareholder representative is the Minister of Public Enterprises. The Board meets quarterly and monitors management's compliance with policy and its achievements against objectives. The relationship between the shareholder and the Board is preserved, as the Board is responsible for ensuring that proper internal controls are in place and that Eskom is effectively managed.

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The transition was accomplished smoothly and the conversion, including the creation of new Board committees and the induction of Board members, was carried out efficiently. The two-tier governance structure of the Electricity Council and the Management Board was replaced by a Board of Directors.

Links to relevant legislation and authorities: The compact is not intended to interfere in any way with normal company law principles. The chairman guides and monitors the input and contribution of the directors. The Board has approved a Board charter that provides guidance to the directors in discharging their duties and responsibilities.

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