Andre de Ruyter reveals his biggest mistakes at Eskom

Andre de Ruyter underestimated the level of scrutiny he would receive as CEO of Eskom, which was coupled with a lack of political cover and support. 

This ultimately was the main reason why De Ruyter resigned from Eskom, with the former CEO feeling as though he was being hung out to dry amid public criticism from Cabinet ministers and no support from his political masters. 

The scrutiny of Eskom also resulted in a lack of focus at the company, with executives sporadically called in by ministers or Parliament to account for the utility’s performance. 

This dovetailed with what De Ruyter describes as the “political game” of actively managing Eskom’s image and pleasing ministers. 

Ultimately, this leaves the CEO with less time to focus on running Eskom and implementing the company’s strategy. 

Eskom’s reporting lines within the government have been greatly simplified in recent years, with the number of ministers and departments involved declining from three to just one. 

This has come with the formation of the Department of Electricity and Energy, headed by Minister Kgosientsho Ramokgopa, who has also shared some of the scrutiny on Eskom’s executives. 

Eskom chairman Mteto Nyati is also much more comfortable with being a public voice for the company than his predecessors. 

This eases the burden faced by current CEO Dan Marokane, while freeing up his time to focus on the utility and its operations. 

De Ruyter explained just how intense the scrutiny and the demands on Eskom’s CEO can be in a discussion at Oxford’s Saïd Business School. 

The former CEO admitted that the scrutiny at Eskom was vastly different from that he received as a leader of a private company, such as during his stint as Nampak CEO. 

“The level of scrutiny that accompanied the role in terms of the media, in terms of Parliament, and being summoned to explain why the lights were off at the drop of a hat was quite disruptive,” De Ruyter said. 

“You just had to cancel everything to attend those sessions or accompany the minister on a visit to a small town and play the political game.” 

“That was quite a revelation and adjustment from basically being your own boss in the private sector.” 

Political cover

The scrutiny De Ruyter faced as Eskom CEO was exaggerated by the lack of political cover he received and the government’s inability to move quickly in tackling serious issues, including criminality. 

De Ruyter previously said that his biggest mistakes at Eskom were trusting politicians to support him and the decision to take the job in the first place. 

Other challenges that emerged as he worked at Eskom were just how different a public utility is compared to a private company, with there being little appreciation for the value of money, the need to be efficient, and the desire to provide a product. 

“Basic business concepts, like calculating internal rates of return on projects and making sure that your capital is optimised or ‘scrubbed’ as McKinsey would say, and that you get value for money, were foreign to Eskom,” De Ruyter said. 

“These concepts were foreign within the Eskom environment because procurement was seen as a tool of transformation and not as a tool of ensuring that the best techno-economic solution was put in place to address the needs of the company.” 

Once this focus shifts, it creates a host of problems for the company that has resulted in the situation Eskom has found itself in over the past few years.

These challenges combined to push De Ruyter to call it quits at Eskom in February 2023, with the CEO saying he would definitely think harder about taking the job if he could go back in time. 

“I think the first thing is to have asked myself far more deeply about whether I should take the job or not,” De Ruyter said. 

“In retrospect, I would have probably been like most people and say, ‘You need to have your head read’, and that is what I should have done.”

De Ruyter assumed he would receive far better political cover from ministers when taking the job, as he naively thought they would support him in the role of Eskom CEO. 

“I should have insisted on clearer and stronger commitments to political support. When the going got tough, I was quite frequently left out and hung to dry,” De Ruyter said. 

“I think if I look at the lack of support in addressing criminality at Eskom, which has been well-documented, the fight was never going to be won.”

“That is frankly why I lost patience with the pace at which things were being done. I should have asked for more guarantees in writing.”