South Africa is being invited to watch the wrong movie.

The recent voluntary and forced resignations of members of the Public Investment Corporation (PIC) board have largely been analysed through the personalities of those involved: board members, the chairperson and the shareholder minister.

Much of the commentary has also been framed through the familiar grammar of corporate governance and legal argument: who had the authority to do what, whether proper procedures were followed, whether particular decisions complied with the PICâs governance framework, and whether the courtâs ruling on the precautionary suspension of the PIC CEO might have been different had the board been allowed to present its case before the resignations.

These questions matter. They should be answered properly and, where necessary, through appropriate legal and institutional processes.

But they do not adequately explain what has been unfolding at the PIC.

Viewed only through personalities and governance, the recent events can appear to be a difficult but ultimately manageable dispute between individuals and institutions. Viewed together, however, they point to something far more consequential: an intensifying contest over influence and control of an institution that manages almost R4-trillion in workersâ money.

That is the missing dimension in much of the public commentary.

The PIC drama and its political economy

The PIC does not operate in a vacuum. Around it are powerful commercial interests, investment managers, politically connected businesspeople and politicians who have an understandable interest in accessing the enormous pool of capital under its management.

There is nothing inherently improper about that. The PIC exists partly to invest capital and generate returns, and businesses should legitimately compete for that capital. After all, this is capitalism.

The critical question is different: who decides where that money goes, according to what criteria, and under whose influence?

The PICâs money ultimately belongs to workers and beneficiaries. The institution therefore requires credible boards and management capable of acting as custodians of those interests. Their responsibility is not to satisfy individual politicians, businesspeople or investment interests, but to ensure that capital is deployed in accordance with the PICâs mandate, sound investment principles and the interests of workers and beneficiaries.

This is why the metaphor of a security guard is useful. A good security guard is not employed to make everyone happy. The guardâs responsibility is to protect the property. Inevitably, that means stopping people who may want access when they do not have a legitimate right to it.

During my time on the PIC board and in management, I encountered many men and women who understood this responsibility. They were prepared to be criticised, labelled difficult or even called names because they believed their duty was to protect workers and their beneficiaries.

Institutions become vulnerable when those responsible for guarding them begin to worry more about pleasing those seeking access than protecting what they have been entrusted with.

And, like every institution, the PIC is not immune from having its own bad actors.

This is why reducing the current controversy to a clash between a chairperson and a minister, or between one board and another, is inadequate and ill-informed.

Whistleblower allegations and institutional independence

The whistleblower allegations also raised questions concerning the shareholder minister. Once the minister is mentioned, directly or indirectly, the question of whether he can remain entirely detached from the process becomes legitimate.

Ordinarily, a shareholder minister would be briefed, particularly on the possibility of the precautionary suspension of a CEO. But that relationship becomes considerably more complicated when the shareholder is perceived to be closely involved in the internal affairs of the board, or when the board believes that the shareholder may already have knowledge of matters discussed in board processes.

As board chairperson, I therefore faced a difficult institutional choice. I could brief the minister before the board decided on the precautionary suspension, despite his having previously expressed different views on various internal board matters, including the recruitment of the CIOs. If the board subsequently reached a different decision, that could reasonably have been interpreted as an act of defiance.

Alternatively, I could allow the board to complete its deliberations and inform the minister afterwards, explaining the reasons for its decision.

In the circumstances, I chose the latter approach, particularly because of the ministerâs own assertions that he was aware of matters discussed by the board. My understanding was therefore that he was already aware of the PIC attorneysâ and senior counselâs legal opinions and the issues arising from them.

This was not about personalities. It was about protecting the independence of a statutory board while maintaining an appropriate relationship with its shareholder.

The deeper issue is institutional independence.

The PIC has enormous economic significance. Its reputation matters to South Africaâs financial system and to the confidence of domestic and international investors. Precisely because it is systemically important, the PIC cannot afford either reckless decision-making or a culture in which difficult questions are avoided because they might cause discomfort.

The same principle applies to whistleblower allegations.

It has been suggested that, because of the PICâs systemic importance, the institution should exercise restraint by effectively ignoring allegations that might destabilise it. That reasoning gets the issue backwards.

It is precisely because the PIC is so important that allegations capable of damaging its integrity must be assessed. Ignoring serious allegations could itself create perceptions of corruption, concealment or institutional capture. Those perceptions could ultimately be more damaging to the PIC than a properly governed investigation.

The relevant question is therefore not whether the PIC is too important to investigate. It is whether allegations are handled proportionately, fairly and through appropriate institutional processes.

A systemically important institution such as the PIC has a greater, not lesser, obligation to protect its integrity.

Chief investment officer appointments

The board resolved to separate the chief investment officer (CIO) function into three distinct areas: Listed Investments, Unlisted Investments, and Properties and Infrastructure. The restructuring gave effect to principles arising from the Mpati Commission and was intended to address a fundamental governance concern: the excessive concentration of investment authority in a single CIO and a small group of investment professionals.

The board then proceeded with the recruitment of the three CIOs in accordance with the relevant delegation of authority. The restructuring was considered by the board; the proposed approach was known, and no objection was raised when the process commenced. Relevant stakeholders were informed that the recruitment was under way and why the CIO function had been divided.

The real difficulty arose only after the process produced an unwanted outcome.

It is difficult to take seriously the suggestion that there was suddenly no knowledge of the process, its rationale or the framework under which it was conducted. These were not matters discovered after the outcome of the recruitment process. They were known before the recruitment process was undertaken.

What changed was the outcome. Once the outcome became undesirable, institutional memory appeared to change with it. Matters that had not been raised as objections when the process commenced, including notification, procedural compliance and the interpretation of the delegation of authority, were suddenly elevated into grounds for challenging the interview outcomes.

That chronology matters. It points to a troubling inversion of principle: the process was acceptable while the outcome remained uncertain, but once the outcome became unwelcome, the rules were revisited in an apparent search for a basis to undo it.

That is not merely a dispute about the splitting of the CIO function or the recruitment process. It goes to the heart of institutional independence.

Shareholder oversight is legitimate. Questions may be asked. Accountability may be demanded. Concerns about senior appointments may be expressed. But oversight cannot become a veto over the outcome of a process that falls within the boardâs lawful responsibilities.

If rules are invoked only after the result is known, the issue is no longer simply whether the rules were followed. The more fundamental question is whether the rules are being applied consistently or selectively to achieve a preferred outcome.

That is precisely how institutional independence begins to erode: not necessarily through an overt instruction to disregard the rules, but through pressure to reinterpret, revisit or selectively invoke rules when an institution produces an outcome that powerful interests do not like.

The CIO controversy should therefore not be reduced to a quarrel about candidates or personalities. The real question is whether an outcome must be acceptable to those exercising influence outside the board before the boardâs authority will be respected.

The Acapulco-Harith dispute

Part of the problem or drama facing the PIC and previous board was the ongoing business dispute involving Acapulco and Harith around Lanseria Airport, which has played itself out on the PICâs public screen.

The public record contains competing allegations between the two businesses, which were funded by the PIC long before the board on which I served. Those allegations should not be treated as facts simply because they appear in court papers, whistleblower reports or media coverage. Their merits must ultimately be determined by the evidence and, where appropriate, by the courts.

But the existence of a pre-existing commercial dispute did not give the PIC a licence to look away. In my assessment, the Acapulco investment was not adequately evaluated from the outset in 2013. The risk assessment was insufficient.

Institutional accountability requires intellectual honesty. Not every PIC investment has been a good investment. Some decisions are questionable, and some risks deserved greater scrutiny. An investment made in good faith does not automatically make it a good investment.

But there is an equally important distinction between questioning an investment decision and accusing individuals of misconduct. The former may be established by evidence; the latter must also be supported by evidence.

The PIC should not be judged by whether every investment succeeds. It should be judged by whether it responds honestly and decisively when credible concerns arise.

The Acapulco investment predates the board on which I served. But that did not absolve us of responsibility. When we accepted responsibility for the PIC, we accepted responsibility for its entire portfolio, including investments made before our appointment.

Our responsibility was to interrogate those decisions, confront their consequences and protect the interests of our clients.

Following the Acapulco debt default, the previous board was also not satisfied with the outcome of the debt-settlement arbitration endorsed by the CEO and management, as the settlement fell within managementâs delegated authority. When the matter was reported to the board, the board expressed its dissatisfaction with the settlement.

However, based on the CEOâs report and two legal opinions obtained from senior counsel, the board felt constrained from taking the matter further.

It was only after a third legal opinion was obtained that the board referred the matter to the Special Investigating Unit (SIU) for further investigation.

Some expected the board to ignore the whistleblower allegations because they believed they arose from the underlying commercial dispute. That would have been the wrong approach. Allegations must be assessed on their substance, not simply on the identity or presumed motivation of the person raising them.

The draft PwC report identifies several missteps in relation to the debt-settlement arbitration. I would not, on the basis of that report alone, accuse PIC professionals of deliberately neglecting their due-diligence responsibilities or of being corrupt. Such allegations would require evidence and a proper investigation.

That is precisely why I referred the matter to the SIU.

That is not evidence that the board supported Acapulco. It is evidence that the board took its responsibility to the PIC and its clients seriously.

State Capture and the bigger question

South Africa cannot afford another cycle of State Capture.

It begins more quietly. It begins when informal influence becomes normal and politically connected individuals acquire privileged access. It thrives when boards become reluctant to challenge powerful shareholders, when management appointments become instruments of influence, and when those responsible for guarding an institution begin to fear the people seeking access to it.

That is one of the lessons South Africa should have learnt from the previous period of State Capture.

The PIC cannot be treated as simply another institution caught up in a political or corporate drama, with competing actors invoking governance when it suits them. It manages the accumulated wealth and future retirement security of millions of workers. That makes its independence a matter of public interest.

The question is therefore not simply who resigned, who appointed whom, who said what to whom, or whether one individual was right in a particular governance dispute.

Those are the visible characters in the drama. The deeper story is about power, and how power is exercised. It is about powerful commercial interests competing for access to an enormous pool of capital, and about political actors who may seek influence over the institution through relationships with businesspeople, board members and managers.

The workers whose money the PIC manages cannot afford for this question to be reduced to a soap opera about personalities and governance grammar.

The real question is much bigger: who controls the institution that controls workersâ money? And, ultimately: who guards the guards when almost R4-trillion is at stake? DM