Mills Soko, professor of international business at Wits Business School, recently shared a statement from Eskom celebrating breakthroughs in the performance of the state-owned electricity utility that led to honours at the Black Business Quarterly Awards.
In the accompanying commentary, Soko praised the chief executive, Dan Marokane: “Congratulations, and well done, Dan Marokane. This is a richly deserved accolade and recognition. You are a superb engineer with an impeccable academic pedigree. An engineer who also boasts a long track record of being a top-class business executive. Eskom has experienced an immense turnaround under your leadership and your executive team. Keep up the excellent work. We are very proud of you, my dear brother.”
The Eskom statement celebrated Marokane’s recognition with the Public Sector Visionary Award at the BBQ Awards 2025. Presented by Black Business Quarterly, the award honoured his leadership in stabilising the national grid, restoring public trust and advancing transformation within the organisation.
Eskom highlighted that under his direction the electricity utility has reinforced its commitment to energy security while positioning itself as a sustainable and competitive enterprise. His leadership has also advanced socio-economic initiatives and fostered a culture of accountability, resilience and excellence across the organisation.
The statement noted that employees, known as Eskom guardians, have been inspired by his vision, which delivered a reliable electricity supply of 96% in the last financial year and 97% in the current year. These outcomes were presented as vital to national progress and economic growth.
When Marokane accepted the award alongside senior executives Bheki Nxumalo and Monde Bala, it underscored the unity and strength of Eskom’s leadership team. The celebration stood as recognition not only of his personal contribution but of the systemic determinants of performance at play, such as governance discipline, executive unity and leadership focus that together enabled Eskom’s breakthrough.
Systemic determinants
In the world of state-owned enterprises (SOEs), leadership matters, but it is never leadership alone. Business schools, where Soko teaches, have long treated case studies as the gold standard of pedagogy. Yet case studies often emphasise personal brilliance or failure while neglecting the deeper systems in which executives operate. The enduring truth is that performance in SOEs is shaped by systemic determinants of performance such as governance structures, institutional accountability, political interference or its absence and the frameworks within which leaders make decisions.
History has shown us that qualifications and pedigrees alone do not prevent failure. Enron collapsed under some of the most technically skilled executives of its era. SAA failed despite drawing leaders with formidable CVs. Systemic determinants of performance set the conditions for success or failure. They determine whether effective leadership can translate into organisational reform, making them a foundational tenet for understanding SOEs.
China
China provides a compelling case study of how systemic determinants of performance interact with leadership. Wendy Leutert’s landmark work China’s State-Owned Enterprises demonstrates that outcomes in SOEs are not determined solely by policy or ownership structures but by the individuals who lead them. Drawing on more than 150 interviews and extended fieldwork, she shows how Chinese executives, operating under a centralised political system, exercise autonomy through cadre flexibility and informal policy mechanisms.
One striking example contrasts two successive chairs of a construction SOE. The first decentralised operations and expanded abroad, while the second recentralised control at headquarters. The formal system did not change, but the outcomes did, because leadership channelled systemic determinants of performance differently. Leutert calls this the “intra-organisational politics of reform,” reminding us that leaders must manage internal contradictions as diligently as they respond to external constraints.
Despite operating under tight party-state oversight, Chinese SOE leaders often retain more room for manoeuvre than expected. Informal mechanisms and decentralised structures allow executives to exercise discretion in implementing reform priorities. This flexibility is significant because it challenges the assumption that centralisation eliminates autonomy. Leutert’s research shows that systemic determinants of performance like cadre management and internal policy interpretation shape the degree of space leaders have to act.
Another important element of China’s SOE landscape is the annual performance review system. Executives are evaluated against profitability, revenue growth and execution of state-mandated goals. Poor performance can result in demotion or reassignment. These reviews create both discipline and pressure, aligning managerial incentives with broader national objectives. Yet they also reveal the tension between commercial efficiency and political mandates, a systemic determinant of performance that executives must constantly balance.
The scale of China’s SOEs makes this balancing act particularly consequential. They account for roughly a quarter of the country’s GDP, and control about 40% of stock market capitalisation, yet generate a return on assets of only 3%, compared with 6.7% in private firms. Many are loss-making and burdened with debt, which has grown to more than 142% of GDP. These figures highlight both the inefficiencies and the systemic weight of SOEs in the Chinese economy. Leaders therefore operate under conditions where systemic constraints and national strategic goals often outweigh market logic.
From a governance perspective, oversight in China is two-pronged. The State-owned Assets Supervision and Administration Commission (SASAC) manages 97 central SOEs, restructuring companies and setting performance targets. At the same time, the Communist Party’s central organisation department controls executive appointments, while party committees inside enterprises ensure ideological alignment. This dual system exemplifies how systemic determinants of performance and managerial autonomy coexist. Leaders who succeed in China are those who navigate this hybrid environment effectively, aligning corporate strategy with party-state expectations while maintaining internal cohesion.
Systemic determinants of performance shape the field of play, setting the boundaries within which outcomes are possible. Of course leadership matters, as Leutert’s book reminds us, because it is leaders who activate or blunt these systemic forces. For South Africa, the lesson is that reform cannot be reduced to structural change alone, nor can it rest on individual brilliance in isolation. Only when capable leaders work within and through systemic constraints do policy designs translate into sustained performance.
Singapore and Asia
China is not unique in showing how systemic determinants of performance shape SOE outcomes. Singapore presents a contrasting case that underscores the same lesson in a different institutional setting. Temasek Holdings, the sovereign investment company, separates state ownership from operational management, appoints boards on merit and subjects its companies to international auditing and commercial disciplines rather than political bailouts.
Academic work by Chen Chao-Hung (2014) demonstrates that firms in which Temasek holds stakes consistently exhibit stronger governance, including higher proportions of independent directors and more frequent appointment of independent chairs, than other listed companies in Singapore. In a subsequent study, Chen (2016) described the Temasek model as an empirical paradigm of SOE governance where systemic determinants of performance such as meritocratic board appointments, transparent audits and state non-interference align public interest with corporate performance. Singapore differs sharply from China in its governance architecture, yet both cases reveal the same Asian trend: systemic determinants of performance, when effectively designed, create the conditions under which leadership can succeed.
The results
This wider comparative debate sharpens the meaning of Eskom’s recent achievement. Soko’s excitement over Marokane’s recognition reflects pride in a leader who has shown technical competence, strategic clarity and executive skill. Yet the deeper significance lies in the systemic determinants of performance that frame Eskom’s turnaround. Stable governance, executive unity and a degree of operational freedom have allowed leadership to produce results that counter South Africa’s wider narrative of SOE decline.
The tenet holds: leadership matters, but leadership is only effective when systemic determinants of performance provide both the space and the accountability for reform to take root. Leutert’s analysis of China shows how leadership can bend systemic levers even within centralised control. Chen’s studies of Singapore demonstrate that governance structures can be built to reinforce performance through discipline and transparency.
Eskom, under Marokane, offers South Africa an example of what becomes possible when leadership is supported by systemic conditions.
Soko’s excitement is therefore more than a personal celebration. It is a recognition that Eskom is showing the outlines of a systemic success story, one where leadership and governance converge as systemic determinants of performance to deliver results in an enterprise that matters profoundly to the nation.
Stable governance, executive unity and some operational freedom allowed the state-owned entity to succeed, show SOEs need not decline
