While minister David Amsalem is working to abolish the government directors roster, the State Companies Authority is advancing a quality-control process for directors in state-owned companies. About 800 directors serve in 70 government companies and 30 subsidiaries, and it is common for directors to move from one company to another after finishing a term.
The authority does not appear to be trying to stop that mobility, but it does want to rate directors’ work as a way to gauge whether they are suitable for another board seat in a government company. The assessment will be carried out by the authority’s liaisons in the various companies, who attend board meetings both as state representatives and as observers. They will examine attendance, familiarity with background materials, financial and business understanding, preparedness for meetings, the number of proposals made during the term, and projects advanced. In large companies such as Israel Aerospace Industries, Rafael, and Israel Electric Corporation, directors reportedly show full attendance.
The plan has several weaknesses. The review will be given only at the end of a director’s term, meaning every quarter the authority will rate all directors who are finishing service. The evaluations will not be made public and will remain inside the authority, apparently for privacy reasons. In addition, ministers, not the authority, appoint directors, and it is unclear how a low rating would prevent a minister from promoting a preferred candidate. Ministers also choose the chairperson in each company under their ministry.
The authority has in recent years tried to limit conflicts of interest and revolving-door moves, but transfers between companies continue. The article cites Moshe Shimoni, who after five and a half years as chairman of Israel Railways is moving to Mekorot after previously being a candidate to head Israel Electric Corporation. Doron Bareli, chairman of Israel Electric Corporation, was mentioned as a candidate for Mekorot, and the head of Netivei Israel was named as a possible candidate for Israel Railways. The Mekorot post opened after Andrey Ozen failed to win approval from the appointments committee. Led by Roy Kalon, the authority said this is not a דירוג or “grading” system, but a professional tool meant to improve governance and oversight, promote organizational learning, and encourage higher standards of responsibility, professionalism, and engagement.
At the same time, the authority is handling major corporate moves, including a merger of Elta into Israel Aerospace Industries, possible mergers of the Cross Israel and transport companies into Netivei Ayalon or Netivei Israel, and a merger of the energy firms Katsa'a and Tash'a. It is also reviewing a split of Neta's activities and pushing forward the planned public offerings of Israel Aerospace Industries and Rafael, although the Defense Ministry currently opposes at least the Rafael offering.
