Government Moves to Control State Company Boards Amid Vacancies
Translated & summarized from Zman Yisrael by baba
The Israeli government is pushing to abolish the Directorate Selection Committee and give ministers direct control over appointments to state-owned companies, where over 300 board positions are currently vacant. This move follows a dispute that left Israel Aerospace Industries without a chairman for 18 months, reportedly impacting critical deals. Legislative proposals aim to allow ministers to appoint individuals without prior professional vetting, raising concerns about political patronage. The success of these changes depends on the outcome of the upcoming elections.
The story in 6 lines · by baba
- The Israeli government is attempting to dismantle the Directorate Selection Committee and grant ministers direct control over state company board appointments.
- Over 300 out of 716 positions on state-owned company boards in Israel are currently vacant.
- A leadership dispute at Israel Aerospace Industries left the company without a chairman for 18 months, impacting critical deals.
- Legislative proposals aim to allow ministers to appoint board members without professional vetting and shorten cooling-off periods for political activists.
- Data shows a doubling of politically affiliated candidates considered for directorships under the current government compared to the previous one.
- The future of these proposed changes hinges on the results of the upcoming Israeli elections.
The Israeli government, led by Prime Minister Benjamin Netanyahu, is seeking to dismantle the "Directorate Selection Committee" system and grant ministers direct control over appointments to state-owned company boards. Currently, 312 out of 716 positions on these boards are vacant, a situation the State Comptroller has attributed to ministerial failures. A legislative push by the ruling coalition aims to formalize this control, potentially turning state companies into a source of political appointments.
The Directorate Selection Committee, established in 2013, was intended to ensure professional appointments by maintaining a pool of qualified candidates. However, recent legislative proposals seek to abolish this system, shorten the cooling-off period for political activists appointed to boards, and allow ministers to directly appoint board chairs. One proposed bill, which passed a preliminary reading, would permit ministers to appoint any individual over 25, regardless of relevant experience, and would weaken the oversight role of the vetting committee.
The issue has had tangible consequences, particularly at Israel Aerospace Industries (IAI). The company has been without a permanent chairman for over a year and a half due to a dispute between ministers Israel Katz and Dodi Amsalem over the appointment of Gilad Erdan. This leadership vacuum reportedly stalled critical deals, including the production of Arrow missiles, and led IAI itself to petition the High Court of Justice against the state, citing the inability to convene statutory committees without external directors.
Data indicates a rise in politically affiliated candidates being considered for directorships. Between January 2023 and September 2025, 32 such candidates were identified, a rate double that of the previous government under Naftali Bennett. While the law allows for the appointment of politically connected individuals if they possess special qualifications, critics argue these legislative changes could lead to a "culture of jobs" and compromise the professional integrity of state-owned enterprises.
Future legislative efforts to reshape the appointment process are contingent on the upcoming election results. If the current coalition secures another term, these bills are expected to pass, significantly altering the governance of state-owned companies.