The Ethiopian Investment Holding (EIH), the national sovereign wealth fund, is implementing a systemic leadership overhaul across its portfolio of public enterprises, signaling a decisive shift from traditional governance models.
Under the direction of CEO Brook Taye, the reforms target board compositions and executive management structures to align with stricter corporate governance standards and enhance commercial performance.
The restructuring is grounded in Ethiopia’s Public Enterprises Proclamation, which mandates that one-third of board members in State-Owned Enterprises (SOEs) be qualified independent directors. EIH is acting as an “active owner” to enforce these standards, moving beyond the passive oversight historically characteristic of public enterprise governance.
“Corporate governance is the pivotal factor that will drive public enterprises toward profitability,” stated CEO Brook. He emphasized that EIH expects strong financial and operational outcomes from the entities under its purview, ensuring they deliver tangible benefits for the public, the government, and their own long-term sustainability.
Enterprises failing to meet performance benchmarks during evaluations are undergoing significant leadership changes. EIH directly oversees 41 strategic companies, organized into nine clusters. These include major national entities such as the Commercial Bank of Ethiopia, Ethiopian Electric Power, Ethio Telecom, and Ethiopian Shipping and Logistics.
The sovereign fund’s core mandate is to transform these enterprises into highly profitable entities and to establish a sustainable financing model for strategic domestic and international investments.
To date, the restructuring has resulted in the appointment of 70 new board members, including eight chairpersons. Concurrently, 41 board members and eight chairpersons have been removed, alongside the replacement of six chief executives.
“Our objective is to establish dedicated, capable boards and competitive top management to ensure sound governance and profitability,” Brook added.
A key aspect of the reform is the deliberate departure from past practices, in which senior government officials routinely held multiple board positions across various SOEs. Informed sources told Capital that EIH is instituting a new policy whereby a senior official will serve on only one public enterprise board. Appointments will be based primarily on technical expertise and direct relevance to the specific company’s sector.
“Unlike in the past, we want to ensure board appointments are based on qualifications that provide companies with skilled guidance,” Brook told Capital.
EIH sources endorsed this approach, noting that although senior officials can provide valuable oversight, their participation must be strategic and focused to avoid conflicts of interest and governance dilution.
Brook cited the exemplary performance and governance of Ethiopian Airlines Group, an EIH subsidiary, as a model for the broader portfolio. “If we can institutionalize the caliber of leadership seen at Ethiopian Airlines across other SOEs, we can replicate that success,” he said.
With a professional background in Western financial sectors before joining public service eight years ago, CEO Brook underscored that professionalism must be the cornerstone of SOE governance. He directly links this to robust business and commercial decision-making frameworks, which are expected to enhance board effectiveness, increase tax contributions and dividend payouts to the state, and ensure successful project execution.
“As the active owner of these enterprises, we will continue to make necessary corrections to fulfill our mandate,” Brook concluded, positioning EIH as a central actor in Ethiopia’s broader economic reform agenda.
