“I set up this committee because I realized that the idea of the directors’ panel is a sick joke,” declared Minister of Regional Cooperation David Amsalem, who is also responsible for the Government Companies Authority, in February, when he presented with satisfaction the recommendation of the Midani committee that the mechanism set up by Yair Lapid as minister of finance a decade ago should be abolished. The panel is a pool of people deemed qualified to serve as directors of state-owned companies, from which new directors are selected. Now, however, when the bill published this week has exposed the minister’s real and full intentions, the expert whom Amsalem chose to lead his reform has retreated in alarm.
Talking to “Globes”, Professor Aassaf Midani, chairperson of the public committee on the reform of the appointment of directors in state-owned companies, reveals the depth of his concern at the legislation being formulated. “There has to be a balance between the ability of the minister to advance his policy, and the promotion of professionalism and disinterested autonomy in the administration, and the bill upsets this balance,” he warns.
As mentioned, Midani is not an external critic. He is the person chosen by Amsalem himself to lend academic legitimacy to his move. Midani says that Amsalem took his recommendations to places he never imagined. One of the sections of the bill that he finds particularly disturbing is the one that changes the structure of the committee on senior appointments in government companies, headed by former judge Shulamit Dotan.
“I’m embarrassed about this,” Midani says sharply. “We recommended not touching the independence of the Dotan committee, and I see this as scandalous.” The legislation proposes that the appointment of the chairperson of the committee should be transferred from the attorney general to the minister himself, a step that will turn the body meant to supervise appointments into another tool in the minister’s hands.
Midani tries to offer a compromise; “It’s possible to adopt this idea, provided that the law ensures that the position is independent, that is to say that it should be written into the law, in a way similar to the Israel Security Agency (Shin Bet) Law, that the committee will operate in accordance with the interests of the state, and will not be charged with promoting party political interests.” He proposes that the chairperson’s term should be five years instead of three years as in the bill, and that the committee should have independent legal counsel.
Unqualified appointments
The gap between the Midani committee’s recommendations and the bill is particularly apparent on the subject of the mix of directors on the boards of state-owned companies. “The mix must be such as will ensure that a third of the directors have management, financial, and legal experience. They represent the spearhead on which the board relies. I see no mention of this in the bill,” says Midani. Instead, the bill leaves the way wide open to appointments without adequate professional qualifications.
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On the question of the definition of “political affinity”, the bill narrows the definition in such a way as to allow political appointments. “The bill restricts it to active membership of a party’s electoral body,” Midani points out, “I think that any form of membership of a political party, and not just of its electoral body, necessitates a cooling off period of a year.” He adds that political affinity should also include “work with the minister, such as political advice, and political appointees such as the head of the minister’s bureau, aides, and spokespersons, and should be subject to a cooling off period of more than a year.”
The public committee also found that clear criteria should be set for qualifying as a chairperson or director of a state-owned company, without which “the law is really not clear, and that’s a recipe for deterioration,” Midani says. “I haven’t seen the regulations in this bill, and the fear is that they will not be drawn up in the future, or will drafted too flexibly.”
Vacant posts
Midani’s criticism acquires additional depth from the stormy history of the fight over the directors panel. In 2013, then minister of finance Yair Lapid and Government Companies Authority director Ori Yogev announced that, on the basis of audit reports by the state comptroller, and in order to prevent political appointments, a “directors panel” would be formed, the aim being to prevent a situation in which ministers appoint political associates to posts requiring professional expertise.
Amsalem, however, saw the panel as a threat to his power. “Who should I appoint? I put forward people I know from among the boys,” he said in a radio interview with Channel Bet. It wasn’t a slip of the tongue; it was a declaration of intent. His battle against the panel exacted a heavy price: hundreds of directors’ posts in government companies are vacant, and some companies are approaching a situation in which they will be unable to operate.
Despite the criticism, Midani finds some positive points in the draft bill: regularizing of the training for directors, a probation period of six months for new directors, and appropriate representation for residents of the periphery. “New directors come along who haven’t a clue about government companies in general and the company concerned in particular,” he says by way of explanation of the importance of the probation period.
A long power struggle
The drama over the directors panel didn’t start this week. Back in 2020, Amsalem, then minister for national digital affairs, tweeted about abolishing the panel. At that time, the move was repulsed by the attorney general, and halted by the break-up of the previous Netanyahu government. Since then, Amsalem has waged a war of attrition over the matter against anyone who has stood in his way. The previous director of the Government Companies Authority, Michal Rosenbaum, who had initiated a different reform of the structure of appointments to state-owned companies, resigned in protest against his conduct.
In August 2024, Amsalem formed a committee headed by Midani to recommend changes. The choice of Midani was not happenstance. He is a highly regarded professor of public policy and public law, with an academic record that was meant to lend legitimacy to the controversial move.
In presenting the committee’s report in February, Midani explained; “The director’s role is one of policy making and supervision that should align with the policy of the minister,” but even to him it is clear that Amsalem has gone several steps too far. So it comes about that the person who was supposed to be the minister’s professional seal of approval has become a warning voice against him.
Published by Globes, Israel business news – en.globes.co.il – on July 23, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
