Bill Would Allow Ministers to Directly Appoint the Heads of Government Companies

What Is Proposed to Change

The bill proposed by Likud MK Avichai Boaron seeks to abolish the pool of candidates for directorships established in 2013. Ministers would be able to appoint directors without a competitive process and directly select the chair of the board, even though the directors themselves currently choose the chair. It is proposed that a cooling-off period of only six months be set for former members of a party’s selecting body, and that the influence of the Appointments Review Committee be weakened.

Why the Dispute Arose

According to Government Companies Authority data cited in the source regarding August 2026, 312 of 716 director positions at 88 companies are unfilled. In a January 2024 report, the State Comptroller determined that, at the time, 270 of 620 positions were unfilled and 21 of 71 companies lacked a legal quorum; he placed responsibility for the failure on ministers who did not sign off on appointments from the lists presented to them, which included suitable candidates. The proposal’s sponsors seek to change the system, while its critics believe the problem does not stem from professional screening but from ministers’ refusal to fill the vacant positions.

Why Government Companies Need Independent Directors

The board of directors sets company policy, supervises the chief executive officer, approves the financial statements, and participates in appointing the chief executive or removing the chief executive from office. A director owes a fiduciary duty to the company, not to the minister who appointed the director, and must assess decisions independently. The existing arrangement allows a person with a political affiliation to a minister to be appointed only if that person has “special qualifications,” which are reviewed by the Appointments Committee.

The Consequences of Unfilled Positions

As an example, the source presents Israel Aerospace Industries, which operated for an extended period without a permanent chair and without external directors. It was reported that, because the required bodies were absent, the company was unable to approve certain transactions and publish its reports for the second quarter of 2025 on time; the Israel Securities Authority had previously imposed a fine of 1.5 million shekels due to the absence of a chair. The company itself and the defense minister disputed the claim that the staffing situation had halted serial production of “Arrow” missiles, but in a petition to the High Court of Justice, the company stated that it was unable to convene the committees prescribed by law and that harm could be caused to state security.

What Stage Has the Initiative Reached?

Boaron’s proposal passed a preliminary reading in December 2025 by a majority of 46 votes to 35, but it was not approved in a first reading. According to the source, its advancement was delayed by legal criticism and opposition actions, and the process was not completed after the Knesset was dissolved. Deputy Attorney General Dr. Gil Limon concluded that the proposal harms the public and turns government companies into a source of jobs for associates.

Latest legal news

• UK warns of sanctions over participation in E1 construction
• Opposition bloc plans to halt judicial laws from taking effect
• Government advances national flood-risk plan