FNB Acacia

Rot in parastatals as ministers declare open season

SHARE   |   Monday, 10 October 2016   |   By Staff Writer
Rot in parastatals as ministers declare open season

The level of rot, abuse of power and flagrant denigration of best Corporate Governance provisions exposed in the current sitting of the Parliamentary Committee on Statutory Bodies and State Enterprises is shocking in the extreme. It shows that the tax payer’s money is being recklessly wasted and from the skeletons that are tumbling out, only a few parastatals are clean. Where systems are thrown out for the rule of the thumb, it can only suggest an open season for corruption and self-enrichment. The question is – with this only being exposed now – how bad is the situation? It is extremely bad. With this Committee only having started work this year, it will mean that in previous years accountability was not assured. What is shocking is the involvement of Government ministers. As political heads of the ministries they run, they appoint and disband Boards of the parastatals they oversee. The law establishing these parastatals is very clear that the Boards are the ultimate authorities in the running of parastatals. They only refer certain decisions for final approval of the ministers responsible and the Cabinet.

Senior company management has to take and implement decisions based on the approval of the Board. The Boards approve all operational systems, policies, conditions of service, organizational structure and even remuneration levels of company staff. The Boards create limits on the basis of transactions that the executive can enter into without its input. For huge transactions and major programmes, Boards approvals are sought. Executive management is hired through the approval and involvement of the Board. As a CEO you do not sit down to determine pay and positions of your immediate subordinates. This is however what is currently happening in some of the country’s parastatals. And the CEOs say they have ministers’ approval to break the law and do as they wish! This obviously cannot be acceptable. While underperforming boards can be set aside; they should as a matter of urgency be replaced. It should not be made to look like the ministers are conveniently removing Boards so that they can singularly run involved organisations.

From the recent revelations it appears too convenient that a tender worth over P80 million was awarded without being put to tender, approval of the board or even the minister involved. This smacks of corruption and cannot be said to be acceptable. It cannot be justifiable for a minister to say he won’t appoint a board because other Boards are dysfunctional or ineffective. Boards are meant to reduce individualism and enrich group decisions. For public assets which do not belong to a minister, he or she cannot claim to be the best and only person to take decisions. Board resolutions are for this specific reason – to reduce culpability from an individual to group; particularly where an asset belongs to the public. The presidency ought to quickly intervene here and normalise all parastatals’ operations. All Boards must as a matter of urgency be constituted where none exist. Otherwise the country is being ruined and left to the whims of individuals with their own agendas. It cannot be good enough that there are no qualified locals to sit in the Boards of our parastatals. Many of our people are ready and waiting to serve. As it shows, ministers cannot be trusted to assume powers of the boards. They appear to run these as though they are their personal assets.