• BPOPF operates without board of trustees • NBFIRA meddling in BPOPF board selection?
• Acting CEO fighting to save her job • BPOPF governance grinds to a halt • Trustees, Management differ on way forward
Operations at the Botswana Public officers Pension Fund (BPOPF) has ground to a halt as the controversy over the re-election of trade union representatives on the BPOPF board of trustees rages on.
At the end of last week the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) had thrown a spanner in the works by trying to influence the process of the selection of Trustees by the trade union members. According to Bokani Machinya - a senior associate at Collins Newman & Co lawyers -representing BPOPF management, a high level report on the NBFIRA position had shown that NBFIRA's primary concern was around the board composition and the time it will take for the security vetting process of the new nominated Trustees. In a correspondence last Thursday Machinya advised the trade union party representatives that the security vetting process may take up to more than six weeks to complete and emphasised the need to have a full complement of the board given the lengthy time frame.
But Machinya immediately stepped on a landmine and stirred controversy when he proposed that the old composition of the board be maintained in the interim until the results of the NBFIRA vetting process was announced. "Our proposed way forward is that the old composition of the board be put in place immediately. The voting of new members takes place including all the other previously excluded unions next week. The names be announced and the vetting exercise by NBFIRA be completed. At the end of the vetting exercise the names be forwarded to BPOPF to replace the “temporary” union representatives," he suggested.
The trade unions would have none of that and rejected the proposal outright. On Friday their lawyer Mboki Chilisa of Collins Chilisa Consultants told Machinya that all recognised trade unions were given the opportunity to participate in the nomination of employee trustees. He said the Trainers and Allied Workers’ Union (TAWU) elected not to participate, but as a solution the nominations can be tallied again after receipt of further nominations from the union. "It will not change or affect the outcome, because the other five recognised unions were unanimous in their choices," he said.
Chilisa said at least nine of the 18 elected trustees have previously been vetted and therefore suggested that any nine of those who have already been vetted, be immediately appointed to hold office until end of November. "Our clients are strongly opposed to old trustees who were not re-elected holding offices temporarily, because they have never enjoyed the support of the employee members," he said.
Acting on the advice from Collins, Newman & Co - BPOPF acting Chief Executive Officer Lesedi Moakofhi - had earlier communicated NBFIRA concerns over the exclusion of some associations in the election of new trustees to all board members. She then requested convening of the old board "for purposes of progress because meetings are not held and operations that need the attention of the board have been (frozen). This state of affairs poses a serious risk to the Fund if the matter is not concluded as it is a governance gap on the side of the Fund. The Regulator has instructed that all the unions should be given the opportunity to participate in the voting process, and that the entire process should take seven days," she said.
Last month Moakofhi announced that BPOPF is about to enter the private equity market and set up an infrastructure fund, as new investment projects estimated at around P1.6 billion. In the absence of the board of trustees the roll out of the projects has stalled.
In an interesting twist, NBFIRA on Thursday distanced itself from meddling with the selection process of the trustees. Communications and Public Affairs Manager at NBFIRA Tapologo Kwapa said they were not aware of any correspondence they are alleged to have made to BPOPF regarding the voting of trade union trustees to the board. He said as a regulator they do not interfere in the voting processes of board members for the entities they regulate but only do the vetting to ensure that those elected have the capacity and credibility to add value to the board. He said this ensures that the entities do not suffer due to poor management. "We do not interfere with election criteria of entities we regulate. That would be unlike us. At NBFIRA, we are only concerned with operational and proper governance issues but not internal politics of who gets voted into the board or how," said Kwapa.
On the delays in appointing trustees to the BPOPF board, Kwapa said as a regulator they are concerned when an organisation is running without a board of trustees. He said such vacuum could lead to operations being stalled because decisions that need to be taken by the board of trustees cannot be taken. Non-availability of the board could lead to loss of business, investment opportunities or service delivery to the public, he said. Asked about their relationship with Collins Newman & Co in relation to the BPOPF board issue, Kwapa denied that the law firm represents their position. He, however, explained that they engage different attorneys when the need arises depending on a specific issue that needs to be addressed.
Sources close to the developments allege that Moakofhi deliberately misled NBFIRA on representation in the board of trustees because she is worried that old members who were her allies have now been removed from the board. One of the union trustees Tobokani Rari said they have resolved to write a letter to the acting CEO to enquire about progress on the matter and thereafter decide on the way forward. He said if there is no development on the board issue by next week they will have to seek redress. Reacting to allegations that NBFIRA has expressed concern about the exclusion of some associations in the nomination of trustees Rari said "It is none of Moakofhi's business. She is out of order. She may be harbouring some interest in the matter," he said.
Rari said it is for the associations to raise complaints and not Moakofhi or the regulator. He said the associations did not attend the meeting to verify the nominations despite that an invitation had been extended to them, thus denying themselves an opportunity to submit their own nominees.
There is uncertainty over the chairmanship of the board after the incumbent, Carter Morupisi, was last week promoted from Director of Public Service Management to Permanent Secretary to the President. Morupisi has already indicated that he may not be able to continue as chairman of BPOPF board due to the work load in his new position.
Is Moakofhi in contempt of court?
Some board members immediately raised concern about NBFIRA's purported interest on internal issues, while others expressed curiosity over the unfolding developments. One of the board members responded thus: "I never thought the regulator can vary a court order. There is drama in what is being suggested. The regulator is also bound by court orders. It would be interesting to see whether a decision making structure of the Fund can be sued while still placed under court suspension."
The new trustees were elected after the National Amalgamated Local and Central Government and Parastatal Workers Union (NALCGPWU) had successfully petitioned the High Court against their exclusion from the board of trustees of the Fund. A settlement order between the parties on October 6, 2014 before Justice Tshepo Motswagole specifically stated that "the employee trustees shall forthwith vacate their offices and no further business of board of trustees of (BPOPF) shall be carried out until the terms of this settlement agreement have been duly complied with".
A lawyer says the proposal by to reconvene the old board of trustees would clearly breach the court oder. Court had further ordered that "the nine persons with the highest number of nominations shall be taken as duly appointed as trustees in terms of the Botswana Public Officers Pension Fund (BPOPF) Rules".
BPOPF was registered in 2001. The Fund has experienced phenomenal growth since inception owing to the overwhelming positive response from the entire public service. A Board of Trustees is the supreme body that manages the Fund and is comprised of nine (9) Employer Trustees, nine (9) Employees Trustees, one (1) Pensioner Trustee and one (1) Independent Trustee appointed by the Board of Trustees. In total there are 21 Trustees including the Principal Officer. The Board of Trustees has five main sub committees for Finance and Investment: Benefits Committee; Audit Committee; Marketing and Communications Committee; and the Human Resources and Remuneration Committee.
Member trade unions for BPOPF include Botswana Primary Teachers Association (BoPRITA), BOPEU, Botswana Secondary Teachers Union (BOSETU), BLLAHWU, Trainers and Allied Workers Union (TAWU), BOTASA, Botswana Teachers union (BTU), BOPRITU, Botswana Government Workers Union (BOGOWU), Botswana Nurses Union (BONU), and Manual workers union (NALCGPWU).
BPOPF spokesperson, Devilliers Disang Nage, had not responded to questions on the latest developments emailed to him last month.