Botswana’s corporate sector is going through a serious governance crisis.
In no small way, the root cause can be traced to a culture where the same people can be seen sitting in almost every Board of Directors there is in the country – supposedly as independent directors.
A closer look at the business interests of these individuals, however, tells a totally different story.
Such a closer scrutiny brings to the fore a shocking reality that there is nothing independent about them, at least not by the standards of international definition of an independent director as known across the world.
There is a history to this setup where only a few individuals were always rotated across the Boards of Directors.
The practice is part of an engendered culture of political patronage.
Positions to these Boards have traditionally been used as part of government largesse to either seek favours or assuage bruised relationships.
Not so long ago it was also government’s unofficial policy to appoint to these Boards some of the ruling party’s failed politicians as a way of providing them with a livelihood.
The obvious negative consequence was that people who could add value, in terms of policy direction to these government-owned companies, were left out if they were suspected not to have been sympathetic to the ruling party.
The second, and more disturbing consequence, is that there was a lot of uniformity across these Boards.
In other words, a mistake made in one board tended to recur in numerous other companies simply because the people who were supposed to be giving independent opinions on the directions of these companies happened to be the same people.
Another sad consequence is that the country missed a handsome opportunity of creating a bigger pool from which to experience.
It was a small old boys’ club, not so much different from the racist and exclusive golf club that insists on arbitrary purity.
We note that, through PEEPA, which is the official government advisor on privatisation, things are slowly changing.
But our gripe is that, while there is movement in the right direction within the government-owned companies and parastatals, the same cannot be said about the Botswana Stock Exchange-listed public companies.
Recent media reports have highlighted the depth of decay in some of these corporations.
Such rot has, over the years, been hidden by the use of extensive advertising and corporate branding.
We call on BDC (Botswana Development Corporation), as the investment arm of government, with a heavy presence across the country’s economy to use its moral persuasion to improve corporate governance.
The best point of departure could be for BDC to insist on all the companies in which it has a share to abolish directors holding multiple directorships.
Not only is BDC strategically placed, because of the company’s size and influence, as a parastatal BDC has been the country’s first company to come up with a charter that governs the conduct of its Directors (both executive and non-executive).
It is difficult to see how, given the time consuming nature of today’s businesses, people are actually able to sit in many boards and still be of any value to those companies they are supposed to give direction.
In many countries, directors are held personally liable for any corporate breaches that happen within companies they are supposed to lead.
Because they are personally held liable, directors make sure that every decision that is taken in their name is properly scrutinized and implemented within the strictly stipulated confines.
That does not seem to be the case in Botswana, which is why people are all too happy to have their names appended to every board there is in the country.
Even the Institute of Directors does not have its voice heard on issues of corporate transgressions by its members.
We think its time standards are set, not just on who can become a board director but also setting a limit on how many boards one can sit on so that they not only become effective but also reduce the temptation of them using their positions to spread corruption and bad governance around.
