Saturday, September 26, 2020

Ministers should not micro-manage parastatals

The stalemate over the retention of the Botswana Development Corporation (BDC) executive management allegedly by the Minister of Finance and Development Planning Kenneth Matambo against the Board of Directors spells out clearly the glaring conflicting roles between the principal ministry and the board.

It has always been our opinion that as a shareholder government appoints Board of Directors so that they could provide strategic leadership to these proposals but also that they become the repositories of issues of Corporate Governance.

It has been alleged that the board recently gave the three executive managers (Maria Nthebolan ÔÇô chief executive officer, James Nfamba Kamyuka ÔÇô general manager corporate services and Sametsi Ditshupo – general manager business development) the ultimatum to either resign or get sacked.

However, with its limited powers, the board has been saddled with the three managers who are unwilling to jump ship, thanks to the support they allegedly garnered from the minister and their previous boss, Matambo, who is the past immediate BDC head.

The board is constrained from sacking the embattled managers because such authority lies with the supervisory minister under which falls the government’s investment arm. The board can only go as far as recommending the dismissal of the trio.

This extends to the appointment process where the board is only empowered to recommend to the minister.

Although in theory the Board is supposed to supervise and where necessary take disciplinary action against managers, in practice that is not the case as the Board operates at the grace and favour of the Minister.

At BDC the Board wields absolutely no power to dismiss the beleaguered managers save to recommend their dismissals.

The ultimate decision to sack the managers lies with the minister.

The minister is not even bound by any law to disclose reasons in case he rejects recommendations by the board. The practice essentially renders the board impotent.

If the board is created with the fiduciary role to direct and guide the corporation, why is it not endowed with the same power to hire and fire?

For as long as such conflict between the board and the ministry is not resolved, the practice renders the board impotent. What power then does the board have in ensuring that the corporation is managed in the right direction?

The supervisory role of the minister completely undermines the fiduciary roles of the board. Is it then necessary to have two supervisors over the same institution, that is, the board and the minister? That anomaly is more glaring at BDC where the Minister also happens to be the immediate past boss at the corporation. The current set up in which the minister can rule overrule the board with impunity calls for serious introspection on issues of corporate governance.

The board gives strategic direction to the operations of the corporation. And when things go wrong, the buck should stop with the board and not the minister.

The principle behind the creation of the board is to keep proper checks and balances on the executive management.

It is absurd that some other authority, in the form of the minister, has now usurped the functions of the board. Who knows he also has usurped the role of management?

BDC was enacted by an Act of Parliament as an investment arm of government funded by the tax payer. The Act also establishes the board and clearly defines its roles and functions.

The usurpation of the roles of the board by the minister in the hiring and firing exercise of the executive management runs contrary to spirit of the Act which established the board and defined its roles.

There is no convincing reason why the minister has concurrent powers with the board.

That power if anything should lie with parliament as an oversight institution and ultimate representative of the shareholders.

It is imperative that the BDC board reports to the minister as a representative of the executive arm of government. Such should only be for linking BDC with cabinet, principally the president, but also with Parliament.

For as long as the minister has the power to overrule the Board, the Board is itself as good as non-existent. No self-respecting individual would want to serve on such a Board. In fact we would be surprised if people of Marole’s integrity and self-respect together with others like Modise Modise are still on the BDC Board unless the impasse is resolved.

The current scheme of things calls for a thorough reassessment of the situation in order to ensure that going forward, the roles are not such duplicated to the extent of rendering the board a useless organ. As it is the Minister has been allowed the leeway to operationally micro-manage BDC, a role which in our view should not even be allowed the Board.

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