08 Apr 2014

Government has not taken a formal position to completely stop the practice of appointing permanent secretaries (PSs) as members of boards of parastatal organisations, the Minister of Finance and Development Planning, Mr Kenneth Matambo, has said.

Responding to a question in Parliament from Lobatse MP, Mr Nehemiah Modubule, Mr Matambo explained that initially PSs were appointed to the boards of parastatals under their portfolios as a way of ensuring direct shareholder oversight over these entities.

This practice, he said, was more prevalent in the past owing to insufficient governance and board service experience in the country. He said this was to safeguard public investment in parastatals and ensure operational alignment between ministries and their parastatals.

In recent years, Mr Matambo said ministries had been appointing senior officers other than PSs into boards of their parastatals. However, he said it was observed that serving in boards required substantial commitment in terms of time.

Permanent secretaries found it difficult to give the boards adequate time given the demanding requirements of their positions. In addition, he said there was need for boards of parastatals to have a degree of operational autonomy in the exercise of their functions, whilst ministries continued to provide oversight and policy guidance.

This, he said was also in line with international corporate governance best practice. Furthermore, Mr Matambo said government had recently approved guidelines for oversight over parastatals.

The guidelines, he said provided for the conclusion of a performance contract between the government as the shareholder and boards, as well as for transparent appointment of boards with the right competency mix to lead and provide strategic guidance to the parastatals. This arrangement, the minister said he believed would facilitate independent and impartial decision making by boards of parastatals. 

Mr Modubule wanted to know whether government had stopped having PSs as members of boards in parastatals under their ministries as the current arrangement did not subject the board’s decision to independent and impartial scrutiny. ENDS