04 Dec 2014

Ministry of Lands and Housing and Botswana Housing Corporation (BHC) have entered into a performance agreement called the shareholder compact which sets out the joint commitment to provision of affordable housing to Batswana across the country.

Speaking at the signing ceremony, Lands and Housing minister, Mr Prince Maele, who signed on behalf of the government, said following its concern about the below par performance, maladministration, poor resource management and unethical issues in the running of parastatals, the government required ministries to sign shareholder compacts with their Corporations.

The government, he said then tasked PEEPA to fully evaluate the performance of the parastatals, which on its own revealed a number of findings, including among others, issues of unsatisfactory performance, slow up-take of corporate governance, as well as inadequate coordination in the delivery of services.

Minister Maele said there were issues on corporate governance which bordered on; maladministration, conflict of interest, misuse of resources, compromised role clarity through the appointment of members of board of directors to management.

The above, he said were also observed by the Directorate on Corruption and Economic Crime.

“While these and other issues were not necessarily emanating from BHC alone, but from across parastatals, they compelled government to formulate a shareholder compact as a performance agreement between the shareholder and parastatals,” he said.

The Shareholder Compact, Mr Maele said was one of the corporate governance best practice tools and was mandatory to all parastatals.

This performance contract instrument between the shareholder and the parastatals, he said was designed to monitor performance of the Public Enterprises sector in Botswana, facilitate alignment of parastatals to their line ministries.

It also clarifies the responsibilities of boards and the ministries and spells out the undertakings by the Ministry and Public Enterprises, for successful execution of the mandate, he said.

The compact, he said was based on, and was subject to, the provisions of the BHC Act CAP 74:03 which set out the mandate, objectives and functions of the corporation and the powers of the board.

Performance, Mr Maele said had always been and remained of great interest to the government and to him as an individual.

He noted that as a parastatal that had been mandated with provision of housing to Batswana, under his Ministry, it was imperative for him to fully appreciate BHC’s performance and challenges.

The shareholder compact would clearly articulate the strategic intent of the shareholder to the parastatal, outline the parastatal’s strategic objectives, performance indicators and targets, outline the undertakings by the ministry and the board for successful execution of the mandate and align performance expectations of the parastatal with the ministry strategy for effective monitoring, he said.

Furthermore, Minister Maele said to facilitate the operationalisation of the shareholder compact, the government, in 2012, approved the guidelines on shareholder oversight which addressed the challenges parastatals met during the execution of their mandate.

Government, he added expects BHC to subscribe to the overarching good corporate governance principles of fairness, responsibility and transparency in all its operations.

“You are also expected to reassess systems of governance on an on-going basis and adhere to the Board Charter and other governance related policies,” he added.

For her part, BHC board chairperson, Dr Bolelang Pheko, said the shareholder compact would give the corporation and the shareholder an opportunity to reflect on the roles for the execution of the housing delivery mandate.

In its endevour to effectively implement this compact, Dr Pheko said the corporation had put in place a strategic plan that was aligned to the ministry plan and the National Development Plan.

This plan, she said covered how the corporation would manage its risks, market and communicate its products, enhance customer care, the delegation of board responsibilities to management, as well as its finance and borrowing models. ENDS