02 Jul 2015

Ministry of Agriculture has signed a shareholder compact agreement with its parastatal organisations.

Parastatals involved in the signing of the shareholder compact with the ministry include, Banyana Farms, Botswana Agricultural Marketing Board, Botswana Collage of Agriculture, Botswana Horticulture Market, Botswana Meat Commission and Botswana Vaccine Institute.

Speaking at the signing ceremony held in Gaborone, Minister of Agriculture, Mr Patrick Ralotsia said the shareholder compacts were designed to enhance shareholder oversight and governance of public entities through an effective relationship between the boards and the shareholder, who in the case is government.

He stated that the ceremony was a result of the 2012 Cabinet decision which approved guidelines for shareholder oversight over parastatals.

“The objective of this decision was to institutionalise a set of consistent practices whereby ministries can exercise effective oversight over parastatals across the whole government, as well as to monitor and evaluate their performance,” he said.

He noted that the guidelines were developed due to some challenges in the operations of parastatals such as inadequate performance, poor resource management, slow adaptation of best corporate governance practices, inadequate coordination in the delivery of services, maladministration and others.

Mr Ralotsia also noted that the signing of the shareholder compacts would also create a culture of responsibility, transparency and responsiveness.

He said the exercise started in 2013 for the ministry of Agriculture, stating that then and today the ministry was engaged in laborious activities to ensure that thorough job is done in preparation of the compacts.

“Since the beginning of the exercise, the Public Enterprises Evaluation and Privatization Agency which is tasked with overseeing of the implementation of the 2012 Cabinet guidelines, has been very helpful,” he said.

Speaking on behalf of shareholder parastatals, BMC board chairperson, Dr Thapelo Matsheka, said shareholder compacts were very important in order to put in place an effective oversight mechanism.

Dr Matsheka stated that they allow for role clarity between the board, the management and the shareholder.

“Often time when there is no such clarity, it is not clear what the roles and duties of the board are, and as a result there is no one who takes responsibility, and effects on decisions becomes totally indefensible,” he said.

Mr Matsheka indicated that there was a long process that runs through government machinery and as a result the shareholder compact would help to accelerate, as it allocates responsibilities or decisions that were taken within government. Ends