22 Feb 2017

The minister is responsible for appointing board members for parastatals that fall under his ministry’s portfolio responsibility, Minister for Presidential Affairs, Governance and Public Administration, Mr Eric Molale has said.

Responding to a question in Parliament from MP for Francistown East, Mr Buti Billy, the minister said the relationship was essentially one of shareholder (government represented by the minister) and the entity.

“As the shareholder representative, the minister will interact with the board of a parastatal in a manner, that will allow it to fulfil its governance role effectively and within the expected level of accountability,” he said.

The guiding compact in this case, Mr Molale said was the Act that established the parastatal, adding that “some parastatals do not have the Acts that establish them and are therefore expected to function in terms of the Companies Act.”

Board members, the minister said were appointed to provide strategic guidance and oversight over management of parastatals on behalf of the minister. He also said the logical expectation was that the two had to work together to ensure smooth functioning of a parastatal, as it had always been the case.

In addition, ministers and parastatal boards do sign shareholder compacts. These compacts define expectations and undertakings of the two parties with a view to better manage relations and working arrangements.

“Notwithstanding the provisions of the other applicable legislation, the parastatal shall as a minimum provide the shareholder with a quarterly performance report covering key strategic issues ,” said Mr Molale.

This, he said was in addition to the annual report that was submitted at the end of year. Furthermore, he said the chairperson of the board, the chief executive officer of the parastatal and the minister were required to meet on a regular basis to discuss the operations of the parastatal.

“I am not aware of interference by ministers on the work of the boards. It must be noted that parastatal as state entities, are required to carry out their functions in the public interest. In fact, most of the founding documents authorise ministers to give instructions to parastatals, if this is in the public interest. Such instructions are legally justified,” he added.

As a matter of governance, the minister said parastatals should always have boards, adding that it was a requirement for parastatals to have boards as defined by their Acts or other founding documents.

The composition of a parastatal board, he said was defined in its founding documents, adding that the same documents defined the minimum number of board members necessary for the proper functioning of a board.

Therefore, this provision, Mr Molale said provided guidance to the minister as the appointing authority to always ensure that a parastatal had a functioning board by ensuring that the board was operational. As per the requirement of the law and the principles of good governance, he said parastatals should always operate with a board.

MP Billy had asked Mr Molale to apprise parliament on the relationship between board members of parastatals with their respective ministers and if there was any cooperation between board members and ministers.

Francistown East legislator also wanted to know whether there was any interference by ministers on the work of the board, if there were any parastatals that operated without boards and to state the maximum time that parastatals could operate without a board. BOPA