It’s vital to inculcate a corporate culture of PEs autonomy

Thursday, February 01, 2018

As government plans to introduce a public enterprise sector reform programme, to engender –improved corporate governance, operational efficiency, performance, as well as pay dividends to government, it’s to inculcate a corporate culture of PEs autonomy, to the extent that Boards and Management the latter in particular, are empowered to govern the affairs of state enterprises without undue, or other political interference, from government.

As a best practice, and as it obtains in other parts of Africa, Boards, and not government, must set corporate policy with regard to remuneration, and rewards, for management and employees, of course, within wider scope, of government policy setting.

It is not uncommon, to have CEOs/MDs of State-owned Enterprises in Africa, especially those performing PEs - to earn more salary than their policy-bosses and counterparts in the civil service!

Yes, let us not be entangled by the old misplaced cliché, which, I’m sure someone will whisper in your ears…that “how can they earn more than their bosses…”; this is a flawed argument, as these are highly trained and experienced technical and business managers, who, more than their counterparts in private industry, are managing strategic assets with balance sheets, of significant national economic consequences for performance; and worse, for non-performance.

Under a new Performance Contract (PC) dispensation, it would be better to suggest we concentrate on the Sanctions side of the equation, and define the parameters, upon which countervailing punitive measures are brought to bear, for poor performance by Management and Boards.

A key preserved area of executive responsibility of our government, within a revived PC framework, is payment of annual Dividend to Government as Shareholder by Public Enterprises. It is important that performing SoEs pay annual dividends to government (i.e., those, that could be graded as “Class One” – GPA, Gamtel/Gamcel, a turn-around NAWEC and GNPC.

SSHFC is deliberately omitted from the above classification; although, in principle, it has the stature of such enterprises; but, nonetheless, requires a different governance framework, and a level of autonomy and independence, far more than those mentioned as so-called Class-1 PEs.

Recognize also, those SoEs with heavy social service responsibility such as Gambia Ferries, NRA, and design special schemes of Performance Contract monitoring, evaluation, rewards and sanctions.

A Guest Editorial