Statutory Bodies Report orders proper remuneration for CEOs

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The report of the secondsitting of the parliamentarycommittee on StatutoryBodies and the State Enterprisesfor the fi nancial yearended 31st March 2011 ordersthat all Chief Executive Offi -cers (CEOs) of Statutory Bodiesand all State Corporationsand Entities and their allowances,as well as allowances ofBoard of Directors be subjectedto a proper remuneration policyto be put in place by Government.The report claims thatthis will increase the quality ofthe execution of the public serviceobligation.The fi rst report in 2010 recommendedthe need for governmentto clamp down on excessiveremuneration of seniorexecutives of statutory bodiesbut that has not happened.

 

Thelatest report wants governmentto establish adequate proceduresto assess the performanceof CEOs of Statutory bodiesand to ascertain whether theprocedures used by the boardsto assess the performance ofCEOs are adequate. The committeeis concerned on the dualrole some CEOs played withinthe statutory bodies, where theCEO also assumed the role ofthe chairperson of the board ofdirectors. This arrangement isnot in line with tenants of goodgovernance and accountability.The board advises the governmentto reconsider theappointment of certain individualson multiple board directorshipsin statutory bodies.It recommends the governmentavoid a situation of appointingemployees of certain parastatalsto board positions in otherparastatals. “The governmentappears to be giving statutorybodies/parastatals far more subventionsand grants than theyneed for their operations.

 

Thishas resulted in huge surplusesbeing reported by most statuarybodies of which some whollydepending on government forfi nancing and some concentratingmore on investing the excessfunds than satisfying theirmandate,” says the report.It revealed that huge surplusescause excess liquiditywithin the economy and exertstoo much on Bank of Botswanato mop such excess liquidity,which is a cost to the bank. Thecommittee advised that excesssurplus should be returned backto government for use in moreproductive investments. Thecommittee also recommends amore effi cient way of managingexcess cash.It further states that, “in recognitionof the Increasing Rolethe Statutory Bodies/ StateOwned Enterprises (SOEs) playto promote economic growthand its contribution to staterevenue, that a dedicated Ministryof SOEs be establishedwhich will scrutinise and provideoversight and governanceover such bodies.”

 

In this regard,the Committee believesthe resultant effect will be theestablishment of the SOEs Actthat will provide amongst otherthings for the creation of severaldifferent types of agencies/bodiesthat have varying degrees ofcommercial structure and focus.Government is further advisedto establish adequateprocedures to assess the performanceof individual CEOsof statutory bodies/SOEs andto ascertain whether proceduresused by the Boards to assesstheir performance are adequate.On other issues, the committeerequests the government tofast track the whistle blowinglegislation that is designed toprotect witnesses who divulgemisappropriations and embezzlementof funds including anyanomalies. The committee recommendsthat such witness whoappears before it should be protectedagainst possible reprisals.Further, the Ministry of Financeand Development Planningshould be urgently requestedto legislate the internal auditfunction in Botswana in view ofthe important role the internalauditors play as whistle blowers.