Is virtuous corporate governance in Botswana a Phantasm? –Part 2
Let us continue our discussion on this seemingly impossible task in our economy. It is important to remember that the nature of corporate governance in an economy is determined by the conduct and practices of boards of directors and no one else. Some incompetent folks sitting on these boards, especially boards of state owned enterprises tend to apportion the blame to political interference. This is just a lame excuse, why not resign if that is the case because that is the standard practice in the modern world. We all know that they cannot resign because appointment to a board in our country is considered by many as one of the greatest honours a citizen can ever receive. It seems like folks cannot do without the sitting allowances and periodical trips to luxurious resorts.
An appointment to a board of directors should be considered as an opportunity to make a meaningful contribution to the growth and development of the economy and the country. It’s supposed to be a challenge for folks to prove their corporate leadership mettle. It is not an opportunity for boasting in the malls and photo shoots with crocodiles and elephants in the Chobe wilderness as the so called ‘corporate executives’ seem to think.
Our corporate sector is still at an infancy stage and requires full attention from its custodians. There is no room to take eyes off the ball. Just last week it was reported in the local tabloids that Morupule B project has accumulated cost overruns estimated at P20 billion and that the plant faces high collapse exposure risk. The second sitting report of examination of statutory bodies and state enterprises for the financial year ended 31st March 2011 stated that Botswana Meat Commission incurred a total comprehensive loss of P87.82 million (2010: P115.13) and P87.69 million (2009: P109.39 million) respectively. The report stated that this financial performance was indicative of the existence of a material uncertainty over the Group’s and commission’s ability to continue as a going concern. The committee reported that the same BMC has three key bank accounts that are not regularly reconciled, even in the instance where they are reconciled; this is not reviewed by the appropriate levels of management to ensure that the reconciling items are valid and are treated appropriately. There is no reason to believe that there has been any improvement since the publishing of this report because there are no positive reports coming out of Lobatse.
I urge the followers of The Board Room to get copies of the parliamentary reports on state owned enterprises and read for themselves. What you will find in there compatriots, is heart-breaking! I do not believe that after reading these reports, you would have any admiration for folks who have served and those still serving on these boards. I do not have any hesitation in positing that had it not been for these folks, the economy of Botswana would have grown in leaps and bounds. These folks never apply themselves in their company oversight roles. Most of them do not possess the requisite skills to oversee the implementation of company strategy as expected of board of directors.