• October 15th, 2019

Four annual board meetings not sufficient for ailing SOEs – NHE chairperson

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Front Page News

Lahja Nashuuta Windhoek-The board chairperson of the state-owned National Housing Enterprise (NHE) Sam Shivute says the directive by the Ministry of Public Enterprises to only have four board meetings per annum, for which board members are paid sitting fees, would not help boards tasked with turning around ailing state-owned enterprises (SOEs). Shivute, who also serves as the chairperson of the University of Namibia Council, said although he did not yet receive the directive from the minister, for him the suggested number of meetings are just not enough for board members to articulate the challenges and find solutions for SOEs currently in a crisis. “For example, boards are responsible for the recruitment of a chief executive officer (CEO) and this process cannot be concluded in one or two meetings. All factors considered, the process of recruiting a CEO can take up to three meetings and it is possible not to find a suitable candidate during the first round of recruitment and the process will have to start again,” Shivute said. He nevertheless admits that matured, well-functioning institutions with strong executive leadership will not need many board meetings. However, Shivute contends that for SEOs in a crisis or facing a multitude of strategic challenges, a board may be required to have more board meetings than the recommended four meetings per annum. While some experts hailed the directive as an effective cost-cutting measure and in line with President Hage Geingob’s call for ministers to introduce such measures, Shivute said there is the misconception that people are serving on parastatal boards to make money, which is not the case. “This cannot be correct in all cases. The majority of people that I know serve on boards not for money but as part of their commitment to serve their beloved country Namibia and as part of their social responsibility.” He said unlike in other countries in the region, in Namibia, on average, a director on the board of parastatals would be remunerated less than N$100,000 per annum for more than four meetings. “Considering the reputational risk, strategic corporate challenges, strategically managing corporate politics and ensuring that an institution delivers on its mandate, it can safely be argued that not all directors on the board of parastatals in Namibia serve for the sake of monetary gain,” Shivute maintained. The Minister of Public Enterprises Leon Jooste, in a recent interview with Nampa, said SOEs boards should only have four paid board meetings annually starting from 2018. Jooste said under normal circumstances, a board does not have to sit more than four times a year, adding that they are more than welcome do so, but on a pro bono basis. Should there be a pressing need, which will require a given board to meet more than four times, such a board will be compelled to apply for an additional board meeting, which will be scrutinised by the ministry, he said. “We will pick it up in their budget. If they want to meet more often than that, they do that pro bono, so they are not paid. I would not have a problem necessarily. It should not be necessary to meet more than four times,” Jooste had responded to questions by Nampa on how the ministry intends to curb the abuse of funds by the boards of public enterprises in the form of sitting fees.
New Era Reporter
2018-02-21 09:08:13 1 years ago

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