Namibia will continue to face numerous corporate governance challenges that have seen several state-owned enterprises (SOEs), including the Namibian Broadcasting Corporation (NBC), underperforming.
At the core of governance is leadership.
The gloomy situation in which the state-run NBC finds itself is a result of the unabated weakness in corporate governance imperatives in the country’s SOEs. It is not about insufficient funding; a challenge in corporate governance is the primary reason for the ongoing labour strike and other performance issues at NBC.
To set the scenario, the Broadcast Act 9 of 1991 that establishes NBC, summarises four key objectives that NBC, as a public broadcaster, must fulfil. The corporation must perform the following public broadcasting services: (a) to inform and entertain the Namibian public; (b) to contribute to the education and unity of the nation and peace in Namibia; (c) to provide and disseminate information relevant to the socio-economic development of Namibia, and (d) to promote the use and understanding of the English language. For that reason, its main mandate is to provide public good – the service that is provided without profit to all members of society.
Countries, including Namibia, have not always pursued these objectives with consistency, commitment or ability. The basic issue, therefore, is whether NBC should be considered mainly as an industry producing a commercial ‘product or service’ and associated totally with marketing. Or should NBC be first of all an institution that facilitates access to culture, unity of the nation, knowledge, education and enlightened entertainment for all the people? In other words, should NBC be assimilated to education and other public services or strictly to business? The NBC should remain a non-commercial SOE. Public broadcasting has been perceived almost everywhere as an instrument of societal and cultural development – much more than as an economic activity.
The Public Enterprises Governance Act 2 of 2006 makes provision for the efficient governance of SOEs, including NBC, and the monitoring of their performances. Clearly, the State has put in place rules, practices and processes by which SOEs should be directed and controlled. As argued above, it is flimsy to say inadequate funding is responsible for the poor performance of NBC. The corporate challenge lies with leadership that should guide and control the implementation and ensure strict compliance with the relevant legislation.
The state is the sole owner (shareholder) of NBC. The shareholder established the public broadcaster to perform to the satisfaction and expectations of the shareholder. Since the establishment of NBC, the state, through the line ministry, continues to stumble when appointing the board of directors for the public broadcaster. As a best practice of good governance, the State or shareholder appoints a board of directors to provide strategic directions to the corporation. A competent board will improve the corporation’s results – both financial and social – and make sure the owners’ assets and funds are used appropriately. Accordingly, the state should appoint a competent board of directors to monitor and guide the management team of NBC.
A board of directors has the task of dealing with issues that are highly complex and often technical. Therefore, recruitment of the board of NBC should only target persons who have an extensive understanding of public broadcasting.
Moreover, most governance experts favour the notion of boards having a majority of independent directors. The NBC board of directors should have a composition that incorporates all of the necessary skills and abilities to make sound decisions for the corporation. Unfortunately, this essential facet of corporate governance is broadly ignored when recruiting members of the board.
The other unabated challenge for NBC is financial management. It is argued here that the poor financial performance of an SOE is a result of weak management practices. The public broadcaster should ensure sound financial management with the funds
allocated by the state annually.
Again, this can only be realised with management who can align the finances to the strategic objectives of NBC. If one has to go by newspaper reports, it is unethical for the board to have authorised payment in bonuses to management of N$5.4 million while negating better working conditions for employees and procuring better equipment to enable employees to effectively perform their duties.
Prudence should be observed in financial management, including in the contracting and use of loans and the estimation of resources.
To this end, the board of directors need to develop strong internal controls and monitor them often.