…Says he is ready to transform SOEs
“Never wrestle with a pig in the mud because you get dirty in the process as well, and besides, pigs likes it.”
Minister of Public Enterprises Leon Jooste knows all too well about this old adage, but he also knows that to transform the dirty and poorly performing state owned enterprises in the country, he needs to remove his fancy suit and jump into the SOE mud.
Jooste says he is cognisant that good policy, solid legislation, financial support and clever, creative commercial strategies will not be enough to effect the change required.
In fact, he says the only way that government will succeed in transforming the public enterprises will depend on its ability to create an environment wherein it attract and retains Namibian men and women of character; people with skills, experience and integrity, to serve as Board members of public enterprises. “If we manage to attract individuals with these characteristics, they will equally be able to attract executives with the same characteristics and this will lead to a positive corporate culture that shall become ingrained in the DNA of each and every Namibian Public Enterprise,” he said.
Jooste said he will also tackle the issue of bonus payments given to SOE bosses, regardless of whether their entities are profitable or not.
The remuneration of Board members and Managers of Public Enterprises will in future be incentivized and performance based, he said.
“Some of these bonuses are not really performance bonuses but guaranteed bonuses captured in their employment contracts.
We have designed a new template employment contract to be used in future to curb this. New Performance Contracts will be aligned to the Integrated Strategic Business Plans and we will be able to monitor performance from our centralized system,” he said.
Professionals have often steered clear from availing themselves to serve on SOE boards due to the undue political influence exerted on boards by politicians, especially ministers.
Asked whether he is prepared to talk to his Cabinet colleagues to urge them not to interfere politically with the boards, he retorted: “Yes, there is a difference between political interference and political intervention. Political interference usually has negative consequences while political intervention may be required under exceptional circumstances.”
He also addressed claims that the PEGA Bill gives him overreaching powers.
“I have always disagreed with this notion. The Bill specified that all of the major functions given to the Minister must be done in consultation with Cabinet. All Ministers have particular powers through certain Acts of Parliament and this is not unique at all.
The Constitution also provides for both individual and collective responsibility (through Cabinet) and I see these powers as part of the collective,” he said.
While responding to contributions and questions after lawmakers discussed the Public Enterprises Governance Bill in the National Assembly, Jooste said an active performance management process will be introduced to evaluate Board and Executive performance in line with the Integrated Strategic Business Plan.
“All Public Enterprises (PEs) will be compelled to implement performance management systems and the Ministry will then monitor performance through our own performance management system. New Performance Agreements will be aligned to the measurable key performance indicators of the approved Integrated Strategic Business Plans and will also include corporate governance targets,” he said.
Jooste said if a Board fails to achieve the corporate governance targets, such a Board may be dismissed, adding that his ministry foresees a significant improvement in compliance as a result of the provision.
According to Jooste, he looks forward to the day where long overdue audited financial statements and annual reports become a thing of the past.
He also indicated that a new system to select and appoint members of the Boards of public enterprises will be introduced next year with an entirely new transparent system.
“The Board selection for Air Namibia and TransNamib have already followed these guidelines by advertising in the media to invite members of the public to apply whereafter a Nomination Committee shortlists and an interview panel that include expert members of the private sector conduct the interviews,” he explained.
The ministry, he said, has also established an in-house database of potential Board members and this database will soon be transformed into an electronic e-recruitment system to further enhance effectiveness.
“The size, composition and skills required for each Board will always be approached on a case-by-case manner as each PE and the situation it finds itself in will always be different at any given time. Board members must declare their interests and in cases where a potential conflict of interest cannot be managed, the person will be instructed to vacate the seat. The Bill makes provision for an elevated level of accountability and there is legal provision for Board members to be held personally liable for any form of reckless trading or maladministration,” he pointed out.
Jooste, who has a mammoth task to uplift SOEs out of the slumber of dismal performance, has often said that the reform of Public Enterprises will take time and underscored the need to resist undue pressure in order to minimize potential risks.
“Having said this, I reiterate that the transformation of the Namibian economy will not be possible without the successful reform of our PEs. The role of these entities and Treasury’s exposure through them is simply too immense to ignore, and it is now our collective responsibility to take bold but calculated decisions to cause the effect required,” he said.
Jooste gave assurances that the that due process will always be followed and that all forms of reform will be based on solid technical evidence and guided by the principle that the net outcome must always be in the best interest of the nation.
“This Bill will dramatically strengthen our governance infrastructure and allows for the State as the shareholder to be transformed into an active, professional shareholder with the required specialist skills to represent the nation as the custodian of these important State entities,” he said.