Concerns aired ahead of ministry integration
Finance ministry’s capacity questioned
The public enterprises ministry has been too quickly dismantled, an expert believes.
Concerns have been raised ahead of the anticipated integration of the ministry of public enterprises into a directorate of the finance ministry, with questions asked on whether the latter ministry has the capacity to properly regulate commercial public entities.
After integrating into the finance ministry, the public enterprise ministry is envisaged to become a company - in line with a recommendation by the then High-Level Panel on the Namibian Economy.
Namibian Sun approached governance experts on whether enough work had been done to ensure that public entities were keeping good corporate governance standards.
Academic Johannes Coetzee noted that while the categoric distinction between commercial and non-commercial public entities had been made, there was still nothing compelling these entities to release reports on a timely basis as required by the Companies Act.
Still not accountable
Coetzee said the rate at which public entities published their annual reports had not improved, with no board members held accountable in their personal capacities for the performance of the companies they direct.
“The current state of state-owned enterprise [SOE] governance structurally improved in terms of categorising SOEs in profit-making and not profit-making entities. However, not much improved in terms of availability of annual reports, audit reports and accepting accountability, not to mention personal liability of board members.
“TransNamib is a case in point, and Roads Authority; not to mention August 26,” he said.
According to him, information was lacking with regards to the management of public entities, particularly regarding financial statements.
“Based on profit-making entities, we need balance sheets, income statements, Return on Investment, liquidity or working capital, gearing ratios, bad debt in relation to profit to make a proper assessment. It is not a question only of paying dividends to the state,” Coetzee said.
“However, how much [are] such dividends supposed to be? Do we have such information in the absence and/or late tabling of annual reports and audit reports? What were the targets?”
Ministry hastily dismantled
The public enterprises ministry was also being dismantled too quickly while persons with the requisite financial management skills were not being appointed to serve on the boards of public entities, Coetzee said.
“The ministry of public enterprises was dismantled quite abruptly, [seemingly] with inadequate planning and coincided with [Leon] Jooste leaving the political scene.
“Public officials sitting on boards without having the financial and/or business capacity to represent political preference contributed substantially to non-performing commercial entities,” he said.
Calibre of boards
Namibia Stock Exchange CEO Tiaan Bazuin said public entities’ boards needed competent directors with the requisite skills.
“A lot depends on the quality and calibre of the boards appointed to carry a large responsibility for the governance of the entities.
A notable concern for him was boards meddling in the affairs of a public entity, or a general lack of interest.
“We have certainly seen enough examples where governance was not properly applied and the consequences were dire; either where the board was micromanaging the company or where the board was abdicating its responsibilities substantially, and both of these scenarios are disastrous.”
After integrating into the finance ministry, the public enterprise ministry is envisaged to become a company - in line with a recommendation by the then High-Level Panel on the Namibian Economy.
Namibian Sun approached governance experts on whether enough work had been done to ensure that public entities were keeping good corporate governance standards.
Academic Johannes Coetzee noted that while the categoric distinction between commercial and non-commercial public entities had been made, there was still nothing compelling these entities to release reports on a timely basis as required by the Companies Act.
Still not accountable
Coetzee said the rate at which public entities published their annual reports had not improved, with no board members held accountable in their personal capacities for the performance of the companies they direct.
“The current state of state-owned enterprise [SOE] governance structurally improved in terms of categorising SOEs in profit-making and not profit-making entities. However, not much improved in terms of availability of annual reports, audit reports and accepting accountability, not to mention personal liability of board members.
“TransNamib is a case in point, and Roads Authority; not to mention August 26,” he said.
According to him, information was lacking with regards to the management of public entities, particularly regarding financial statements.
“Based on profit-making entities, we need balance sheets, income statements, Return on Investment, liquidity or working capital, gearing ratios, bad debt in relation to profit to make a proper assessment. It is not a question only of paying dividends to the state,” Coetzee said.
“However, how much [are] such dividends supposed to be? Do we have such information in the absence and/or late tabling of annual reports and audit reports? What were the targets?”
Ministry hastily dismantled
The public enterprises ministry was also being dismantled too quickly while persons with the requisite financial management skills were not being appointed to serve on the boards of public entities, Coetzee said.
“The ministry of public enterprises was dismantled quite abruptly, [seemingly] with inadequate planning and coincided with [Leon] Jooste leaving the political scene.
“Public officials sitting on boards without having the financial and/or business capacity to represent political preference contributed substantially to non-performing commercial entities,” he said.
Calibre of boards
Namibia Stock Exchange CEO Tiaan Bazuin said public entities’ boards needed competent directors with the requisite skills.
“A lot depends on the quality and calibre of the boards appointed to carry a large responsibility for the governance of the entities.
A notable concern for him was boards meddling in the affairs of a public entity, or a general lack of interest.
“We have certainly seen enough examples where governance was not properly applied and the consequences were dire; either where the board was micromanaging the company or where the board was abdicating its responsibilities substantially, and both of these scenarios are disastrous.”
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