The board of directors/trustees at our parastatals or SOEs have been making newspapers headlines mostly for the wrong reasons.
I am a political scientist by training so in this piece I will have to trespass into the territories of lawyers and business students.
At all the business and law schools apparently people are told that every entity/association must have a board of directors to be recognised as a legal person.
So you would have hunting or stamps collector association required to have a board.
Or you would have a board of directors within a board – Namibia Tourism Board, Electricity Control Board, Namibia Investment and Development Board, Namibia Agronomic Board, Central Procurement Board of Namibia etc.
Do we really need board of directors – the middlemen – at our parastatals? Does a news agency like Nampa need a board of directors? Do we really need a board of directors at most of these parastatals?
Or are we simply doing the things that some of you were taught at business/management schools, that corporations ought to have boards of directors? Or is this the so-called corporate governance structure?
I would say, no. First, you have the CEOs or MDs as some of us from the old school would call them.
And below the CEO you have a host of highly paid managers – HR, IT, marketing, operational, PR, credit or even entertainment managers.
And one should assume that all these managers are people who are well qualified.
On the contrary some of the people on the boards have questionable qualifications. Some of these people are not always appointed on merit because is not about what you know but whom you know in this country.
As an aside you will have people being taken from the cattle post to a diplomatic post or a villager to a CEO of city or a town and you expect these people to perform.
The question is: where do these boards of directors direct our parastatals to.
They are supposed to provide direction, support and guidance to the CEO the line ministries and eventually the president. But most of the time they have been found wanting.
In fact the rot at our parastatals starts at the top of the pyramid – with the board of directors or trustees.
The spectacular collapse of the SME Bank had a board of trustees at its helm and some of them were even borrowing money from it.
These were money that was meant for the proverbial ordinary man on the street.
And mind you the trustees had well-paid jobs in addition to their hefty sitting allowances.
So you would have executive officers of state entities in cahoots with boards of directors writing their own employment con- tracts. There is thus a symbiotic relationship between the executives and the directors.
Some of these headlines should concern every Namibian who is worried about the future of our society: “RA spends over N$2. 6m to discipline, fire two managers”, “RA spends N$160 000 on IPads for board members”, “GIPF board fee bonanza”.
The Namibian last year reported that the Namibia Tourism Board paid lawyers N$1.4 million to preside over an internal disciplinary process against a finance manager who was dismissed in 2025.
Then last year, about N$8 million was spent to buy cars for six managers at the Namibia Agronomic Board.
How does one justify all that?
Recently it was reported that managers at the Namibia Airport Company bought company cars for a song.
Similar story is being investigated at the Namibia Institute of Pathology.
Our SOES have become milk cows for both board members and lawyers.
When they are broke the board would call an emergency meeting and then claim their hefty sitting allowances.
And some of these meetings take just an hour to conclude.
Then the lawyers would enter the scheme.
They have to attend to disciplinary hearings and lengthy legal battles that drain million in public funds precisely because the board of directors/trustees and top managers have messed up.
One wonders how much have been spent to trace the stolen/missing SME Bank money the SSC or the former Offshore Development Company.
Truth be told, most SOEs have runaway salaries willingly approved by their respective boards, or even without their approval in some instances.
Some few years or so ago the then director general of the cash-strapped Namibian Broadcasting Corporation, Albertus Aochamub, was handsomely rewarded with N$90 000 as a ‘performance bonus’ and mind you this came against the background of an institution that was technically bankrupt and desperately looking for a government bailout.
The point is that high salary and benefit packages are bound to jeopardize the broader mission for which parastatals were created in the first place.
And that mission is to provide goods and services to the public at reasonable prices and where they do make profits, to plough them back into State coffers to contribute towards the overall development of the country, and not to reward individuals at the expense of the taxpayer.
Therefore, we can’t meaningfully reform the parastatals sector unless we address the thorny issue of stratospheric salary and benefit packages of CEOs and senior managers at our parastatals.
These salaries represent a siphoning off of state resources for private advantage and are equivalent to an unfair distribution of state revenue.
What is to be done as Lenin would ask before the Russian Revolution? Remember that there was once a State-Owned Enterprise Governance Council composed of some senior politicians who were at one stage also involved in the ‘study’ and ‘restructuring’ of parastatals.
And in 2006 the National Council held hearings on how to reform SOEs. Nothing came out of all those exercises.
Then the now defunct Ministry of Public Enterprises was created and The SOEs Governance Council was incorporated within the new ministry.
And at that time I argued that we should do away with the idea of a ‘line’ ministry because there is now a fully-fledged ministry responsible for running, managing and overseeing the affairs/activities of the 80-plus SOEs.
The public enterprises ministry has since been incorporated within the ministry of finance. And in a twist of events last year we were told that the Prime Minister would assume direct oversight of SOEs.
In my view this is a non-starter.
The PM has got a whole army of inefficient civil servants to oversee. Government has now set up a panel to reform the parastatals.
So don’t expect much from this latest gimmick because what PM Ngurare and the Namibian Cabinet would give us is the same old wine in new skins.
If we cannot get the perspective right; then forget about the so-called reforms and turn-around/turnabout measures being suggested by government. The much-awaited “blueprint” for the restructuring of parastatals has been a total failure.
Here is my modest suggestion: Put to an end to unnecessary foreign travel by CEOs and board members, merge some of the entities or even incorporate some into the line ministries.
The layman’s question is: what use are the boards anyway?
The pathetic part is that the directors are part of the problem but are never held liable when the entities go bust.
Thus we should cut out these middlemen [called boards of directors/trustees] between the various line ministries and SOEs, with their hefty sitting and travel allowances.
The S&Ts perks culture.
The NIPDB was notorious when it came to this excessive traveling.
And just last month the board chairperson of the struggling NHE was in China on official duty.
I have in the past suggested that SOEs must conceptually be thought of as ‘directorates’ within ministries, and thus no need for a ‘board’, the middleman.
The various SOEs would deal directly with their respective line ministries.
There is nothing complicated in reforming the parastatals sector.
But we have to carry it through to its logical conclusion instead of dilly-dallying around.
