A pragmatic agenda for boards of parastatals

At the recent inauguration of boards of nine agencies, the Federal Government continued on the path of unpreparedness with a middling charge to the Board members. Secretary to the Government of the Federation Boss Gida Mustapha conveyed what amounted to government’s strategic thrust to its Boards: shun corruption and do not interfere with the management of the parastatals.

Hello? Is that all? Really?

The government in the first place appointed those Boards two years into its tenure. The delay was inexplicable, the outcome nightmarish as it contained names of no fewer than nine deceased persons. Did no one check? It was one embarrassment too many.

Mustapha claims now that the inauguration of the Boards follows a thorough review of the processes and the appointments. The inauguration is government’sway of positively responding to the barrage of criticisms it received for the initial announcement. He then dropped the charge: “You are all enjoined to commit to achieving these mandates and to live above board. As you are aware, the present administration has zero tolerance for any form of corruption, and this stance must not be compromised in any way. The government will frown at and punish corrupt practices perpetrated by any board member as well as the management team of these agencies”.

There is much more at stake for the parastatals, however, for a government that has earned flak for poor service delivery. There should be deeper thought about the purposes of the boards, the policy thrust of the government and the role of the parastatals.

Nigeria needs a more meaningful agenda for the persons to steer our parastatals. There is so much at stake, and how we manage the parastatals would form a huge part of the narrative and our trajectory.

Nigeria has approximately 400 parastatals of varying structure and size. They range from the behemoth Nigerian National Petroleum Corporation through the Federal Road Safety Commission to the National Agency for the Control of AIDS (NACA) and on to the research agencies. The business of delivering public service effectively resides in the many parastatals. They are a critical arm of government, the executive arm that implements the policy directives of Government.

Unfortunately the Boards of these all-important agencies of government have often served as sieves. Appointment to the Board is ajob for the proverbial “big  boys”, not a call to exercise the highest level of fiduciary responsibility on behalf of the citizen stakeholder.

The government should institute a world-class corporate governance framework for the parastatals to give shape to the anti-corruption message which has so far been amorphous. Corporate and Allied Matters Act, Cap C 20, Laws of the Federation of Nigeria expects these external directors to set strategic direction and monitor the performance of the management of the firms. They should serve the best interest of the firms so as to preserve assets, further its business and promote its purposes. No director should abdicate his duties nor fetter his discretion in decision making.

The Boards should protect the interest of the Nigerian citizen as primary shareholder of these companies. The Government should consider adoption of the Code of Corporate Governance for Public Corporations as outlined by the Securities and Exchange Commission for publicly quoted companies. It provides a verifiable basis for measuring and monitoring the performance of boards, not a vague charge against corruption. The Boards of our parastatals represent millions of stakeholders and deserve even higher standards than those of public corporations that cater only to thousands of stockholders.  Provisions of CAMA on conflict of interest and the imperative of directors knowing the business of the companies they superintend if applied strictly would provide a template for anti-corruption.

It is difficult to reconcile the charge on the boards “not to interfere” with the management of these parastatals with the express demands of CAMA and extant codes of corporate governance that requires that the Board’s duty is to “ensure proper management of the company”.

Boards are required to focus on strategic issues, provide intelligent “capital” including ideas to enhance performance, networking and corporate best practices and empower management while holding them accountable.

The FG should be demanding more from the boards and management of the many parastatals that have ensured strong government presence in strategic areas of national life. They should be aiming for higher performance indicators and better service delivery. With clearly defined and measurable performance objectives, as well as new Corporate Governance Standards for Public Agencies, fighting corruption would be easier.