FINANCE minister Patrick Chinamasa last week blasted line ministers for failing to provide effective oversight over the parastatals under their ambits.
BY VENERANDA LANGA
Chinamasa said this in the National Assembly while presenting the Second Reading Stage of the Public Entities Corporate Governance Bill, whose crafting was aborted after chairperson of the Parliamentary Portfolio Committee on Finance, David Chapfika, asked for public hearings to be held first on the Bill before it is passed.
The Bill, if passed, will curb graft at State Enterprises and Parastatals (SEPs) whose maladministration has caused the country to lose millions of dollars.
“Previous efforts to encourage compliance with sound corporate governance principles such as the Corporate Governance Framework for State Enterprises and Parastatals in 2010 and more recently, the National Code on Corporate Governance in 2015, have gone largely unheeded by most public entities and in equal extent, by their responsible line ministers,” Chinamasa said.
“Resultant, the Auditor-General’s report on State enterprises and parastatals for the year ending December 31, 2016 once again revealed ongoing deep-rooted and far-reaching governance problems within the State enterprise sector and self-evidently underlined the continuing failure by line ministers to meaningfully address those problems.”
The Finance minister said the Bill would ensure SEPs make a positive contribution to national economic growth.
“The Public Entities Corporate Governance Bill is designed to address these issues by bringing order, structure, transparency and consistency to this important sector of our economy. It also seeks to further empower line ministries to exercise far stricter oversight of their respective entities and to ensure that those entities operate in line with sound corporate governance principles and practices as enshrined in the Bill.”
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Chinamasa said the Bill will create a new Corporate Governance Unit, a department within the Office of the President and Cabinet, to provide an advisory and centralised support mechanism for line ministries to ensure compliance with the Act, and maintain a database of qualified candidates for appointment to boards of public entities, among other duties.
The Bill will also ensure that appointment of board members would be done in a transparent manner and that board members and senior management declare their assets.
It will also curb the issue of senior management earning hefty salaries, as there will be a clause in the Bill to allow a ceiling to be set on the remuneration board members may receive, as well as set salary ceilings depending on the profitability of the SEP.
