Government has tasked the State Enterprises Commission (SEC) to come out with a code of conduct for boards that will spell out the basic principles and standard corporate governance protocols to be observed by board members.
Speaking at the signing ceremony of the 2019 performance contracts between the boards of directors and management of state-owned enterprises (SOEs) as well as subvented agencies and government, in Accra on Wednesday, President Nana Addo Dankwa Akufo-Addo who was represented by the Senior Minister, Yaw Osafo Maafo, pointed out that collectively and individually, boards are accountable to government.
“As boards and management, we should know that the global economic environment is changing at a fast rate, and as leaders we need to be circumspect and develop the ability of looking ahead and evaluating the consequences of those changes on our SOEs and plan ahead for them,”
He urged boards and management to resist the temptation of interfering with the day-day running of the businesses. “That is the job of the CEO and management team.”
The president also urged them to apply current trends in ICT resources by deploying them to inject efficiency into their operations.
Boards and management of SOEs should be circumspect and avoid undertaking projects without conducting sensibility analyses to determine commercial viability of the projects, as well as adhering to sound principles of obtaining value for money in the execution of projects, the president noted.
Government continues to pursue macroeconomic policies to maintain and sustain macroeconomic stability to provide a stable environment that facilitates the expansion of economic activity and promotes job creation, growth and development.
SOEs must take advantage of achievements in macro-economic stabilisation, growth and efficient public financial management. These socio-economic fundamentals act as a catalyst for economic transformation of SOEs to deliver much-needed services.
Government’s economic policy objective, among others, is to create the most business-friendly environment possible, grow the economy, create jobs and positively improve on the lives of Ghanaians.
Government is on track with its strategy to use proceeds accruing from the Energy Sector Levy to support structuring the energy sector SOEs, aimed at sustaining investments in the sector.
He also added that government is working to address the legacy debts in other SOEs that may be linked to the equity holdings to strengthen its financial position.
“Some of you have also made requests for recapitalisation or some stimulus package, and this is also under consideration.
“I should also hasten to add that these assistances will be provided based on financial audits, and those that are deemed to have the capacity to turn their companies around in a reasonable time-frame will be the ones to benefit. There will be instances when private sector participation will be encouraged in some SOEs”.
Executive chairman of the SEC, Stephen Asamoah-Boateng, stated that he is keen to ensure corporate governance and legal frameworks which set up the various SOEs are adhered to by the boards and management.
He also indicated that SEC will roll out an online monitoring system – explaining that what he came to meet was a reporting system that was manual, but with modern technology he will push through online monitoring.
“I don’t wait until the problem arises before I see it; if it is online, I can spot the expenditure; if you are going above your budget, I can see in front of my screens and call the MD and ask ‘how is this happening’, so we can engage them. We guide them so they don’t go back to the old ways of causing debt as we came to inherit,” he said in an interview.
The 2016 World Bank report on SOEs, bemoaned the situation of multiple state institutions with varying oversight responsibilities that have contributed significantly in the underperformance of the SOEs.
A bill to establish a State Investments and Governance Authority (SIGA) to oversee and administer equity investments of the state was prepared by the Ministry of Finance and submitted to Cabinet this year for consideration, and has been approved.
The bill is expected to centralise the framework for overseeing government interests and governance of SOEs, Joint Venture Companies (JVCs) and other state entities, including regulatory bodies.