PRESENTATION TO THE CORPORATE GOVERNANCE SUMMIT: CORPORATE GOVERNANCE IN PARASTATALS AND STATE ENTERPRISES MINISTRY OF STATE ENTERPRISES AND PARASTATALS

STATE ENTERPRISES AND PARASTATALS ANY STATUTORY BODY ESTABLISHED BY AN ACT OF PARLIAMENT ANY CORPORATE BODY OR COMPANY IN WHICH THE STATE HAS A CNTROLLING INTEREST

ANY STATUTORY BODY ESTABLISHED BY AN ACT OF PARLIAMENT

ANY CORPORATE BODY OR COMPANY IN WHICH THE STATE HAS A CNTROLLING INTEREST

CORPORATE GOVERNANCE A HIGH LEVEL FRAMEWORK WITHIN WHICH ORGANISATIONS INCLUDING STATE ENTERPRISES AND PARASTATALS ARE: DIRECTED CONTROLLED, AND HELD TO ACCOUNT

A HIGH LEVEL FRAMEWORK WITHIN WHICH ORGANISATIONS INCLUDING STATE ENTERPRISES AND PARASTATALS ARE:

DIRECTED

CONTROLLED, AND

HELD TO ACCOUNT

WHO ARE THE STAKEHOLDERS? PARLIAMENT LINE MINISTERS BAORD CHAIRPERSONS BOARDS BOARD COMMITTEES C E O MANAGEMENT EMPLOYEES SPEAKER OF PARLIAMENT MINISTER OF FINANCE MINISTER OF STATE ENTERPRISES AND PARASTATALS CONTROLLER AND AUDITOR GENERAL CUSTOMERS SUPPLIERS PUBLIC

PARLIAMENT

LINE MINISTERS

BAORD CHAIRPERSONS

BOARDS

BOARD COMMITTEES

C E O

MANAGEMENT

EMPLOYEES

SPEAKER OF PARLIAMENT

MINISTER OF FINANCE

MINISTER OF STATE ENTERPRISES AND PARASTATALS

CONTROLLER AND AUDITOR GENERAL

CUSTOMERS

SUPPLIERS

PUBLIC

CORPORATE GOVERNANCE STANDARDIZED PRINCIPLES OR RULES ACCOUNTABILITY, RESPONCIBILITY,TRANSPARENCY, FAIRNESS , ect DOCUMENTED PROCESSES AND PROCDURES PROCUREMENT PROCESSES AND PROCEDURES RESTRUCTURING PROCESSES AND PROCEDURES FOR SEPS FINANCIAL MANAGEMENT PROCESSES AND PROCEDURES HUMAN RESOUCES MANAGEMENT PROCESSES AND PROCEDURES RISK MANAGEMENT PROCESSES AND PROCEDURES PRODUCTION PROCESSES AND PROCEDURES X PROCESS AND PROCEDURES

STANDARDIZED PRINCIPLES OR RULES

ACCOUNTABILITY, RESPONCIBILITY,TRANSPARENCY, FAIRNESS , ect

DOCUMENTED PROCESSES AND PROCDURES

PROCUREMENT PROCESSES AND PROCEDURES

RESTRUCTURING PROCESSES AND PROCEDURES FOR SEPS

FINANCIAL MANAGEMENT PROCESSES AND PROCEDURES

HUMAN RESOUCES MANAGEMENT PROCESSES AND PROCEDURES

RISK MANAGEMENT PROCESSES AND PROCEDURES

PRODUCTION PROCESSES AND PROCEDURES

X PROCESS AND PROCEDURES

CORPORATE GOVERNANCE SEEKS TO ENSURE MAXIMUM DELIVERY OF RESULTS OR OUTCOMES AND IMPACT ENSURE EFFICIENT AND EFFECTIVE USE OF RESOURCES ENSURE REPEATEBILITY OF PROCESSES AND PROCEDURES TO GUARANTTE QUALITY OUTCOMES ENSURE PERIODIC MONITORING FOR COMPLIANCE AND IMPROVEMENT MINIMISE RISKS ASSOCIATED WITH THE PROCESSES

ENSURE MAXIMUM DELIVERY OF RESULTS OR OUTCOMES AND IMPACT

ENSURE EFFICIENT AND EFFECTIVE USE OF RESOURCES

ENSURE REPEATEBILITY OF PROCESSES AND PROCEDURES TO GUARANTTE QUALITY OUTCOMES

ENSURE PERIODIC MONITORING FOR COMPLIANCE AND IMPROVEMENT

MINIMISE RISKS ASSOCIATED WITH THE PROCESSES

THE ACTS ESTABLISHMENT ACTS AUDIT AND EXCHAQUER ACT PROCUREMENT ACT COMPANIES ACT LABOUR ACT OTHER ACTS RELEVANT AND SPECIFIC TO EACH SEP

ESTABLISHMENT ACTS

AUDIT AND EXCHAQUER ACT

PROCUREMENT ACT

COMPANIES ACT

LABOUR ACT

OTHER ACTS RELEVANT AND SPECIFIC TO EACH SEP

WHAT IS PROVIDED FOR IN THE ESTABLISHMENT ACT? SELECTION AND APPOINTMENT OF BOARDS. SIZE AND COMPOSITION OF BOARDS. THE MANDATE OF THE BOARDS. THE ROLES FUNCTIONS AND ACCOUNTABILITY OF THE BOARDS.

SELECTION AND APPOINTMENT OF BOARDS.

SIZE AND COMPOSITION OF BOARDS.

THE MANDATE OF THE BOARDS.

THE ROLES FUNCTIONS AND ACCOUNTABILITY OF THE BOARDS.

WHAT IS PROVIDED FOR IN THE AUDIT AND EXCHEQUER ACT? REPORTING OF AUDITED FINANCIAL STATEMENTS REPORTING OF SPECIAL REPORTS APPOINTMENT OF INTERNAL AND EXTERNAL AUDITORS APROVAL OF CAPITAL BUDGETS APROVAL OF REVENUE AND EXPENDITURE BUDGETS APROVAL OF SALARIES FOR DESGINATED POSTS PRESANTATIONS OF CAPITAL BUDGET TO PARLIAMENT APPROVALS ON BORROWINGS APPROVALS ON INVESTMENT MODALITIES LIMITS ON LOANS

REPORTING OF AUDITED FINANCIAL STATEMENTS

REPORTING OF SPECIAL REPORTS

APPOINTMENT OF INTERNAL AND EXTERNAL AUDITORS

APROVAL OF CAPITAL BUDGETS

APROVAL OF REVENUE AND EXPENDITURE BUDGETS

APROVAL OF SALARIES FOR DESGINATED POSTS

PRESANTATIONS OF CAPITAL BUDGET TO PARLIAMENT

APPROVALS ON BORROWINGS

APPROVALS ON INVESTMENT MODALITIES

LIMITS ON LOANS

SELECTION AND APPOINTEMENT OF BOARD MEMBERS APPOINTED BY THE PRESIDENT. MINISTER REQUESTS FOR NOMINATIONS FROM STAKEHOLDERS. MINISTER FORWARD TO THE PRESIDENT, STAKEHOLDER NOMINATION AND HIS RECOMMENDATIONS. APPOINTED BY LINE MINISTER WITH THE CONCURRENCE OF THE PRESIDENT LINE MINISTRIES TO CONSULT WITH MINISTRY OF STATE ENTERPRISES AND PARASTATALS.

APPOINTED BY THE PRESIDENT.

MINISTER REQUESTS FOR NOMINATIONS FROM STAKEHOLDERS.

MINISTER FORWARD TO THE PRESIDENT, STAKEHOLDER NOMINATION AND HIS RECOMMENDATIONS.

APPOINTED BY LINE MINISTER WITH THE CONCURRENCE OF THE PRESIDENT

LINE MINISTRIES TO CONSULT WITH MINISTRY OF STATE ENTERPRISES AND PARASTATALS.

APPOINTMENT OF BOARD POLICY THE APPOINTMENT OF BOARD MEMBERS SHOULD BE CONSISTENT WITH THE FOLLOWING: CONTINUITY; REGIONAL REPRESENTATION; GENDER BALANCE; SKILLS DIVERSITY; AND POLITICAL NEUTRALITY. MINIMISE MULTIPLICITY OF BOARD MEMBERSHIP

THE APPOINTMENT OF BOARD MEMBERS SHOULD BE CONSISTENT WITH THE FOLLOWING:

CONTINUITY;

REGIONAL REPRESENTATION;

GENDER BALANCE;

SKILLS DIVERSITY; AND

POLITICAL NEUTRALITY.

MINIMISE MULTIPLICITY OF BOARD MEMBERSHIP

FUNCTIONS OF THE BOARD TO DIRECT MOBILIZATION OF PHYSICAL, HUMAN AND FINANCIAL RESOURCES. TO DIRECT AND CONTROL USAGE OF PHYSICAL, HUMAN AND FINANCIAL RESOURCES IN LINE WITH THE MANDATE. TO DEVELOP, MONITOR AND EVALUATE EFFECTIVENESS OF STRATEGIES AND POLICES TO ACHIEVE OBJECTIVES OF THE MANDATE. TO REPORT ON PERFORMANCE OUTCOMES.

TO DIRECT MOBILIZATION OF PHYSICAL, HUMAN AND FINANCIAL RESOURCES.

TO DIRECT AND CONTROL USAGE OF PHYSICAL, HUMAN AND FINANCIAL RESOURCES IN LINE WITH THE MANDATE.

TO DEVELOP, MONITOR AND EVALUATE EFFECTIVENESS OF STRATEGIES AND POLICES TO ACHIEVE OBJECTIVES OF THE MANDATE.

TO REPORT ON PERFORMANCE OUTCOMES.

ROLE OF THE BOARD THE ROLE OF THE BOARD IS TO ENSURE COMPLIANCE WITH CORPORATE GOVERNANCE AND EFFECTIVE PERFORMANCE AND RISK MANAGEMENT SYSTEMS, AND ALSO TO OBSERVE TRANSPARENCY, ACCOUNTABILITY AND RESPONSIBILITY , WHILST BEING : RESPONSIBLE FOR FORMULATING BROAD POLICIES OF THE ORGANIZATION. RESPONSIBLE FOR MONITORING AND REVIEWING STRATEGIES AND MAJOR PLANS. SHOULD PROVIDE LEADERSHIP AND SUPERVISE MANAGEMENT. DEVELOP CORPORATE CULTURE AND CLIMATE. MUST ENSURE THAT FULL AND PROPER RECORDS OF THE FINANCIAL AFFAIRS ARE KEPT. RESPONSIBLE FOR PRODUCTION OF THE ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS THAT FAIRLY REPRESENTS THE STATE OF AFFAIRS OF THE ORGANIZATION.

THE ROLE OF THE BOARD IS TO ENSURE COMPLIANCE WITH CORPORATE GOVERNANCE AND EFFECTIVE PERFORMANCE AND RISK MANAGEMENT SYSTEMS, AND ALSO TO OBSERVE TRANSPARENCY, ACCOUNTABILITY AND RESPONSIBILITY , WHILST BEING :

RESPONSIBLE FOR FORMULATING BROAD POLICIES OF THE ORGANIZATION.

RESPONSIBLE FOR MONITORING AND REVIEWING STRATEGIES AND MAJOR PLANS.

SHOULD PROVIDE LEADERSHIP AND SUPERVISE MANAGEMENT.

DEVELOP CORPORATE CULTURE AND CLIMATE.

MUST ENSURE THAT FULL AND PROPER RECORDS OF THE FINANCIAL AFFAIRS ARE KEPT.

RESPONSIBLE FOR PRODUCTION OF THE ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS THAT FAIRLY REPRESENTS THE STATE OF AFFAIRS OF THE ORGANIZATION.

ROLE OF THE BOARD RESPONSIBLE FOR APPROVALS OF ANNUAL BUDGETS. RESPONSIBLE FOR RISK MANAGEMENT POLICY. ENSURE EFFECTIVE INDUCTION AND TRAINING PROGRAMS FOR BOARD MEMBERS. ENSURE UNRESTRICTED ACCESS TO RELEVANT AND TIMELY INFORMATION BY BOARD MEMBERS

RESPONSIBLE FOR APPROVALS OF ANNUAL BUDGETS.

RESPONSIBLE FOR RISK MANAGEMENT POLICY.

ENSURE EFFECTIVE INDUCTION AND TRAINING PROGRAMS FOR BOARD MEMBERS.

ENSURE UNRESTRICTED ACCESS TO RELEVANT AND TIMELY INFORMATION BY BOARD MEMBERS

ROLE OF THE BOARD RESPONSIBLE FOR ADEQUATE INTERNAL CHECKS AND CONTROLS. RESPONSIBLE FOR APPOINTMENT AND REMUNERATION OF CEO AND TOP MANAGEMENT. RESPONSIBLE FOR PERFORMANCE MANAGEMENT POLICY. ENSURE COMPLIANCE WITH LAWS, REGULATIONS AND GOVERNMENT POLICIES.

RESPONSIBLE FOR ADEQUATE INTERNAL CHECKS AND CONTROLS.

RESPONSIBLE FOR APPOINTMENT AND REMUNERATION OF CEO AND TOP MANAGEMENT.

RESPONSIBLE FOR PERFORMANCE MANAGEMENT POLICY.

ENSURE COMPLIANCE WITH LAWS, REGULATIONS AND GOVERNMENT POLICIES.

BOARD PERFOMANCE EVALUATION MONITOR AND EVALUATE THE PERFORMANCE OF THE BOARD CHAIRPERSON. MONITOR AND EVALUATE PERFORMANCE OF INDIVIDUAL BOARD MEMBERS. MONITOR AND EVALUATE PERFORMANCE OF THE ENTIRE BOARD. PERFORMANCE EVALUATION REPORTS TO BE SUBMITTED TO THE LINE MINISTER AT LEAST ONCE A YEAR. BOARD TO AGREE WITH SHAREHOLDER ON PERFORMANCE TARGETS AND INDICATORS .

MONITOR AND EVALUATE THE PERFORMANCE OF THE BOARD CHAIRPERSON.

MONITOR AND EVALUATE PERFORMANCE OF INDIVIDUAL BOARD MEMBERS.

MONITOR AND EVALUATE PERFORMANCE OF THE ENTIRE BOARD.

PERFORMANCE EVALUATION REPORTS TO BE SUBMITTED TO THE LINE MINISTER AT LEAST ONCE A YEAR.

BOARD TO AGREE WITH SHAREHOLDER ON PERFORMANCE TARGETS AND INDICATORS .

REPORTING STRUCTURE CORPORATE GOVERNANCE SEEKS TO DEFINE ROLE CLARITY AND RELATIONSHIPS BETWEEN VARIOUS KEY STAKEHOLDERS: - BETWEEN THE BOARD AND THE LINE MINISTRY; - BETWEEN THE CEO AND BOARD MEMBERS AND THE BOARD CHAIRPERSON; - BETWEEN THE CEO AND THE LINE MINISTRY’S SECRETARY AND MINISTER; AND - BETWEEN THE CEO AND OTHER GOVERNMENT MINISTRIES.

CORPORATE GOVERNANCE SEEKS TO DEFINE ROLE CLARITY AND RELATIONSHIPS BETWEEN VARIOUS KEY STAKEHOLDERS:

- BETWEEN THE BOARD AND THE LINE MINISTRY;

- BETWEEN THE CEO AND BOARD MEMBERS AND THE BOARD CHAIRPERSON;

- BETWEEN THE CEO AND THE LINE MINISTRY’S SECRETARY AND MINISTER; AND

- BETWEEN THE CEO AND OTHER GOVERNMENT MINISTRIES.

THE ROLE OF THE LINE MINISTRY MINISTER MAY GIVE BOARD DIRECTION ON MATTERS OF POLICY. MINISTER TO APPROVE BUDGETS. MINISTER TO REPORT TO CABINET PARLIAMENT. MINISTER TO CONSULT BOARD BEFORE ISSUING DIRECTIVES. DIRECTIONS RECEIVED TO APPEAR IN ANNUAL REPORTS. MONITOR AND EVALUATE PERFORMANCE.

MINISTER MAY GIVE BOARD DIRECTION ON MATTERS OF POLICY.

MINISTER TO APPROVE BUDGETS.

MINISTER TO REPORT TO CABINET PARLIAMENT.

MINISTER TO CONSULT BOARD BEFORE ISSUING DIRECTIVES.

DIRECTIONS RECEIVED TO APPEAR IN ANNUAL REPORTS.

MONITOR AND EVALUATE PERFORMANCE.

ROLE OF THE MINISTRY OF STATE ENTERPRISES AND PARASTATALS FORMULATION AND REVIEW OF POLICIES RELATING TO CORPORATE GOVERNANCE AND PERFORMANCE OF SEPS ENSURE COMPLIANCE AND CONTINUOUS IMPROVEMENT DEVELOP AND HELP IMPLEMENT REFORM STRATEGIES THAT OPTIMIZE POSITIVE IMPACT OF THE STATE ENTERPRISES AND PARASTATALS . ENSURE THAT ALL STATE ENTERPRISES AND PARASTATALS OPERATE AND COMPLY WITH GOOD COOPERATE GOVERNANCE AND REGULATORY ENVIRONMENT.

FORMULATION AND REVIEW OF POLICIES RELATING TO CORPORATE GOVERNANCE AND PERFORMANCE OF SEPS

ENSURE COMPLIANCE AND CONTINUOUS IMPROVEMENT

DEVELOP AND HELP IMPLEMENT REFORM STRATEGIES THAT OPTIMIZE POSITIVE IMPACT OF THE STATE ENTERPRISES AND PARASTATALS .

ENSURE THAT ALL STATE ENTERPRISES AND PARASTATALS OPERATE AND COMPLY WITH GOOD COOPERATE GOVERNANCE AND REGULATORY ENVIRONMENT.

DECLARATION OF INTEREST A BOARD MEMBER IS BOUND TO DISCLOSE ALL INFORMATION WHICH HAVE MATERIAL EFFECT TO THE ORGANIZATION'S OPERATIONS, FINANCIAL STATUS OR IMAGE. A RECORD OF DECLARATION OF INTEREST AT ALL BOARD MEETINGS IS A USEFUL TOOL TO ENSURE COMPLIANCE TO DECLARATION OF INTEREST.

A BOARD MEMBER IS BOUND TO DISCLOSE ALL INFORMATION WHICH HAVE MATERIAL EFFECT TO THE ORGANIZATION'S OPERATIONS, FINANCIAL STATUS OR IMAGE.

A RECORD OF DECLARATION OF INTEREST AT ALL BOARD MEETINGS IS A USEFUL TOOL TO ENSURE COMPLIANCE TO DECLARATION OF INTEREST.

REMUNERATION FOR BOARD MEMBERS APPOINTMENTS TO BOARDS SHOULD NOT BE TAKEN AS SUBSTANTIVE EMPLOYMENT. BOARD FEES ARE FIXED BY THE LINE MINISTER WITH THE APPROVAL OF THE MINISTER OF FINANCE. BOARD FEES TO BE BASED ON THE PRINCIPLES OF ABILITY TO PAY , SUSTAINABILITY , REASONABLENESS AND COMPARABILITY. BOARD REMUNERATION AND BENEFITS SHOULD NOT BE COMPARED TO THOSE APPLICABLE TO THE CEO.

APPOINTMENTS TO BOARDS SHOULD NOT BE TAKEN AS SUBSTANTIVE EMPLOYMENT.

BOARD FEES ARE FIXED BY THE LINE MINISTER WITH THE APPROVAL OF THE MINISTER OF FINANCE.

BOARD FEES TO BE BASED ON THE PRINCIPLES OF ABILITY TO PAY , SUSTAINABILITY , REASONABLENESS AND COMPARABILITY.

BOARD REMUNERATION AND BENEFITS SHOULD NOT BE COMPARED TO THOSE APPLICABLE TO THE CEO.

CONTERMPORARY CORPORATE GOVERNANCE CHALLENGES MULTIPLICITY OF STAKEHOLDERS WITH CONFLICTING INTERESTS; LACK OF TRANSPARENCY; LIMITED ACCOUNTABILITY; INDISCIPLINE; AND CORRUPT TENDENCIES. LACK OF EFFECTIVE COMPLIANCE MONITORING INADEQUACY IN PERFORMANCE CONTRACTS

MULTIPLICITY OF STAKEHOLDERS WITH CONFLICTING INTERESTS;

LACK OF TRANSPARENCY;

LIMITED ACCOUNTABILITY;

INDISCIPLINE; AND

CORRUPT TENDENCIES.

LACK OF EFFECTIVE COMPLIANCE MONITORING

INADEQUACY IN PERFORMANCE CONTRACTS

WAY FORWARD IN ORDER TO ENSURE THE ADOPTION AND STRENGTHENING OF EFFECTIVE CORPORATE GOVERNANCE PRINCIPLES BY STATE ENTERPRISES AND PARASTATALS, THE MINISTRY OF STATE ENTERPRISES AND PARASTATALS IS IN THE PROCESS OF DRAFTING A CORPORATE GOVERNANCE FRAMEWORK. THE CORPORATE GOVERNANCE FRAMEWORK WILL ADDRESS THE FOLLOWING ISSUES AMONG OTHERS: APPOINTMENTS OF BOARD MEMBERS BASED ON A TRANSPARENT CRITERIA AND MERIT. INVITATION TO INTERESTED PERSONS FOR INCLUSION IN A DATA BASE OF POTENTIAL BOARD APPOINTEES ROLE CLARITY AND REPORTING LINES ,RESPONSIBILITY AND ACCOUNTABILITY FOR KEY STAKE -HOLDERS, INSTITUTIONS AND INDIVIDUALS ENSURE THAT GOVERNMENT ACHIEVES ITS VISION FOR ROBUST AND EFFECTIVE SEP BOARDS WHICH FULLY EXERCISE THEIR RESPONSIBILITIES;

IN ORDER TO ENSURE THE ADOPTION AND STRENGTHENING OF EFFECTIVE CORPORATE GOVERNANCE PRINCIPLES BY STATE ENTERPRISES AND PARASTATALS, THE MINISTRY OF STATE ENTERPRISES AND PARASTATALS IS IN THE PROCESS OF DRAFTING A CORPORATE GOVERNANCE FRAMEWORK.

THE CORPORATE GOVERNANCE FRAMEWORK WILL ADDRESS THE FOLLOWING ISSUES AMONG OTHERS:

APPOINTMENTS OF BOARD MEMBERS BASED ON A TRANSPARENT CRITERIA AND MERIT.

INVITATION TO INTERESTED PERSONS FOR INCLUSION IN A DATA BASE OF POTENTIAL BOARD APPOINTEES

ROLE CLARITY AND REPORTING LINES ,RESPONSIBILITY AND ACCOUNTABILITY FOR KEY STAKE -HOLDERS, INSTITUTIONS AND INDIVIDUALS

ENSURE THAT GOVERNMENT ACHIEVES ITS VISION FOR ROBUST AND EFFECTIVE SEP BOARDS WHICH FULLY EXERCISE THEIR RESPONSIBILITIES;

WAY FORWARD STREAMLINE BOARD APPOINTMENTS TO SAFEGUARD POSSIBLE CONFLICT OF INTEREST FOR BOARD MEMBERS; PROFESSIONAL DETERMINATION OF BOARD MEMBERS’ CONDITIONS OF SERVICES; AND BOARDS TO HAVE PERFORMANCE AGREEMENTS WITH SHAREHOLDER AND WITH SENIOR MANAGEMENT

STREAMLINE BOARD APPOINTMENTS TO SAFEGUARD POSSIBLE CONFLICT OF INTEREST FOR BOARD MEMBERS;

PROFESSIONAL DETERMINATION OF BOARD MEMBERS’ CONDITIONS OF SERVICES; AND

BOARDS TO HAVE PERFORMANCE AGREEMENTS WITH SHAREHOLDER AND WITH SENIOR MANAGEMENT

WAY FORWARD THE FRAMEWORK WOULD REFLECT THE GOVERNMENT’S COMMITMENT TO MONITOR THE EFFECTIVENESS OF POLICY AND DECISION MAKING BOTH AT THE BOARD AND MANAGEMENT LEVELS WITH A VIEW TO ENHANCE SHAREHOLDER VALUE IN THE LONG TERM;

THE FRAMEWORK WOULD REFLECT THE GOVERNMENT’S COMMITMENT TO MONITOR THE EFFECTIVENESS OF POLICY AND DECISION MAKING BOTH AT THE BOARD AND MANAGEMENT LEVELS WITH A VIEW TO ENHANCE SHAREHOLDER VALUE IN THE LONG TERM;