Chance to review board appointment process

Kuthula Matshazi The Flip Side
Strong boards set the tone for effective SOEs and are critical for supervising their administrative and operational functions. While the minister is a political figurehead who holds political accountability, the board is an administrative body that oversees the operations of the SOEs, ensuring that these entities have resources to achieve their business objectives. If there are major problems in an SOE, the board should be the first to know and take immediate remedial action.
Zimbabwe’s laws compare favourably with other jurisdictions such as South Africa and Canada. However, there is room for improvement as the Speaker of the House of Assembly, Jacob Mudenda recently observed. Mudenda said that the appointments to SOEs boards are not transparent since the positions are not advertised, thus allowing ministers to look around for people they know.

Mudenda has a point. Even with the best intentions, a national appointment system largely based on the minister’s initiative is likely to face challenges, especially in a society with a developed polycentric governance system. Current challenges include the appointments of, more or less, the same group of people on several other SEOs boards.

SOEs serve different constituents and therefore the appointments legislation needs to reflect that diversity in the appointments process. The selection of effective SOEs boards can be improved if the current laws provide for establishing representative-based boards to balance the skills criteria. Government should consider amending the law to require nominations to SOEs boards to be advertised in all major media outlets in Zimbabwe. This will enlarge the pool of potential candidates beyond the group of people known to the minister.

In addition, government needs to include, in the legislation governing appointments of boards, an express clause that shall require a broad-based consultation process with stakeholders in coming up with names of possible appointees. The stakeholders of an SOE should be given an opportunity to provide input into board selection.

Broad-based consultations take a great deal of time and effort, but are necessary to ensure representativeness and appointment of people with appropriate competencies from a broader catchment area.

The current legislation is predominantly silent on broad-based consultation of stakeholders, but prominent on the skills and experience requirement. Most statutes emphasise that appointments be based on ability and experience in administration or professional qualifications.

In a majority of statutes researched, the minister consults with and takes direction from the president. That is standard practice in many jurisdictions. The president’s powers to appoint and provide input into the appointing process should not be diminished. However, the president also needs to be provided a larger pool from which to choose appointees.

The pool should not be predominantly skills-based, but have an equally strong representative element. Specific skills required for the various boards are not a preserve of independent professionals or career board members, but can also be obtained from stakeholder representatives. For instance, a volunteer chairperson of a cultural arts association who happens to be a lawyer can go on to be proposed for appointment to an SOE board. Such person ultimately provides representation and a professional skill on the board. Of course, there is a valid reason why the skills-based model is preferred. As noted by Julie Garland-McLellan, an expert on board governance, skills-based boards provide members who have the skills and knowledge to address strategic priorities such as planning, finances, etc. This approach provides a board that is capable of adding value through close supervision and leadership of the management team. Sadly, the revelation of corruption shows the limitations of this model.

Limitations such as this one provide a strong case for broadening to stakeholders the selection criteria of board members. From a polycentric governance approach, government should not only be represented by professional civil servants on SOEs boards, but representatives of citizens’ groups, as well. Even with the best intentions, what might be right for a skills-based board may not be so for the broader public interest. A case in point is where SOEs professional boards offered each other shocking remuneration packages. The scenario would likely have been different had there been a strong stakeholder representation.

Legislation needs to balance skills and stakeholder representation to ensure that a right mix is achieved for efficiency, effectiveness and transparency. Legislation should not assume that professionals will conduct themselves in the best interests of all stakeholders. It should prescribe that representation be a necessary requirement in appointing boards to promote transparency, and stakeholder and national interests.