Windhoek-The Minister of Public Enterprises, Leon Jooste says there is a need for a skills balance between board of directors, chief executive officers (CEOs) and executive committees (Exco) to create exceptional, quality entities.
Speaking at the launch of the Public Enterprises’ Directors Forum (PEDF) on Monday this week, he stressed the need for skills balances.
His ministry had identified the skills imbalances between boards, CEOs and Excos as a threat that contributed to the failure of public enterprises.
He noted there were no examples in the private sector or state-owned enterprises (SOEs) where an entity had excelled under the leadership of a weak board.
“Even if an entity has an exceptional CEO and Exco, it will fail if the quality of the board is not on par,” he said.
Therefore, it was extremely important to ensure adequate technical skills at board level to match those of the CEO, especially in cases of technically more complicated public enterprises.
“Failure to do this will result in a board being completely exposed to the proposals for projects and strategies coming from the CEO without the required skill to evaluate such proposals and to then conclude informed, calculated resolutions,” Jooste further explained.
He observed that this anomaly had been a root cause of instances where boards might then terminate projects or delay the implementation of such projects.
It also meant that boards approved projects blindly without analysing the associated risks, simply because they did not have the ability to do so, he noted.
He reiterated that the public enterprises ministry would continuously strive to improve and appoint the best possible boards while remaining committed to the further training of board members to enhance their effectiveness.
He told the gathering public enterprises would therefore introduce an entirely different approach to recruit, select and appoint board members. They had already started to build a database of potential board members for public enterprises.
This database, he added contained more than 500 names from all professions and practices.
His ministry would advertise in the media in cases where it was not convinced the databases contained people with the required skills.
Jooste said the PEDF together with the CEO Forum, would create an elegant conduit for consultations between the shareholder and the public enterprises.
It would provide the most efficient consultation strategy as it would be unrealistic from a cost and time perspective to arrange a consultation session with all CEOs and boards every time they found a need to consult on a particular matter.
“We have a strong desire to consult on all important governance matters before making any proposals or commitments to Cabinet with far reaching consequences,” he said.