Minister of Public Enterprise Leon Jooste says his ministry is constrained in its quest to transform the public enterprises by the current State-Owned Enterprise (SOE) Governance Act.
Jooste made thie remark during the budget motivation delivered in the National Assembly on Friday on his behalf by his deputy, Engel Nawatiseb.
The minister says currently the Act only provides the ministry with an oversight mandate and is, therefore, not sufficient to deal with the transformation of the public enterprises landscape.
“There is a necessity to urgently amend the Act to also give legitimacy to the hybrid governance model, which was approved by Cabinet in July 2016,” he said.
Further, Jooste said the ministry is currently developing and enhancing good corporate governance guidelines and legal and regulatory frameworks. He said this would ensure that public enterprises comply with the statutory financial, legal and governance requirements.
He said the ministry is also in the process of establishing a performance management culture and appropriate performance incentive schemes.
Additionally, he said, the ministry will conduct strategic interventions, valuations, due diligence exercises, special investigations and provide further technical support and consultation, specifically to public enterprises that are earmarked for restructuring.
Jooste also highlighted the ministry’s achievements, including brining on board a professional team in the corporate advisory reform unit of the ministry, as well as the finalisation and approval of the hybrid governance model.
He said the ministry also successfully concluded valuable international studies and benchmarking exercises, which include the technical review of the Public Enterprises Governance Act in preparation of the amendment.
Further, he said, other achievements over the past year include the development of a framework for an ownership policy, which will provide guidance on the role of the State as a shareholder in commercial enterprises.
“We also established an in-house monitoring system, which now enables MPE to report collectively on the financial performance and levels of compliance of all public enterprises. This system will be enhanced during the new budget period,” he said.
He noted that the ministry also succeeded in establishing a proper board recruitment process, which included setting up a database for potential board members for public enterprises.
“The other achievement was the finalisation of performance-based (incentivised) remuneration guidelines and board fees for public enterprises,” he said.