Non-Reforms of the Parastatal Kind

May 11, 2015

Dear Parastatal Politician Director:

Congratulations on the appointment! Your name transcended what must have been several iterations of the best and professional list of qualified candidates for the rigorous task of board director or chairperson. Let me remind you (or perhaps inform you for the first time) about the journey that preceded the gazetting of your name a few weeks ago.

On 23rd July 2013, President Uhuru Kenyatta appointed the Presidential Task Force on Parastatal Reforms (PTPR). The news was met with giddy excitement from right thinking Kenyans as it demonstrated the President’s commitment to actually instilling a new way of driving public sector performance through credible and qualified appointments on the oversight boards of directors. Even better was the composition of the Task Force: Eleven accomplished individuals from both the public and private sector whose experience and professional pedigree were unquestionable.

The team didn’t sleep, I tell you. By October 2013, The Report of The Presidential Task Force on Parastatal Reforms was ready. The team looked east, west, north and south across the global for best practice in government owned entities (GOE’s). And they summarized it into the report. You need to wrap your fingers around this 229-page report before you rock up bright eyed and bushy tailed at your new boardroom. Problem is, you’ve probably already rocked up. But it’s never to late to learn as the late Kimani Maruge, Kenya’s oldest Standard One pupil, would have told you. The report is easily available on the internet because I highly doubt that the Managing Director of your parastatal distributed it to you at your induction. Yes induction, a process that you were supposed to undergo, right?

But the PTPRs knew then that you probably wouldn’t undergo it. In fact, if you turn to page 56 of the 229 page document (and I congratulate you most profusely if you got this far) you will find the following quote: “The Committee identified a number of issues and challenges with the current framework for recruitment, selection, appointment and induction of boards of GOEs. These include:
• absence of a clear framework for recruitment, selection, appointment and induction of boards of GOEs;
• lack of uniformity in the application of appointment procedures, not least in respect of GOEs;
• inadequate induction processes for board members;
• lack of proper skills mix and bloated boards;
• shortcomings in the process of appointment of CEOs;
• lack of understanding of role of boards by board of directors;
• fusing of the Chief Executive and Board Secretary roles.”

Hey wait a minute, let’s take a step back. Did the PTPRs actually imagine that there has historically been a lack of proper skills mix in parastatal boards? I want to believe that following your appointment this has now been corrected, right?

This was their finding: “Achieving the right mix of talent, skills and experience on boards is critical for businesses. In addition, good corporate governance calls for a proper skills mix in the board for boards to effectively carry out their duties as the minds and wheel of GOEs. An organization that recruits from the widest pool of talent ensures a diversity of experience and perspective in the boardroom that broadens discussion. Diverse views promote debate and challenge group mentality; they are more likely to encourage consideration of alternatives, take into account more risks, and develop contingency plans. The lack of a proper framework for recruitment of boards has led to lack of the necessary mix of skills and talent in boards of GOEs.”

But listen. Things are not too bad. You were picked because you have a role to play on your board. Your political background, your experience as well as your very apparent skills will bring in critical perspectives that will broaden discussion. After all you were picked BY the President himself who had conclusively and exhaustively read the Taskforce’s report. If you read nothing else in that report, please I beg you, read that same page 56, a section titled “Lack of Understanding of the Role of Boards by Board Members.”

In case the Managing Director of your parastatal fails to send you for training, or in the event he does and you fail to attend the same, you need to understand this critical fact articulated in that section: “Directors of GOEs just like their counterparts in private companies are required to discharge their legal duties faithfully. These duties are grouped into two categories, namely duty of care, skill and diligence and fiduciary. One of the legal duties of a board of directors is to act in good faith. This connotes several requirements, including the duty to act honestly and in the best interests of the GOE, to not appropriate the company’s opportunities or receive secret profits and to endeavour to fulfil the purpose for which the GOE was established. They must act in the best interests of the GOE. It is this critical role of boards to act in good faith and act in the best interest of the GOE so as to drive forward its strategy that some board members tend not to fully understand and/or practice.”
Yes, the Taskforce is talking about the other guys on the board. Not you. You have happily taken on your role because you will always act in good faith. Right? In case you need a summary of why you were chosen out of 40 million Kenyans to be on the board, the report captures it beautifully: “In conducting this exercise, the PTPRs was exhorted by H.E. The President to always ask: (a) where does Wanjiku stand in this detailed framework? (b) Is the public sector working for her at all? (c) Is she getting value for her precious investment?” This the Taskforce kept uppermost in their mind.

You must remember that you are there for Wanjiku. In every single board deliberation you must keep this front and centre of your mind. Wanjiku is not your pocket. Wanjiku is not your bank account. Wanjiku is Kenya.

[email protected]
Twitter: @carolmusyoka

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