Boards and good governance

Recently, Prime Minister Gaston Browne announced that his government had implemented a number of cost cutting measures to keep the country’s economy afloat.

Among the cuts identified were the stipends paid to heads of statutory boards, reducing the remuneration packages for ambassadors and diplomats who represent the country abroad and reducing government rentals by at least 15 per cent.

The nation should put politics aside and “give Jack his jacket”. That was a bold move on the prime minister’s part and he should be supported for looking beyond the legacy of political treats for supporters that normally come with the winning of an election.

After any election, boards are viewed as rewards for political cronies and supporters. It is generally used as a way of thanking diehards without having to dig into party coffers.

It is not unusual for certain supporters of the winning side to present a list of board seats which they demand as payback for all that they have ‘sacrificed’ on the campaign trail and during the years out of power.

For too long, many of the boards run by the government have been stuffed with unqualified persons who do not provide any positive contribution. They are there for the perks – the well catered meetings, the in-kind benefits, and let’s not forget the monthly stipend. The ultimate perk, of course, is to sit on multiple boards.

From the politics side of things, it is difficult to say “no”. Politicians feel that they must reward the faithful and, depending on your ranking, you get to sit on a board, or two, or more. In return, the politicians get a loyal insider providing information and influencing decisions in accordance with an agreed plan.

So, we were particularly happy when the prime minister said that “All board fees so far have been cut. And, I emphasise, at least 50 per cent.” This may put him at odds with some who were lining up for some sweet rewards but it is a good decision.

Although limited in its effect, it will make the board seats a bit less desirable. As well, it should help weed out who is there only for the perks as opposed to who is truly interested. It will not solve the problem of having square pegs in round holes but it is a good start.

We realise that there is a potential downside to this strategy. There is the chance that the government may not be able to attract qualified persons to sit on boards if the remuneration is not in keeping with the value of that person’s expertise but at the same time, people must begin to change their perception of what serving on a board is all about.

In the case of the government/statutory boards, we, as a community, must begin to look at them as an opportunity to give back. Take reward in the fact that you are helping the country to be the best that it can be rather than helping yourself to the best that the country can give you personally.

We must release the selfishness that characterises much of our way of life and that has basically killed volunteerism in this county. Where we feel that we can help improve society (though a board) we should raise our hand and offer to help. The remuneration may not ‘feather one’s nest’ but if the boards are run properly then it will ultimately benefit everyone, including the board members.

And while we applaud the good start, we must also say that we are concerned when Prime Minister Browne also added that some boards will not be re-constituted. This is troubling to us.

That is not to say that we are not very willing to hear and consider the reasoning behind any decision to do away with any specific board, but in general, we prefer that boards remain in place. This is especially true when the statutory bodies are large complex entities such as APUA, Medical Benefits, Social Security, etc.

Ministers of government should be attending to the people’s business. Scrapping boards and getting involved in the running of business does not seem like a good plan, nor does it seem very practical.

Let us put this in the context of any big business. The shareholders (ie the Government/People of Antigua) vote for a competent board to direct the business and the management team. Rarely do shareholders get involved in any aspect of running the business beyond the relationship with the board.

It is the concept of competence that is key in this arrangement. The shareholders must feel confident in the board’s abilities and the board must feel that they have the authority to deliver on behalf of the shareholders. Throughout all of the layers, the common thread is the vision and agreed budgets.

The board acts as the liaison and always holds their biggest protest card in their front pocket: resignation. If a board or board member feels that they are being bullied or manipulated then they can publicly resign in order to draw attention to any attempt at overreaching.

So, while we praise the PM’s attempt at more prudent fiscal management, it would be wise for all to reflect on the words of Sir Adrian Cadbury who was the Chair of the Corporate Governance Committee which was set up in 1991 by the Financial Reporting Council, the Stock Exchange and the accountancy profession. Its aim was to investigate the British corporate governance system and was in response to continuing concern about standards of financial reporting and accountability.

Sir Adrian said: “Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society.”

Well said, Sir. Well said.

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