Key reforms for Nam SOEs imminent

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Timo Shihepo

Windhoek - Namibia’s Ministry of Public enterprises is at an advanced stage to implement reforms that will give the powers to the minister to make sure that State Owned Enterprises’ (SOEs) board of directors will not be remunerated if they are not fulfilling their duties.

The reforms will also see Leon Jooste, the Public Enterprises Minister, having the power to remove board of directors when they are not performing. The reforms will also stretch to the executive management of SOEs, who will also be fired if they are not fulfilling their mandates.

Namibia’s SOEs have been failing miserably, with most of them relying on government bailouts every year.

Responding to The Southern Times questions on Thursday, Jooste said that the measures, which will be put in place before 21 March 2020, will enable the board of directors and the executive management to be held accountable.

Jooste said that they have strengthened some of the punitive provisions, which have been lacking in the existing laws.

“The new legislative will kick in soon for board of directors and those at the executive level. All of them will be required to sign key performance agreements.  It will kick in due to non-performance and mismanagement. I don’t like to have legislation with items like that.

“I don’t even want to use some of these provisions. If we appoint the right people as our board of directors, we shouldn’t be having to use some of these provisions. I will be sad to use some of these provisions but they are being introduced because of what has happened in the past,” he said.

To make that work, Jooste said this depends on one component of a performance management approach that they are introducing.

“It starts with a bankable business plans from the board of directors. We will only approve them when they are bankable. There will be performance agreements between individual board members and the minister based on the Key Performance Indicators (KPIs) of the business plan.  The board will also enter into a performance agreement with the CEO with the same KPIs and the CEO will casket that down as he/she chooses.

“There will be a performance management system within each of the SOEs. We will introduce our own performance management system as a shareholder. We will monitor performance, how well they are implementing that particular business plan. The last part of that component will be an incentivised remuneration approach,” he said.

Jooste said the current system where there is blanket salaries and fees being paid regardless of the quality of performance will no longer be entertained.

“If all these components work together, it will create a performance culture, within our public enterprises and in a positive way. We want to inspire people to perform and not threaten people by punitive measures to perform. It’s not just punishing poor performance but we are looking at accountability. We will be measuring the quality of performance,” he said. 

 

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