Maria Hamutenya, Andrew Kathindi

Public Enterprise Minister, Leon Jooste, says State-owned Enterprises (SOEs) directors appointed to boards will now be made financially liable for any decision that they enter into on behalf of SOEs that are not in the best interest of the entity.

According to Jooste, the Public Enterprises Governance Act (PEGA) has a provision that makes directors appointed, personally liable for the financial implication of the decisions which they enter into on behalf of the said SOE.

The development comes as multitudes of Namibians have been applying to seat on SOE boards mainly induced by the benefits and allowance that come with it, with some making decisions that end up costing Government millions of dollars, such as the recent case of Air Namibia.

“I support that 100 percent. It is in line with the Companies Act and the PEGA,” he said.

This also comes amid concern of increased recycling of directors with some individuals now becoming common appointees to seat on SEO boards, amid concerns that some of them are coming from non-performing entities. “A person in a particular executive position may be performing exceptionally well but the PE may be struggling for reasons not related to the performance of that person,” Jooste said.

Defending his appointment of individuals that chair more than one board, Jooste said, “the Chairperson does not necessarily have a higher workload than the rest of the board and it is therefore no problem for someone to be Chairperson of more than one board.”

“We are doing our best to attract a new crop of board members but we are finding that many Namibian professionals are not making themselves available to serve and this compromises our ability to attract new people. I do, however, feel that we have succeeded to some extent and from new board appointments that will be announced soon, one will see several new names.”

Corporate Governance expert ,Joseph Ilonga, who has written extensively on Corporate Governance stated that government should implement the Namcode to all SOEs. Namcode is a code of conduct on corporate governance, drafted by the Namibian Stock Exchange and based on the King Report on Corporate Governance of South Africa and offers guidance to board directors.

“One of the reasons why Air Namibia failed was because of the board members. If you have a board at a financial institution, and you have it run by someone that does not have the expertise and qualifications to run it, the decision that that person will impose on the board will have huge consequences on that organisation in the long run,” said Ilonga.Ilonga further argues that from his observation, there are currently only a few SOEs that are adhering to Namcode, and there are those that are totally ignoring it.If this is not implemented as a matter of urgency, other SOEs, such as the Roads Contractor Company (RCC) could follow Air Namibia’s fate.

“RCC was supposed to be the main contractors of roads, but instead they are side lined, or given subcontractor positions.”

RCC was recently evicted from the premises it occupied in the Southern Industrial Area, owned by Namibia Post and Telecom Holdings Limited (NPTH).

When contacted for comment, former Air Namibia Board Chairperson, Escher Luanda, who is also the Chairperson of the Namibian Institute of Corporate Governance, refused to comment.

Currently Government is faced with a corporate governance debacle at the National Housing Enterprise (NHE) after its Chief Executive Officer (CEO), Gisbertus Mukulu, suspended senior managers who had questioned his competence to continue leading the company after his contract was renewed for five years.

The developments means the NHE is now operating without an IT manager, Finance Manager, Company Secretary and Communications Manager.