Public Institutions: Changing Engineering Governance

Public Institutions: Changing Engineering Governance

The State Bank of Mauritius and Air Mauritius (left), from what remains of the company, are two examples of a clearly long list where governance is systematically marked.

The governance of public institutions has always been a source of criticism, fueled by the presence of political candidates. If the government has the option of appointing a relative to lead a public institution – the flagship of the country, then it must also be the guarantor of good governance and avoid the politicization of its management.

Along with the main figures operating at the time, Pritam’s report on the sale of shares of former BAI in its Kenya subsidiary has brought the issue of prudent management of public companies to the fore once again. State Bank of Mauritius, State Trade Corporation, Mauritius Investment Corporation or even Air Mauritius, among the remainder of the company, the list is clearly long as the governance is defined systematically. And they are called into question, with often disastrous consequences for these state institutions.

Of course, you don’t necessarily have to be an expert in good judgment to determine causes. However, from year to year, from system to system, the reason for the catastrophic management of these institutions remains the same: because it is nothing more or less than political interference that infiltrates the organizational structure of these companies through political candidates in general for positions of responsibility. Admittedly, this reality is not new, as you will say, because this practice is widespread in all countries. Of course, but we must remember that there were candidates and candidates and that today we must arm ourselves with a torch to enlighten institutions in which there is no CEO who has no political affinity.

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Meg Pillay, who pushed the exit door of Air Mauritius in 2016, a victim of egregious political interference in which basic principles of good governance were mocked, makes the idea of ​​a political candidate relatively easy. He finds it very natural in a democracy for the executive to choose to place at the head of the public institutions those which it considers most appropriate to realize the vision of the state. Since government is the product of the political majority, it becomes the central institution of democracy. Therefore, it is his right and his duty to do so in any company in which the state controls the capital. From there, it is in his interest to be wise in his choice and to ensure that good judgment is exercised.” He says that this is how the state shareholder allows the public company to operate efficiently, transparently and in compliance with competition rules. Since these companies are generally part of strategic sectors with a systematic spread in the national economy, their performance will directly reflect the performance of strength.

Non-political professionals

However, in practice, the government can certainly appoint politicians of a certain level to the board of directors, especially in its presidency to ensure that the company respects its policies and contributes to the implementation of its acclaimed government programme. However, the former CEO of Mauritius Telecom and Air Mauritius believes that the management of current affairs and operations should be entrusted strictly to non-political professionals. “By making wrong policy choices in the boardroom, politicizing the administration and tolerating the practice of bad governance, the government is shooting itself. This practice damages the credibility of the state and its economy because it undermines investor confidence in its institutions. This is costing people dearly, and it will work against this same power” .

But it gets worse when power entrusts boards of directors and corporate management to energetic politicians who, forgetting about their fiduciary obligations, whether intentionally or unknowingly, prioritize their partisan and personal agendas. There is no shortage of examples, such as the MK, when in the recent past those close to power monopolized the decision-making powers of the administration by imposing the powers of the Board’s subcommittees. board taken and imposed on leadership. However, where the shoe is pinched, the behavior of employees towards this approach is board, In general he was drowned by those close to the authority. “Employees have an interest in translating their loyalty to the company in favor of the ruling party to avoid reprisals. Even in companies where there are large and small private shareholders, no one dares to give an opinion different from that of the government conveyed by its political representative, right or wrong,” Meg Pillay adds.

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Race outcome: Specialists are emphatically emphasizing that this governance structure leads to inefficiency, reduces productivity, destroys profitability and financially affects public finances. We know that in a worst-case scenario, the resources of a poorly managed company are diverted to satisfy political patronage and promote personal enrichment at the expense of shareholders and the public good. Accountability and transparency are the basis of good governance. But it is no longer valid when partisan political interference becomes a reality.”, asserts the former CEO of a public company who was forced to vacate the floor in the face of political pressure.

This made Tim Taylor, the first chair of the National Commission on Good Governance in 2005, to say that the long-term solution must be the one he has always pursued, appointing “The right man in the right place” , Especially in crown companies to prevent them from getting bogged down in scandals. Some might say that is easier said than done. To this end, he advocates a replica of the New Zealand model with regard to the management of public institutions. “The government has set up a centralized national structure where those who wish to hold positions of responsibility in state institutions apply and will be selected according to their professional background, or even their academic profile when we have to recruit a rare bird to lead a government institution.”

However, others demand a return to the sources, Back to basics As the other will say. Meg Pillay points out that this country already has all the legislation, regulations and code of conduct it needs for good corporate governance. “Our legislators, our institutions and business leaders in our public and private sectors have worked hard over the years to provide us with an exemplary governance framework that fulfills our ambition to be a reputable business hub. Having made a modest contribution within these teams, we can say that such a return is only possible with political will strong.”

It is clear that this political will is missing despite the great rhetoric of the leaders who succeeded in power in this country decades ago…

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