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Repositioning Bahamian public corporations

ARINTHIA S. KOMOLAFE
commentary@komolafelaw.com

Published: Aug 27, 2013

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Public corporations have been the topic of much public discussion over the years in civil society. The Bahamas has not been excluded from this public discourse and this is not surprising seeing that the Government is the largest employer in our nation. The scope of the Government’s reach is so vast that it is almost a given that every Bahamian knows or is related to someone that is employed within the civil service.

In the aftermath of the ‘Great Recession’ there has been renewed focus on the governance and operational efficiency of government and statutory agencies. Further, increased scrutiny has been placed on the burden they place on the public purse, their management and more prominently, ongoing government control and support of these agencies. This conversation is no doubt overdue as we are engrossed in a changing world that continues to grow smaller through the settlement of trade agreements, multinational free market enterprise, regional integration, tourism and the movement of labor. In this sense, The Bahamas must reposition itself to compete both domestically and globally. The remodeling, realignment and possibly restructuring of its agencies are important in this exercise.

 

Corporate governance

The global economic and financial crisis revealed the flaws in the governance structures and in some cases the absence of effective corporate governance practices in various government and financial institutions. It has been asserted and widely agreed that this deficiency contributed to the failures of these entities. Specifically, the lack of adequate knowledge and proper oversight by directors and management was highlighted as the norm in the years leading up to the crisis.

The lessons learned from the financial crisis are valuable and must be applied to the Government to strengthen public corporations and statutory bodies. At the forefront of any new initiative must be the establishment and implementation of effective corporate governance frameworks which outline the roles and responsibilities of board members and executive management.

The roles of each party and any delegated authorities between the Board and executive management must be clearly articulated to avoid confusion. In this regard, board members must be mindful not to engage in activities reserved for management, such as day-to-day operations of the institution. On the other hand, the role of the Board which is to provide strategic direction and proper oversight of management should not be assumed by management. Management must be mindful of their boundaries so as not to make decisions and take actions that may have an adverse impact on the organization without the requisite consent or approval from the Board.

More importantly, a code of conduct and appropriate policies addressing conflicts of interest among others must be established. Policies should be approved by the board and there should be procedures for each area of an institution to ensure consistency, uniformity and continuity. Public entities should not be held to a lower standard than their counterparts in the private sector for the simple reason that they are accountable to the Bahamian people and taxpayers in general.

If executed effectively, policies will provide proper oversight to the management and affairs of the institution, thereby building trust with the public, reducing the risk of corruption, scandals or any liabilities that the institution may be faced with. Effective corporate governance plays a major role in an institution’s ability to be proactive in addressing the concerns or needs of its stakeholders and its responsiveness to market dynamics.

 

Strategic planning

There is a common saying that “those who fail to plan, plan to fail”. Too often, public corporations unlike their private counterparts fail to devise and/or implement a documented strategic plan that will guide them and provide the necessary direction for the organization. In this sense, some of these entities function without a clear path to achieve any established short or long term goals. The Board and management should ascertain or revisit the vision (what it wants to be), mission statement (purpose of the organization) and core values (the belief that the organizations’ stakeholders hold) of their entities if they have not done so. This will position the entities to set goals and objectives and devise the methodology that will be employed to achieve them; including the attainment and allocation of resources.

The Government should require documented strategic plans of all of its agencies and statutory bodies and establish a system to measure their progress in achieving stated plans which must be in line with the Government’s priorities and policies. At a minimum, a synopsis of the strategic plans should be communicated to the public to obtain buy-in, promote public education and avoid surprises when initiatives are launched. The implementation of viable strategic plans within public corporations should provide much-needed focus to these entities and make them less susceptible to political influences and changes in government.


Management of resources

In this age of prudence, one of the most important mandates of public entities should be the prudent as well as efficient allocation and use of resources. The perceived culture of wastage and excess which is informed by a misconception that the Government should assume any and all shortfalls needs to change. In what has been termed as the era of austerity, the Government is constrained to reduce its expenditure and subsidies to various agencies. This fact is evident in the Ministry of Finance’s much publicized mandate to entities that are reliant on subsidies or subventions from the government.

The adjustments here in The Bahamas have been mild when compared to measures taken in other jurisdictions as many civil servants across the globe have either been laid-off or witnessed a reduction in their benefits. For many central governments, this was a hard decision that cost them votes at the polls, but these actions were necessary. Leaders of public corporations must operate their organizations based on the prudent fundamentals adopted by successful private enterprises without recourse to the public purse to fund inefficiencies.

The efficient allocation of resources may call for the realignment of staff. However, this is one of the greatest challenges that leaders of public corporations are faced with and an area in which they perceive their hands as being tied. The inability to discipline or terminate inefficient and ineffective staff without political interference continues to impede the success of public entities. While in and of itself, it is not unreasonable for politicians to refer and recommend certain constituents, friends or family for various posts, the most qualified applicant should be employed and there is no justification for the retention of unproductive workers.

 

Resiliency and service excellence

Public corporations must institute plans to defend against disasters, internal and external disruptions. Leaders of public corporations must realize that continuity of service despite challenges plays a major role in good customer service. Moreover, an effective contingency plan contributes to the safeguarding of relevant records and documents necessary to manage the organization.

In the final analysis, amidst all of the above necessities of an organization, customer service tops off the list. Poor service delivery remains the number one complaint of customers of public institutions in The Bahamas. Public organizations must see the need to improve customer satisfaction at all levels and this must form a part of their strategic plans. Employees that are equipped with the necessary tools and resources to carry-out their functions are prerequisites for organizational success. Good work ethics and excellent customer service must be the order of the day if public entities are to be repositioned for 21st Century Bahamas.

 

• Arinthia S. Komolafe is an attorney-at-law. Comments can be directed at commentary@komolafelaw.com.

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Caribe 2016 Cleveland

 

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