The World Bank’s Country Director, Henry Kerali has recommended the need for a well-defined ownership policy to be establish to fill in critical regulatory gaps, by providing sound foundation for good corporate governance.
This will make the broad policy directions of the State-Owned Enterprises (SOEs) clear.
Speaking at the 2018 SOE policy and governance forum held in Accra on Wednesday, Kerali said, “such a policy should be able to define SOE objectives, including the separation of commercial and non-commercial policy objectives, and financing of the cost directly from budget in a timely and transparent manner.”
He suggested the delineation of roles and responsibilities of the state as shareholder vis-à-vis the board of directors and management, as well as establishment of rigorous reporting and accountability standards.
This policy is expected to further establish rules and responsibilities on core ownership matters such as board nominations, performance monitoring, transparency and accountability, above and beyond what is required in the companies’ code.
In reforming the SOE sector, Kerali said SOE boards needs to be professionalised, to ensure that board members and executives have the requisite expertise, management experience and technical skills.
The SOE sector faces a number of corporate governance problems that affect their performance and ability to compete. These include low levels of transparency and disclosure, as well as, the lack of strong coordinating entity to exercise state ownership rights.
Early this year, the Senior Minister, Yaw Osafo-Maafo announced that by the end of this year, government will establish a single entity to oversee the activities of the SOEs. The State Interest and Governance Authority (SIGA) Bill is on course, as this new entity is expected to be fully operational latest by the second quarter of 2019.
The entity is expected to absorb all functions currently exercised by the Ministry of Finance, the State Enterprises Commission and other government institutions as far as SOE’s are concerned.
Currently, multiple institutions including the Ministry of Finance, the State Enterprises Commission (SEC), and sector ministries perform oversight functions in the SOE sector.
By Joshua W. Amlanu