Vindel Kerr, Contributor
KERR
TWO MONTHS ago, Prime Minister Patterson called a meeting with permanent secretaries, chairpersons and CEOs of public enterprises. The Prime Minister stated clearly that he intended to address the perennial problem of corporate malpractice among public officers. I want to join others in congratulating our Prime Minister. The Prime Minister's recommendations have been:
An ethical code of conduct to be developed to guide public officials.
The appointment of a senior officer at each ministry and agency to monitor the ethical behaviour of staff.
No board will be appointed by Cabinet that is not prepared to accept, understand and abide by the reporting chain that requires them to recognise the role of the permanent secretary as the accounting officer.
THE BASIS FOR PUBLIC SECTOR CORRUPTION
The basis for public sector corruption can be argued to be greed and the reckless behaviour of persons. Many highly-educated persons of above-average economic station have proven to be poor managers of public properties.
The practice of treating public property with scant regard is a culturally recessive habit which causes some people to think that anything 'government' is free and should be plundered in one way or another, and for their own self-fulfilment. This degenerative anti-social behavioural tendency is now more pervasive in the post-1970s generation. This group, although forming a significant part of the new-look Jamaican public sector, must be carefully monitored when entrusted with public good.
The fundamental problem affecting the integrity of public boards is not so much the corrupt nature of public servants but the inability of successive political administrations to put in place the appropriate structures and procedures and to ensure that these systems work. This is why when the PM spoke to an ethical code in the way he did, I immediately concluded that he could have been ill-advised or acting out of lack of an intimate understanding of the internal workings of these agencies.
An ethical code is good, but will only serve as a beginning in addressing the problem of corruption in the public sector. A comprehensive approach going beyond an ethical code is urgently needed in reforming and restructuring the nature and dynamics of governance of public entities in Jamaica.
RECOMMENDATIONS
My first recommendation is the establishment of a public entity corporate governance code of practice (PECGCP). This document would encompass an ethical code as proposed by the PM but will be more far-reaching in guiding, regulating and minimising public sector corruption. It would also address issues relating to director selection, appointments, orientation, board responsibility, term limits, performance and the evaluation of performance, conduct and commitment.
To administer this PECGCP, a public bodies governance council (PBGC) should be established under the Office of the Prime Minister. This council would have overearching responsibility for drafting reform, and in supervising the implementation of guidelines regarding selection, appointments, compensation, evaluation, termination of individual directors contract or the dissolution of entire boards which are found to be ineffective.
The PBGC would effectively reduce the power of the 'Responsibility Minister' - many of whom are partially responsible for the poor state of corporate governance being practised in many of the entities under their stewardship.
Finally, the membership of the council should come from citizens of Jamaica known to have no political leaning, have no form of criminal record, have lived in Jamaica for the majority of their lives, hold no government job, neither as a consultant nor otherwise, and should be paid well for their services.
The chairman and all members of the PBGC would be full-time in service and should hold no other job or responsibility from which they obtain compensation. The tenure of such committee should be no less than seven years, free of political interference and shall remain in force irrespective of party-in-power or changes in the appointment of a Cabinet secretary. Its appointment shall be by the Governor-General and it will report to the Prime Minister.
The PM should consider training in effective corporate governance for newly-appointed and existing members of the board of directors of public entities. Training and continued development of board members should extend beyond ethical guidelines for conduct of public servants to include:
The role and duties of directors and public officers.
Relationship between permanent secretaries and ministers.
Relationship between permanent secretaries and chairpersons.
Relationship between the board of directors, CEO and senior officials of the reporting ministry.
The merits and demerits of ethical wrongdoings and their social costs to society.
From my involvement with training public servants in Jamaica as well as in other countries on these critical relationships, I have found that in Jamaica, these appointees are usually not given the necessary tools with which to start. What I mean is that in most cases, the newly-appointed board members are neither given a company procedural nor a board practices guide. How then can we expect the best performance of our senior public servants?
This PECGCP would indicate the stakeholder groups, the process of identifying, selecting and nominating individuals from respective shareholder groups who the minister may or may not independently appoint to these boards - for example, a political activist versus a qualified and upright citizen. A clear process of identifying, nominating and ultimately appointing chairpersons of boards should also be clearly stated.
SQUANDERING PUBLIC RESOURCES
The Prime Minister needs to know that many chairmen of public entities have been flying first class all over the world with their chief executive officers and are staying in the most expensive hotels.
These chairmen are operating like they are executives. What is painful is that these are not missions to negotiate business for these entities, these are merely conferences, all-expense paid conferences after conferences. In the U.S.A. and Great Britain, two of the world's greatest and richest nations, first-class travel is reserved to a very few high-ranking civil servants and or public sector employees. Where is the Auditor-General of Jamaica? Why can't we adopt a more conservative approach to living?
My final recommendation is that the PM should make a deliberate effort to encourage whistle-blowing among public sector employees similar to systems implemented by the Private Sector Organisation of Jamaica where citizens are rewarded for information leading to solving crimes. Whistle blowers should be encouraged through a system whereby each individual working in the public sector is required to sign a statement of commitment re-affirming that they will not support corruption in any form and that they are obligated to reporting such incidences when such knowledge of facts is known to them. This may sound far-fetched but the problem of public sector corruption is too costly for it to be given lip service.
Vindel Kerr is the Managing Director of GovStrat Limited; founder and lead facilitator at the Centre for Corporate Governance and Competitive Strategy, and author of 'Effective Corporate Governance'. He has trained hundreds of directors and senior managers in corporate governance and strategic planning in the public and private sectors of the Caribbean. For contact: www.caribbean-governance.com
Taken from The Sunday Gleaner, July 17, 2005
