Escom bosses’ hiring mess

An informal chat among some Escom board members nullified a board decision to advertise nine executive management positions at the power utility company, Nation on Sunday has learnt.

The result of the informal decision according to our findings was that the company filled most of the top posts by hand-picking senior managers instead of conducting interviews, which are the best practice for competitive recruitment process.

The recruitment of chief executive officer, chief operating officer (COO), director of procurement, director of human resource and director of legal and corporate affairs is contrary to a resolution of the Escom board, which agreed that all positions should be advertised.

Board chairperson Jean Mathanga confirmed in an interview that the board had initially agreed that all the nine positions of the executive management be advertised, but she conceded that she later agreed, informally, with board members to cancel the advertisements. Instead, Mathanga said the board decided to handpick people on specific positions in executive management because experience has shown that some applicants of posted jobs do well in interviews, but fail to deliver.

“When we met to reverse the recruitment through advertising, it was not a fully-fledged board meeting per se, but we discussed the issue among members. I cannot comment on how recruitment was previously done, but at the moment we agreed this was how it was going to be done.

“We found the current executive management in office, but its contracts expired and we have been looking at ways of how best we can ensure we recruit the best available talent and we opted to scout for the talent instead of asking people to apply for the jobs,” said Mathanga.

She further conceded that the board never formally agreed to change its position on how the recruitment was to be done, however, open advertising was stopped in consultation with the rest of the board.

Mathanga said the board has also promoted Escom internal engineers to executive management p o s i t i o n s w i t h o u t competitive interviews and none is raising questions on that process. But a member of the parastatal’s board, speaking on condition of anonymity, disputed Mathanga’s claims, saying several board members have raised queries on the matter.

“There was no meeting that approved this and we are worried that this decision raises issues of favouritism as some members of the current executive management have been retained while others have not; some people have undergone competitive interviews while others have just been hand-picked,” said the board member.

Office of the President and Cabinet (OPC), Statutory Corporation Department and Department of Human Resource Management have waded into the controversy by regularising the process with representatives from each department currently participating in interviews for the hand-picked individuals.

Our findings, which have been confirmed by Mathanga, indicate that for the position of CEO, only Evelyn Mwapasa, formerly a commissioner on the Civil Service Reforms Commission, has been interviewed while the incumbent CEO John Kandulu was overlooked. In an interview, Kandulu confirmed he had not participated in any interviews for the CEO post.

“You have asked me to speak to you candidly, I will be candid: I am not aware of any interviews. I have also not participated in any interview,” Kandulu confirmed to Nation on Sunday.

Escom spokesperson Kitty Chingota said in a written response that Escom is a private company incorporated under the Companies Act of the Laws of Malawi, but on governing issues, the shareholder has entrusted the management of the company to the board of directors.

“The instrument which governs Escom is its memorandum and articles of association [Memarts], which is the constitution of Escom and on governance issues, the board of Escom is mandated by Article 82 to manage and exercise powers which may not be exercised in a general meeting and this power includes the appointment of senior officers such as executive management members and the chief executive officer on such terms as the board shall deem fit,” said Chingota.

She added: “In terms of Article 113 of the Memorandum and Articles of Association of Escom, the board is vested with the powers to recruit the chief executive officer and senior executive management members. Therefore, the Escom board is the ultimate authority to recruit and appoint a chief executive officer, including senior management members.”

But another source in the Escom board, who also spoke on condition of anonymity, said the hiring of senior management has led some senior executive management members and members of the board to speculate.

“Now people have been left to their speculative designs. The question being asked is: ‘Why [are there ] so many double standards on who was going to be retained at Escom and let go; who was going to go through competitive process or not, promoted or retired?,” wondered the source.

M e a n w h i l e , c o r p o r a t e governance expert Anthony Mkumbwa has faulted the hand-picking recruitment process at Escom and asked the parliamentary committee responsible for parastatals to probe the matter.

Mkumbwa, in an interview, said the decision of the board chairperson can be challenged. He warned against government interference in Escom activities.

“First, Escom is a public company and; therefore, is expected to follow corporate governance best practice.  Malawi, like any country, has a national corporate governance code which gives a guide on corporate governance matters for companies.

“This is the best practice. There are also industry-specific corporate governance codes. Utilities code would be more relevant to Escom. In addition, the Companies Act and also Escom ‘s own Memarts stipulate the authority and responsibilities for the board of Escom, including recruitment of executive managers to be in the hands of the board. The junior staff can be recruited by the executive managers upon approval of the board,” said Mkumbwa.

He added: “Board decisions are collective decisions and the chairperson of the board has no mandate to make decisions on his/her own, let alone, unilaterally reversing a board decision. That is wrong and shouldn’t be accepted by the other board members.

Whatever decisions the chairperson makes, not involving the entire board can be challenged. The shareholder of Escom, which is government, appoints the board of directors for Escom to direct Escom affairs on government’s behalf.

It would be wrong for the same government to interfere in the affairs of Escom. If it has any issues it is not happy with Escom, such issues will have to be raised with Escom board through the chairperson.”