It is said that he who laughs last, laughs best. I have failed to resist the temptation of bragging that Business Unpacked entries of mid last year have influenced change in the set up at the wholly government-owned Malawi Savings Bank (MSB).
MSB now has a new board of directors chaired, for the first time, by an outsider. Traditionally, MSB, due to its 100 percent State ownership, has been chaired by the Secretary to the Treasury (ST). However, this raised corporate governance concerns, especially in the event of one doubling as chief executive officer (CEO) and ST, thereby, automatically chairing the bankâ€™s board.
To avoid such complications, Business Unpacked suggested that the bankâ€™s statutes be reviewed to allow the hiring of an independent board chair and make the ST an ex-officio member. This has been done as government has now appointed entrepreneur and former Reserve Bank of Malawi (RBM) governor Victor Mbewe as MSB board chairperson with the ST sitting on the board as an ex-officio member. Congratulations to Mr Mbewe and your team! I wish you success as you steer MSB towards achieving its strategic goals.
What is more pleasing in the statement announcing the new board is that the new set up is “in pursuit of good corporate governance to allow the bank implement its business strategy…” This was my argument during previous entries which, I must confess, stepped on some raw nerves. But that is now water under the bridge as I have the last laugh.
The King Report III, the South African corporate governance code, emphasises the importance of separating roles of CEO and chairperson of the board: “The board should elect a chairman of the board who is an independent nonexecutive director. The CEO of the company should not also fulfil the role of chairman of the board.”
Now that MSB has embraced the concept or principles of corporate governance in its structure, my humble plea is that the bankâ€™s ownership should be spread to all and sundry by way of listing on the Malawi Stock Exchange. If it becomes a publicly-listed company, MSB has the potential to grow and deliver a diversified range of products and indeed make more profits and pay dividends to the shareholders.
The present ownership structure where government is the sole shareholder is (and has been) prone to abuse, especially by some politicians running the show at a particular time. It has happened before and can happen again in future. If not checked, we will all be losers if the bank folds because some politicians and their associates have abused the system. Remember the downfall of the Malawi Development Corporation (MDC)?
Government can retain a certain percentage of the shareholding, say 30 or so. Better still, there can be a 50-plus-one percent shareholding through public-private sector partnership.