Twenty-six parastatal organisations have been operating without boards of directors for several months, some for a year, since the expiry of mandates for the previous cohorts, choking certain essential policy decisions, Weekend Nation has established.
This has been happening despite President Peter Mutharika appointing board members for the 26 State corporations on August 6 2019, whose names were also announced in the media.
Besides appointing new board members, Mutharika also reconstituted some boards, but for four months, the appointees have not been given their appointment letters to take up their positions.
Both government spokesperson Mark Botomani and comptroller of Statutory Corporations Stuart Ligomeka confirmed that some parastatals have been running without boards of directors, and attributed the occurrence to what they described as “internal processes”.
Altogether there are over 80 parastatal boards. Botomani, who is also Minister of Information, Civic Education and Communications Technology explained that all appointed board members are supposed to receive appointment letters on the same date to avoid a scenario where each member has his or her own expiry date.
“They become board members after receiving an appointment letter, and not after an announcement,” explained Ligomeka.
“But government delayed to hand out the appointment letters because it took long to locate all the appointees, and because it wanted to issue the letters at the same time.
“The period becomes shorter if most members have been reappointed, but this time most members are new; hence, the delay,” he said.
But Ligomeka said they were still failing to trace some of the appointees who have not been forthcoming since the announcement was made.
Some designated board chairpersons and board members Weekend Nation spoke to, corroborated the development in separate interviews last week, but said they were not told reasons for not giving them appointment letters.
“I have not received mine yet, but I am told things are being worked out now,” said James Naphambo, re-appointed Blantyre Water Board (BWB) chairperson.
Naphambo said the board had not been functioning because board members “start working when we have all the appointments in place”.
Big State entities that have been operating without the board include BWB, Lilongwe Water Board (LWB), Central Region Water Board (CRWB), Malawi Housing Corporation (MHC), Small and Medium Enterprises Development Institute (Smedi), Southern Region Water Board (SRWB), Northern Region Water Board (NRWB) and the National Food Reserve Agency (NFRA).
The tenure of office for some boards expired earlier this year while others, like Admarc, have had no board members since December last year.
Former Admarc chief executive officer (CEO) Jerry Jana said the absence of a board leaves a “huge gap” and exposes management as they make unilateral policy decisions for the institution.
“If those decisions are wrong because they don’t have the board’s direction, management takes the full blunt of the outcome of the wrong decisions.
“The structure of companies is made in such a way that there must be a seamless flow of the decision-making process and implementation to achieve the intended purpose,” said Jana.
Legal scholar, who is also Dean of Law at University of Malawi’s (Unima) School of Law, Sunduzwayo Madise, said parastatals need boards at all times for purposes of legal authority as well as good governance.
“Ordinarily, the law says certain decisions have to be made by the board and when there is no board, the danger is that decisions can be challenged,” he said.