Twelve parastatals have been operating without functioning boards for as long as six months in some cases, a development Comptroller of Statutory Corporations Peter Simbani yesterday admitted is crippling their ability to effectively deliver on their mandates.
The parastatals are Agricultural Development and Marketing Corporation (Admarc), Air Cargo Limited, Airport Development Limited, Canabis Regulatory Authority, Greenbelt Authority and Lilongwe Handling Company.
Others are Malawi College of Accountancy, Malawi College of Health Sciences, Malawi Housing Corporation (MHC), National Aids Commission (NAC), National Food Reserve Agency (NFRA) and National Economic Empowerment Fund (Neef).
The vacancies follow the expiry of board of directors’ contracts in their respective institutions between September 2024 and February this year.
For instance, MHC has been operating without board of directors for the past six months as their contracts expired on September 22 2024 while NRFA’s board expired on October 9 2024.
In an interview yesterday, Simbani attributed the delay to parastatals’ line ministries’ failure to furnish his office with profiles or curriculum vitae (CV) for nominees to the positions.
He said: “The delay to appoint board of directors is automatically affecting service delivery in these institutions. As you know boards play oversight function in each institution, for instance, on financial management, resource utilisation and issues of governance.
“So, if the board is not there, some operations stop because they require the board’s approval. For instance, institutions cannot go to a bank and borrow money without the board approval.”
Simbani, however, expressed optimism that all the institutions should have their boards reinstituted within the next two weeks.
The vacuum in boards come on the back of the Ministry of Finance and Economic Affairs’ latest Annual Economic Report showing that most trading State-owned enterprises performed poorly.
Commenting on the vacancies in the boards, Malawi University of Business and Applied Sciences (Mubas) governance scholar Andrew Kaponya observed that the institutions operating without boards risk making “illegal decisions.”
He said the absence of board of directors in various parastatals simply means those institutions do not exist.
“These companies are dead because for a statutory corporation to operate it has to make decisions. The board is a governance structure that represents owners of that company to make decisions and play an oversight role.
“So, [from] a governance perspective, it is dangerous and uncalled for to operate without board of directors because these companies are illegally operating.”
Meanwhile, the Comptroller of Statutory Corporations yesterday released names of board of directors for the country’s five water boards, namely Blantyre Water Board, Lilongwe Water Board, Southern Region Water Board, Central Region Water Board and Northern Region Water Board.
The latest appointments follow the piecemeal pattern of announcing the parastatals’ non-executive directors over the last six months.
