Corporate governance on trial over Mera

 The Malawi Energy Regulatory Authority (Mera) saga has re-ignited the corporate governance debate in public institutions following government’s move to have the parastatal’s board of directors removed for incompetence over their handling of the CEO’s recruitment.

While some experts we talked to yesterday accused the Mera board of directors of “gross misconduct” in the recruitment of the organisation’s chief executive officer (CEO), others said the root cause of this controversy included the structure of the country’s legal and regulatory framework, the politicisation of State institutions and vested interests on the part of some board members.

The experts, in separate interviews yesterday, were reacting to the government’s decision to recommend the removal of the Mera board on grounds that the board did not conduct itself professionally in the recruitment of its CEO Henry Kachaje.

In an interview yesterday, former Electricity Supply Corporation of Malawi (Escom) CEO Kandi Padambo said Malawi’s

regulatory structure is to blame for irregularities in most government institutions.

He observed that the structure where the Secretary to the President and Cabinet (SPC) chairs some statutory bodies which are key in the country is not satisfactory and an error that needed to be corrected a long time ago.

Padambo said: “When we clearly look at the regulatory structure of Mera and others, you will see that the board does not really have much to say as there is the SPC at the helm.

“What we need is to de-politicise such appointments and in future have independent professional regulatory bodies to make such appointments. We need not just to look at what the board did, but the bigger picture.” On his part, a renowned corporate governance expert, who opted for anonymity, said the appointment of the CEO at Mera by the board was “gross misconduct”.

“One can clearly see the lack of independence in institutions that ought to be independent. The same board crafted the criteria for the post, but went on to pick someone not fit for this post.

“Such decisions are harmful,” said the corporate governance guru.

Consumer rights activist John Kapito yesterday said the development has unearthed how some government institutions are compromised.

Early this month, PAC proposed an amendment of laws that designate the SPC to serve as board chairperson of statutory corporations.

In a report presented in Parliament, PAC chairperson Joyce Chitsulo observed that there are serious problems in institutions whose boards are chaired by the SPC