Fresh queries on SPC boards role

Fresh queries have emerged on having the office of Secretary to the President and Cabinet (SPC) chairing boards of some State-owned companies with some critics saying the arrangement is a mockery to corporate governance.

The queries by Human Rights Defenders Coalition (HRDC) and Centre for Social Accountability and Transparency (Csat) come in the wake of President Lazarus Chakwera’s recent appointment of 20 boards of statutory corporations.

The list includes National Oil Company of Malawi (Nocma), Electricity Generation Company (Egenco) and Power Market Limited whose boards are chaired by the SPC, an arrangement that was also earlier queried.

But Comptroller of Statutory Corporations Peter Simbani in an interview yesterday said the SPC chairs State-owned enterprises created under the Companies Act following the Memorandum and Articles of Association (Memas) that established the said institutions.

In separate interviews with The Nation yesterday HRDC chairperson Gift Trapence and Csat executive director Willy Kambwandira observed that the SPC’s job is more involving such that the officer’s board involvement in statutory corporations may affect the performance of the concerned State-owned enterprises.

Trapence said HRDC has always called for a legal reform to ensure that the SPC does not sit in different boards. He noted that most of the boards which SPC chairs report to the Office of the President and Cabinet (OPC) which he said is conflict of interest.

He said: “In terms of delivery, I don’t think it is healthy for the country. For good governance, we need some reforms to make sure that the office of SPC is freed from that.

“We need change of the law so that we have independent board chairs that can manage these parastatals. We have so many Malawians who can ably manage these institutions.”

In a written response, Kambwandira observed that the SPC’s involvement in several boards of parastatals compromises the decision-making processes in the said institutions.

He said the arrangement is also “a mockery to the principles of good governance”.

Kambwandira observed that the SPC’s job is already “too involving” and having the officer at the helm of several boards is counterproductive.

He said: “We strongly believe this arrangement is only influenced by greed and undue political influence. This is a recipe for fraud, corruption and abuse of power.

“It is an assault to the accountability mechanism because if the SPC makes a mistake as a chairperson, there is no one to hold him/her [accountable]. It is high time this anomaly is corrected.”

But Simbani argued that the SPC’s involvement in several institutions cannot affect the performance of the said institutions.

He said: “Performance basically is based on how the executive management of the institution is adhering to the set up rules or key performance indicators.

“By virtual of seniority among the initial directors of the company, you find that the SPC is the chair of those boards. So, as of now, you can’t change because it is in the Memas.”

However, in reality there has been tension between firms chaired by the SPC and others in the same sector, especially where there is conflict.

In February this year, former Malawi Energy Regulatory Authority (Mera) board chairperson Leonnard Chikadya pointed out that the involvement of the SPC at the helm of Nocma made it difficult for the regulator to undertake its functions.

“It would be extremely difficult for the Mera board to provide oversight of regulation on any institution where the chairperson is the SPC, who also heads the civil service,” he said in his resignation letter dated February 26 2022.

Chikadya cited a scenario where Nocma continued to receive fuel supplies despite Mera not approving premium fuel contracts as they would have burdened consumers.

In a report presented in Parliament in February this year, Public Accounts Committee of Parliament chairperson Joyce Chitsulo said there were serious problems in institutions whose boards are chaired by the SPC.

Last year, the Office of the Ombudsman also received a complaint on the alleged conflict of interest arising from the SPC’s leadership at Nocma.

Elect r ici ty Supply Corporation of Malawi also had issues with Egenco over bills.

In a statement issued on December 16 2022 signed by incumbent SPC Colleen Zamba, it was announced that besides finalising constituting the 27 boards of directors, government had also finalised the process of appointing individuals in the remaining 54 statutory corporation boards whose mandates are due to expire.

“Government has done this in the interest of serving Malawians, since all 83 boards of State corporations exist to catalyse national development,” reads the statement in part.

The new appointments have seen the President retaining six parastatal board chairpersons. They are Felix Tandwe at Air Cargo Limited, Gift Nankhuni at Lilongwe Handling Company Limited, Moffat Chitimbe at Airport Development Limited, Sosten Chiotha at National Herbarium and Botanical Gardens, Dennis Kalekeni at National Food Reserve Agency and Sunduzwayo Madise at Malawi National Council of Sports.

Simbani yesterday said Greenbelt Authority and National Economic Empowerment Fund Limited boards were awaiting confirmation from the Public Appointments Committee of Parliament and the Reserve Bank of Malawi, respectively.