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SOEs management not to sign performance agreements with boards

By: Kelvin Chiringa

Senior management staff of State Owned Enterprises will be required to enter into performance agreements with the chief executive officer and not their boards of directors, according to latest amendment proposals by the National Council.

Part of the motivation of this proposal is that senior management staff are not recruited by the board but rather by the CEO who is the one recruited by the board.

The CEO will be the only one thus required to sign such papers with the board as he/she is answerable to it.

Another proposal has been  made to the effect that if a decision is urgently needed, the minister may do so on behalf of the board and such a decision will be deemed as having been taken by the board.

“The amendment is necessary to ensure that no unilateral decisions with far reaching consequences are taken and this is in line with Principle C1-1 (1.7) of the corporate governance code for Namibia, 2014 on board responsibilities,” said the commission.

Clause 8 of the Act has been amended to ensure that inclusive decision making is adhered to in line with Principle C1- 1 (1.6) of the corporate governance code of Namibia on responsible leadership.

The clause will read that whenever it is necessary to appoint members of the board of a commercial public enterprise, either upon a first constitution or a new term of office or for filling a vacancy, stuff members in consultation with the minister must make a report to him/her.

Another proposed amendment to clause 21 sub-clause (b) will ensure that the line minister des not override the vested decision making authority of Cabinet in line with its duties and functions as contemplated by article 40 (a) and (k) of the Namibian constitution.

This is in line with the declaration of dividends by SOEs.

Kelvin Chiringa

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