Bill outlaws CIG board conflicts

| 11/01/2017 | 26 Comments

(CNS): The Public Authorities Bill, 2016, which is expected to go before legislators over the next few weeks when parliament meets for the last time before the General Election, will, if passed, outlaw conflicts of interest for board members. The new legislation will standardise statutory authorities and government companies (SAGCs), create a level playing field for the public servants working in them with the civil service and ensure they all follow public finance rules. But one of the key elements is the new rule regarding politically appointed board members, as the law legislates against conflicts of interest.

If the law is passed, as is expected, once implemented, the members of SAGC boards will not be allowed to serve if they are conflicted. The legislation states in Clause Eight Section (4) b that anyone appointed shall have “no financial or other interest likely to prejudicially affect the exercise of that person’s functions as a board member”.

Cabinet must be satisfied that a person is suitably qualified to fill each director position and that there are no conflicts of interest surrounding their appointment. Board members will be required to give a full disclosure of their interests “to establish that no conflict of interest exists”, as required by the Standards in Public Life Law, 2014 and the Anti-Corruption Law (2016 Revision).

But some of the boards that have historically presented significant conflicts — such as the Central Planning Authority, where by its very nature several members are always bound to gain financially by granting permission to develop — will present new problems for government. The requirement that board directors are also experienced in corporate governance, financial management and competent in the field which the SAGCs they serve covers will be challenging when it comes to appointments. Finding the necessary skills without direct conflict will require careful consideration of potential directors.

Although board members are political appointees, the law also requires that directors carry out the “duties required in a highly competent and politically neutral manner”.

Despite the autonomy that SAGCs have, the new law sets out more clearly the responsibility that Cabinet and chief officers have for them in the relevant ministries. While historically the civil service management has maintained a hands-off approach and dodged any responsibility for the rogue or questionable behaviour of authorities, the new law spells out the role for government’s inner circle and top civil servants.

Cabinet is the ultimate owner or shareholder and it is responsible for appointing the board and policy. The law states that where appropriate, it can directly intervene in the operation of the public authority where it is in the public interest to do so by giving general and lawful directions. It can order an inquiry where it believes a given SAGC is not toeing the policy line.

Chief officers will be required to monitor the purchase and ownership agreement of a SAGC for compliance and ensure that its financial reports are presented to the Legislative Assembly in the prescribed format. In the past, chief officers have appeared to have very little knowledge about the SAGCs in their ministries when pressed by legislators during the finance and public committee hearings.

Given that there will be changes regarding the terms and conditions of some employees in some SAGCs after the law has been implemented, it also provides for a transition period.

See the new PA bill in the CNS Library

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Category: Government oversight, Laws, Politics

Comments (26)

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  1. Anonymous says:

    Dear CNS, just a clarification – the Public Authorities Law will NOT deal with boards such as the Central Planning Authority, Builders Law Board, Liquor Licensing Board and a few others. And, apparently neither will the new Utility Regulation & Competition Office be subject to this new legislation is what I have heard.

    • Anonymous says:

      5:09 very true and because those are operational boards not governance boards.

      This bill is so badly needed. Read the Auditor General reports. The Civil service had been cutting and reducing expenditure while the SAGC’S are giving pay rises and bonuses.

      the SAGC’S refused to take the 3.2 % pay cut when the Civil Service did but ran begging for the 4% increase when the Civil Service received it.

  2. Board member says:

    The one glaring omission from this proposed law is that it does not prohibit retired civil servants from being appointed to boards. This means that the ‘civil service’ mentality will continue to pervade and prevent proper commercial decisions from being made.

  3. Anonymous says:

    This a bit like the old story about King Canute ordering the tide not to come in – you can try it but it ain’t going to happen. The fact is that conflicts in public office have been a way of life for longer than anyone can remember and enacting this legislation won’t make a bit of difference. Most of it is already covered under current laws and civil service rules anyway but you can count the number of senior public sector employees or holders of public office who have ever been successfully prosecuted on the fingers of one hand. At least one has even bounced from disgrace to hold a senior post in the civil service.

  4. Anonymous says:

    The runaway SAGC’S are all shaking in their boots over this bill. They are terrified that their huge salaries bonuses pay rises and the employment of friends and family will be reduced or taken away.

    This is a very brave attempt by the government to pass a bill that the SAGC’S got shelved for 10 years.

    • Anonymous says:

      Amen, 8:22. You can bet they are already planning to protest to government that capping their salaries and those of their employees will “adversely affect their independence and capacity to do business” blah blah blah. They should have been controlled LONG ago.

  5. Anonymous says:

    Think of the judicial system.
    The CEO is the judge who steers the board and the board are generally jurors.
    How many jurors have experience in bank robberies or murders.
    The attorneys are the applicants or complainants or whatever.
    The planning is simple.
    Is it compliant to the building regulations and planning law.
    If yes grant it, maybe ask for minor changes if there are complaints.
    If no deny it, or look at the level it fails on and work with the people.
    Its not that hard.

    • Anonymous says:

      This bill is badly needed. Even the Compass thinks so.

      The SAGC’S have been spending our money without restraint for years now.

      Think of the turtle farm wasting millions. Think of the UCCI giving out expensive Doctorates when they don’t even offer such a degree.

      Does anything think that CIMA is doing a good job.

      Not to mention the port whose staff is probably the best paid in the entire public service. (Well at least on par with CIMA)

      Thank you for finally tacking this monster.

      • Anonymous says:

        I don’t work for CIMA, but I deal with them regularly and I have to say in recent months things have improved immensely. As for pay, I don’t think you are well informed, I have seen the adverts. I am more than qualified to apply, but the salaries are way too low. And that is part of a larger problem-if you want the best people, you need to pay them. Otherwise, CIMA (amongst others) is merely a preparation for other private sector jobs. And it needs to be world class, all the time if we are to stay ahead of the curve.

  6. Anonymous says:

    Perhaps a more effective restriction would be that no public Board includes any Lodge member! Of course we will not see that day!

  7. Silent Liquidity says:

    Someone should tell those in high positions to stop calling the flock together brainwashing them into who they should cast their vote for in the next election.Why are some so afraid of the Bogeyman Mckeeva Bush and using him to motivate voters to vote for them.

  8. PPM Distress Signal says:

    Well PPM this is the best indication to me that you know that you are not getting reelected because if this law is passed and ratified not a single board you have will stand thus you are setting this in place for the next administation. My Question is to you who and what authority is first going to vet these appointments and enforce this fancy law surely not standards in public life and ACC who themselves are conflicted. Yes the Cayman people know exactly who those members are appontment by and exactly who and where their loyalties lie. Our shall it me the new trend i now see Madam Governor doing appointing outsiders who simply dont have clue or are simply indifferent for their own financial & social and immigration interest.

    • Anonymous says:

      My my 12.09! Aren’t you smart? Or maybe not.

      • Byron Whitley says:

        Well, 12:09 certainly seems to know how things are! If you can’t imagine there being any corruption in our government, then maybe it’s YOU who is lacking intelligence.

  9. Anonymous says:

    Needs one of the big 4 accounting firms to oversee it and advise…

  10. Anonymous says:

    This should be interesting. lol

  11. Anonymous says:

    Great now every board will be filled either by people who have no experience, know nothing of the industry that the particular board deals with or retired civil servants. Fantastic move PPM.

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