(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.