PM outlines new rules for appointment to public boards

Senior staff reporter

Wednesday, March 20, 2019

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PRIME Minister Andrew Holness told the nation yesterday that the Government is implementing measures to ensure that the boards of public bodies are appointed in a transparent manner, as the administration seeks to clamp down on the mismanagement of state-run entities.

“We want to ensure that the best minds and skills get a fair chance to participate. Good people will not come forward to be considered for appointment if the appointment system appears irrational, blatantly biased, overly bureaucratic or likely to impugn their integrity,” he told the House of Representatives in his 2019/20 budget presentation.

Holness, noting that regulations for a new policy to guide the process are being developed, said the new appointment regime will create a strong institutional mechanism to support ministers in identifying, selecting and appointing board members.

He explained that appointments will remain the remit of portfolio ministers, for which they will be held accountable. “It is to be expected that they (ministers) take a close interest in the process and have confidence in the people they appoint. After all, ministers can pay the ultimate price for the actions of their appointees,” he said.

According to the prime minister, a competency profile specific to each public agency will be developed and a database of candidates suitable to each agency established. Following the portfolio minister's review and selection from a short list, the names will be submitted to Cabinet for approval.

Also included in the new policy guidelines is that ministers must approve travel for board chairmen, either to or from the island. Holness said candidates must also disclose their residency status to the minister and the Cabinet in order to inform the decision-making process about the potential cost that the Government could incur by appointing persons who live overseas, he stated.

The policy comes in the aftermath of the Petrojam scandal in which it was revealed that former board chairman, Perceval Badahoo-Singh, who resides overseas, had been reimbursed airfare for a business trip to the United Kingdom, that had been cancelled.

But Prime Minister Holness pointed out that the new policy is not only applicable to Petrojam.Additionally, he said there will be detailed procedures for how public bodies can make donations, including limits to be set by the Ministry of Finance, uniformed applications and approval process; the disclosure of all donations and connected parties in the financial statements; streamlining of donations through designated entities whose core mandate is to grant funding; and monitoring and evaluating the use of such funds. More stringent procedures are also coming for the use of retainer contracts, which will require that all such contracts that are to be sole sourced should have Cabinet approval, and connected party interests with the board or management must be declared to the Cabinet. A retainer contract with an events management company was among the issues highlighted in the auditor general's damning report on the operations of Petrojam.

The prime minister also told the House that based on the new guidelines, the form of the non-disclosure agreement or confidentiality clause must not fetter the Parliament and the monetary value of the settlement cannot be subject to these agreements and confidentiality clauses. He said the public must know the value of these payments.

He stressed that poorly run public bodies pose a threat to the country's economic programme and fiscal certainty, outlining that there are 163 public bodies, 56 of which fund themselves. He said public bodies employ 13,398 people and generate revenues of approximately $406 billion from which they transfer $16.7 billion to central government.

Holness further informed the House that total public bodies expenditure for this fiscal year is projected at $443.9 billion, while central Government will spend $803.2 billion.

Said Holness: “Public sector bodies are more than half the size of central government's expenditure footprint and just as large as central government's capital expenditure footprint. The Government cannot leave the governance of these agencies to chance as any mismanagement or governance failure in the public bodies can have devastating effects on our fiscal accounts.”

He pointed out that the country has faced this situation before when loss-making public bodies contributed significantly to the national debt. He said the Government must therefore ensure that these entities are properly run.

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