In the interest of good governance of public boards it is best if individuals either decline membership or resign from these boards if they have stakes in entities with which Government bodies have a transactional relationship, according to Robert Stephens, a member of human rights and good governance lobby group Advocates Network Jamaica.
Stephens issued the caution in a discussion with the Jamaica Observer on Thursday against the background of the Integrity Commission's report to Parliament highlighting a conflict of interest in the reappointment of Hardware and Lumber (H&L) Deputy CEO Olive Downer Walsh to the board of the Rural Agricultural Development Authority (RADA).
Arguing that it is not sufficient for directors to recuse themself from decisions related to the company or entity with which they are affiliated, Stephens made clear he was not commenting on the report itself, but generally on public board appointments and good governance practices.
"As I have told previous board members, 'If you are on a board of a public sector organisation and that organisation has to choose a contractor and you're on the list, it is better for you to resign from the board and not be associated in any way with the choice of the company to be doing that contract'," Stephens insisted.
"In general, whenever there is the possibility of a conflict of interest, then the conflict should be avoided. If I'm sitting on a board and that board is giving out a contract for a company that I'm associated with, then either I tell them I would prefer if you use a different company or recuse myself from the board, period. You can always remain a member of the board and recuse yourself from the discussion of the contract, but that is not good enough if you're going to be one of the key people who are with the company that has the contract," he said.
Stephens said, too, that such an individual's presence inhibits the objectivity of the other directors.
"We need to ensure that we have proper governance in this country, particularly with respect to public sector agencies that make major decisions with respect to expenditure of taxpayers' money," he argued.
Meanwhile, Hardware and Lumber has defended Downer Walsh's integrity and transparency in relation to her position as a director on the national board of RADA, alongside her role as deputy CEO of the company.
H&L pointed out, as the commission did, that Downer Walsh had declared her commercial ties upon being appointed.
"It is unfortunate that suggestions have been made that H&L inappropriately benefited from Mrs Downer Walsh's presence on the RADA board. The review process for RADA contracts for which H&L offered bids was always open and transparent, and the National Integrity Commission (NIC) has concluded that there is no evidence that Mrs Downer Walsh or H&L obtained any improper benefit from her association with RADA," the company stated.
The commission had said in its report that RADA's attempt to manage a potential conflict of interest by Downer Walsh's recusal from H&L contract decisions was insufficient.
The commission's director of investigations Kevon Stephenson reported that Downer Walsh had direct involvement in the preparation of tender documents and the execution of contracts between both entities, pointing out that after her appointment to the board she had engaged RADA regarding procurement activities and opportunities on behalf of H&L. The report said correspondences were addressed directly to her by RADA in her capacity as deputy chief executive officer of H&L Limited.
The commission also rejected former Agriculture Minister Floyd Green's rationale for reappointing Downer Walsh to the RADA board in 2020, pointing to her position with the company, a long-standing contractor with RADA.
Between January 2017 and January 2021, RADA awarded 14 contracts to H&L Limited, totalling $136 million. Three of those contracts were endorsed by Downer Walsh, on behalf of H&L.