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Parastatal performance poser for Moyo

MINISTER Gorden Moyo is the new patriarch appointed to shepherd state enterprises and parastatals. He is expected to hit the ground running. Alas, that ground is infested with booby traps.

Changing the fortunes of the perennial under performing of state owned enterprises (SoEs) is no Disneyland stuff, given the bone-deep nature of institutionalised profligacy and misgovernance.  Is Moyo being asked to flog a dead horse?

Failure to de-mine the booby traps will condemn the minister’s mission dead on departure.
From the get-go he has to budget for the spectre of turf wars. His ministry potentially creates two centres of power. Moyo has legal brick walls to contend with. Current laws mandate and empower the SoE line minister to appoint and disappoint board members and set their remuneration. Let us consider the Air Zimbabwe Corporation Act Chapter 13.02 to illustrate the poser. Part II 5(1) states that “The board shall consist of six members of whom the others shall be appointed by the minister after consultation and in accordance with any direction the president may give him”.

Will the state enterprises and parastatals minister have the guts to castrate the powers of the relevant line ministers and deftly deal with “any direction the president may give him”? As they say, no guts no glory. Some heavyweight punching is inevitable, for without influence on who gets into and out of the SoEs boards, the SoEs minister’s revival agenda will remain a pipe dream. Imminent pressure to shorten the channel between policy and delivery might force the minister to take the bull by its horns, pushing for amendments of acts governing SoEs and calling the employ of international governance benchmarks as a spring board. Pushing for such amendments will inevitably set the reformist minister on a collision course with line ministers and possibly the presidency itself.

The Organisation for Economic Co-operation and Development (OECD), a body comprising of “30 democracies” came up with the OECD Guidelines on Corporate Governance of State Owned Enterprises, currently the widely accepted international benchmarks on governance of SoEs. The minister may turn to these guidelines in a bid to push a parastatal governance reform agenda. Most likely, reference will be made to Chapter II (The State Acting as Owner), particularly sections D and E.

Section D of Chapter II states that “The exercise of ownership rights should be clearly identified within the state administration. This may be facilitated by setting up a coordinating entity or, more appropriately, by the centralisation of the ownership function”.  Section E of Chapter II states that “The co-coordinating or ownership entity should be accountable to representative bodies such as the parliament and have clearly defined relationships with relevant public bodies, including the state supreme audit institutions”.
In my opinion, Moyo should push for a Bill enabling the formation of a central SoE authority and the adoption of an SoE governance code crafted along the lines of the OECD guidelines, niftily steering final arbitration towards parliament. Taking the route of amending specific acts governing each parastatal will more than likely give rise to legislative and procedural logjams. Moyo could also, nimbly enter into alliance with his finance counterpart to push for parastatals’ submission of comprehensive remuneration schedules as part of statutory obligations.

Should the minister succeed in getting over foreseeable legislative hurdles and selling the governance reform proposals, space will be created to modernise our archaic and inadequate SoE governance guidelines. At present, the SoE line minister is both the nominations and remuneration committee. Statutes in force are silent on the issue of board committees. Modern governance practices specifically provide for the setting up of specialist board committees. From an HR standpoint, the key to ensuring good performance is conducting rigorous and professional selection, induction and rewarding of best talent. At board level a similar approach is inescapable. With dearth of strategic talent, Moyo might have to turn to children of the diaspora to improve the depth and width of the pool of candidates from which to populate the boards of over 70 SoEs. However, for now, the law does not allow non-residents to serve on boards of SoEs. Hopefully, any statutory reforms will be alive to this legal hurdle.

Moreover, no formalised procedures for evaluating the performance of board members of SoEs are provided for in the current SoE acts. Performance evaluation is very critical. Utterances from a recently “red-carded” minister, claiming that no agreed targets existed, provide an object lesson. From an HR perspective, the utterances are very disingenuous and serve to justify the minister’s dismissal. If the minister were the captain of the Ghanaian soccer team, he would be happy to play the entire 90 minutes without knowing which goal his team was attacking! This is playing to the gallery. Likewise, SoE boards that play to the gallery must be axed. Steve Covey gives the pillars of a good performance management system namely: desired results, guidelines, resources, accountability and consequences. Bemoaning lack of resources yet you’re not sure of desired results is self-condemnation.

Moyo’s predecessor’s report card is uninspiring, chiefly because he took a management approach to weighty matters. Managers serve to maintain systems designed by others. His mourner-in-chief tag, earned through habitual lamenting non-cooperation from line ministries, suggests he could have been punching above his weight. His 11 somewhat-over-70-something salary schedule gathering success rate bolsters this view. The SoE ministry needs an architect and not a maintenance manager.

Operation Bagration, a military offensive masterminded by Russian generals, deftly executed in the summer of 1944, was a major turning point in World War II. Hitler’s armies were occupying almost all of Eastern Europe, en route to Russia. In the face of an imminent German onslaught, one Russian general came up with a daring plan that defied military logic. According to the cunning plan, Russian armies and armoured tanks would secretly approach through Belyorussia via an expansive swamp! That involved Russian armies felling logs to pile over the swamp creating several highways of skillfully layered logs. Special mat-like shoes for walking through swamps were made, after learning the technology from natives living around the area.
Though Hitler’s intelligence picked information about an impending attack, his army generals gave all possible positions and directions, from which the Russians could approach, except the swamps. The Russians succeeded in moving over tanks and men, springing a summer surprise on the Germans, routing Hitler’s armies in the blitz. That summer campaign repulsed the Germans from Eastern Europe, culminating with the recapture of Poland, a key milestone, in the liberation of Europe from Hitler’s then tightening octopus grip.

I read a sarcastic piece from leadership expert John Maxwell titled Ten strategies for flogging a dead horse. Suggested strategies include conferences to discuss how to make a dead horse go faster and pretending the dead horse was not really dead. That the horse is dead or not is for the minister to ascertain.

Moyo needs Operation Bagration thinking to move through parastastal swamps.
In our African heritage it is said orphans should take heed when parents counsel their children. Here is hoping ‘orphans’ are listening.
Has the Minister been called to flog a dead horse? Feedback to  brettchulu@consultant.com.

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