Case Studies −International
"India"
THE ISSUE
A quasi-government agency in an Asian capital conducts a selection of governance development programmes for boards and management in the substantial public sector of the country. Many of the independent directors are drawn from senior ranks of government agencies and, although governance development programmes exist, the agency tries to introduce the experience of other countries’ public enterprises to the directors.
OUR APPROACH
A TBPL Principal was invited to be a “foreign expert in the governance of SOEs and similar governed public sector bodies” at a two-day conclave conducted by the agency.
THE OUTCOME
Together with an in-country consultant and academic, the Principal attended the two-day conclave and in informal and formal sessions was able to share the experiences of other countries’ experience in the governance and ownership relationships in a manner intended to encourage the local directors to consider alternative ways of managing ownership, management and stakeholder relationships.
"International agency engaged by IMF "
THE ISSUE
An international agency was engaged by the IMF to evaluate the monitoring regime and protocols pertaining to four significant State-owned corporations. There was a reported reluctance on the parts of the Corporations to provide the requisite performance information to the Ministry of Finance, the agency responsible for ownership monitoring. A TBPL Principal with extensive public sector experience was engaged to complete the assignment.
OUR APPROACH
In-country interviews were conducted with the ownership Ministeries, the four Corporations, senior government officials and members of the Ministry of Finance. In addition, the advice of other consulting firms working in other parts of the economy proved invaluable. Comparisons were made of other public sector environments to assess the scope for adaptation to this country’s State Owned Enterprise and State Owned Corporation sector.
THE OUTCOME
It quickly became apparent that there were a number of separate but related issues:
- Financial reporting was based on a solar year calendar and progress in converting financial and other data bases to modern accounting practices was, although given high priority, slow. This also inhibited the payment of significant taxation arrears. Historical data had been lost during civil wars and foreign government occupation.The four corporations had gained varying degrees of comfort in being quasi-stand-alone organisations and were not disposed to respond to directions to provide regular and robust monitoring information to the Ministry of Finance. Line Ministries were major shareholders, as well as regulators. Some boards had Ministers serving as directors.
- The Ministry of Finance had a major capacity issue in regard to qualified financial analysts.
The SOE governance culture was not structured along the lines of best practice.The TBPL Principal developed a stages implementation plan for:
- A modern ownership structure for SOEs and SOCs.Recommended revisions to the Law of SOEs.Governance development programmes.Restructuring and strengthening the Ministry of Finance to equip it to be assigned the total responsibility for SOE ownership monitoring and SOE governance.Terms of reference for staffing the Ministry for ownership monitoring and governance.Terms of reference for the initial funding of the new processes.
- Defining the various roles within the Ministry and developing terms of reference for filling these roles.
