Stewards of public trust
RECENT HAPPENINGS at two of the country’s tertiary institutions have demonstrated how things can fall apart when boards do not give reasonable attention to their legal and ethical responsibility to provide oversight of the institutions they are appointed to serve.
Specifically, we refer to the Caribbean Maritime University (CMU) and Edna Manley College of the Visual and Performing Arts, both of which have come under national glare for alleged maladministration in certain aspects of their operations.
From time to time, also, we have lived through various scandals and sensational allegations swirling around other public sector entities, which call into question the stewardships of their boards whose action, or inaction, has left their credibility in tatters.
As we understand it, the management of an organisation is responsible for the day-to-day operations, while the board oversees the strategic direction to ensure that the entity is managed in an effective and efficient manner. Essentially, the board and its members are the stewards of taxpayers’ money that fund public entities.
The board collectively, and its members individually, has a duty of care and is expected to operate in the best interest of the organisation and the people it serves. It means that claiming ignorance when there are revelations about questionable decisions affecting an institution does not let a board member off the hook.
In order to be kept up to speed, board members are expected to attend meetings regularly and serve on various committees, including finance, and should be involved in setting compensation for the CEO and approval of big-ticket items.
Even some talented and qualified persons who get appointed to boards are not sure about the role they are required to play. Historically, patronage and political activism dictated board appointments, which, although adding some prestige to the member, required very little contribution from such member. The clear danger here is that educational institutions can be converted into campaign fundraising operations.
MEANINGFUL REFORM
With the best intention in the world, some persons who are appointed to boards are really ignorant and it’s this lack of understanding of the job, we believe, that contributes to dysfunctional boards and rogue decisions by CEOs. Boards do not exist to rubber-stamp the agenda of the administrators. There is a kind of dynamic at play in boardrooms for which there is no parallel outside. Egos, connections, special interests, authority and power can all be factors contributing to the boardroom dynamics.
Wide-ranging scandals in both the public and private sectors over the years, prompted review of board appointment policies, in that, more detailed information is now required of board members to determine whether prospective members meet the “fit and proper” criterion. Is that enough, though?
We believe recent board resignations of the institutions mentioned above open up an opportunity for meaningful reform in these institutions to create better policies to govern the appointment and actions of boards, thereby setting new board members on the correct path.
First and foremost, there should be an orientation process to spell out to board members their role and responsibility. Also, it is important that the board has a policy in place to address matters of conflict of interest, because this is the channel for corruption to creep into boardrooms.
By and large, we have been too complacent about those who seek to violate public trust. Jamaica needs to cultivate stronger governance policies within the public sector, because we have seen how weak and inept boards have undermined credibility and scarred institutions.