PPP effort launches Good Governance Handbook for State enterprises

A successful implementation of a Public Private Partnership (PPP) effort was witnessed recently with the launch of a Good Governance Handbook that aims at curbing inefficiencies and malpractices prevailing in State enterprises.

CA Sri Lanka together with the National Human Resource Development Council (NHRDC) made available this week the ‘Handbook on Good Governance for Chairmen and Board of Directors of Public Enterprises’. The book was launched at an event in Colombo graced by Speaker of Parliament Karu Jayasuriya and World Bank Country Director for Sri Lanka and Maldives Idah Pswarayi-riddihough.

The guideline was launched following the repeated concerns being expressed by various parties with regard to the current management approach and practices of public enterprises. The document aims at assisting the Chairmen and Directors serving on the Boards of Public Enterprises in carrying out their duties effectively, in a manner that assures transparency and accountability.

The collaborative effort was executed under the direction of Prime Minister Ranil Wickremesinghe and was developed by updating the existing guide with the assistance from CA Sri Lanka, SLID, Public Enterprises department of the Treasury, Ministry of Public Enterprises Development, Ministry of National Policy and Economic Affairs, Securities and Exchange Commission (SEC) and Central Bank of Sri Lanka (CBSL).

The 99-page document includes salient features and key provisions of relevant statutes and is expected to serve as a reference guide for the chairman and the Board of Directors of State enterprises. While it is mainly applicable to commercial public enterprises, it was stressed that other statutory bodies are also encouraged to adhere to the same.

The handbook spells out in detail the role of Board of Directors, Chairman, Company Secretary, Chief Executive Officer and Senior Management. It also elaborates on areas such as government policy on public enterprises, regulatory framework governing public enterprises, reform initiatives of the present government, need for improving governance in public enterprises, corporate governance, financial management and control systems, accountability and audit, auditing and oversight functions, audit committee, statutory duties of the directors in terms of the Companies Act, how to be an effective member of the Board, and lessons learned from the recent global financial crises.

Following the official launch, it was said that it is expected of the Director General Public Enterprise Development to issue a circular to facilitate the immediate implementation to make the governing Board more transparent and accountable.

Public Enterprises in Sri Lanka, numbering over 250, refer to entities incorporated under Acts of Parliament, including Companies Act, where the government holds 50 percent interest or more either directly or indirectly. It includes commercial and noncommercial public corporations, fully owned government companies, subsidiaries of public corporations and government owned companies.

It is highlighted that under the ‘new definition’ for public enterprises, which is: ‘Enterprises owned and controlled by the government which generates most of their income from sales in the market rather than depending on the government budget’, demanded is commercial viability through effective management of resources free from budgetary support to contribute to the national economy.