Karu says lack of good governance killing public enterprises

As the economy continues to fall victim to nepotism, which taxes the nation in terms of income and productivity, Speaker of Parliament Karu Jayasuriya this week stressed the need to do away with the corrupt practice, so that the public enterprises can be revived from their inefficient status.

Referring to the frequent occurring of political appointments to the
director boards of public enterprises, the speaker stated such developments remain an area of serious concern and said steps are being taken to address the same.

“There continues to be a lack in the professional management of public enterprises.

There have been many political appointments at top levels. We have always maintained that the boards of directors and chairmen should be professionals and not friends and family. This is needed to run the place efficiently,” said Jayasuriya, addressing a forum on good governance in public enterprises in Colombo.

He added that it must be ensured that the chairmen and those sitting on the boards are dynamic people, who are well-versed on the enterprise, industry and its market, as it is they who will be responsible for a successful operation.

Attributing the mismanagement of public enterprises to the poor selection of heads, Jayasuriya highlighted that the Parliamentary Committee on Public Enterprises (COPE) in its recent reports to parliament has noted a number of serious concerns, which require immediate action.

The concerns include lack of transparency and accountability, lack of professional management of public enterprises, financial indiscipline, irregularities, manipulations and malpractices, including large-scale frauds and corporate failures, ineffective progress review and performance monitoring, ineffective internal controls, risk management practices and audit and inadequate disclosures in financial reporting, among others.

To mitigate such issues, Jayasuriya said the director boards of public enterprises must be able to interact with all stakeholders.

“They must make sure that sufficient time is spent to deliberate on board papers, especially those in relation to specific development projects and related activities, so that timely implementation of such projects is assured,” he pointed out.

Jayasuriya also stressed that the director boards must seek to ensure the financial viability of the enterprise, collectively direct the affairs, monitor and control the executive management, meet the stakeholder interests and most importantly ensure moral and ethical commitment in areas such as bribery and corruption.

Furthermore, as the custodians of public resources, Jayasuriya said the director boards should exercise their mandated rights and responsibilities with integrity and in good faith, within the legal and regulatory framework governing the public enterprises under the directions and control of the minister and Finance Ministry or Treasury (Public Enterprises Department) under the direct supervision of the line ministry.