What exactly happens at State Boards when Governments change and what can be done to assist in a smooth transition. Tonight CEO of The 12 year-old Caribbean Corporate Governance Institute Kamla Rampersad de Silva breaks it down with our journalist Urvashi Tiwari Roopnarine.
00:00Well, the transition has started. Let's just leave it at that. But we have so many state boards, some holy state boards and some of which government may have a representative on the board. What's going on from your experience at those institutions now?
00:16Well, definitely when there is a change in government, a lot of directors of state enterprises do consider what is their next action. This is because primarily the Westminster system of government has been one where for the last century, when governments change, it means that all state boards generally do change directors as well.
00:42However, this practice is not written in legislation anywhere. I would say it's not even the full practice as we would term a practice here in Trinidad and Tobago, because we do have instances where there are directors who have served through different administrations.
01:00So I would say we should remind directors that their duty when they are appointed to a board is to the best interest of that organization. And you would find that not all state organizations are equal.
01:14There are some that can function in the short term without a fully functioning board, but there are some where the board is critical. And so those directors need to consider what would be the implications of their move before they determine their next step.
01:32Is it the ethical thing to do to submit your resignation if it's accepted or if the incoming government wants to keep you, then you remain in place or do you remain in place until told we're going to replace you? That's it. What is the proper thing to do?
01:50I think that if I think that if I were a director on a state board, I would want to first assess the impact of the organization if I were to resign.
02:04But generally what I would recommend is for persons to remain in their position and but offer their resignation to the line minister or in this case, whichever organization would have appointed them because some state boards, the directors are appointed by Corporation Soul, some it's by the line ministry.
02:31So it does depend your instrument of appointment, it usually would indicate to the process of resignation, but it while we would like very much for the new government to consider continuity, and therefore, all directors need to also consider continuity.
02:52We are not saying that directors should not resign so as to prevent the new government from putting persons in place. After all, government usually comes in with a mandate from the electorate, the policies that they wish to follow to deliver on that mandate.
03:14They would want persons who understand and support that policy, but for the most part, what we're looking at is stability and continuity, and not every director is really politically affiliated, which is a good thing.
03:31A lot of times, a lot of times we have directors who are very, very objective, impartial, neutral, you know, who really look at their role as a director for the specific state organization.
03:46And that is what we would recommend that every director, in fact, whether you are appointed, if you have a political affiliation or not, once appointed, your duty as a director is the interest of the organization.
04:00And one of the things that would be useful is for the government to ensure that there is training for all directors, not take it for granted that even the ones who are currently serving, no one understand the role and function of the board.
04:17Because oftentimes, directors, especially in state enterprises, get appointed to these positions.
04:23It's their first time as a director, and they really don't understand the role of the board.
04:29And if you would explain to us the big why, why is it, I mean, aside from the directors being perceived as political appointees, why would an incoming government want, quote unquote, their people in these positions?
04:46Why?
04:48Well, you know, let's accept that in the past, there has always been this issue of political patronage.
04:54It is the reality that sometimes the party that is now in power may wish to reward its supporters.
05:06And some of the ways in which they do that is through appointment to state boards.
05:10But we would like very much for the new government to think deeply about that.
05:18You can have persons who are politically affiliated, but who can bring competence and who can bring a lot of character even to that boardroom.
05:31So what you may want is to ensure that the promises made on the campaign trail are delivered.
05:40And therefore, you want to ensure that directors on state enterprises, because these state enterprises are a tremendous vehicle for delivering on a lot of those mandates.
05:52And that is why they may want persons who will agree with their policies and their mandate, and therefore persons who openly will demonstrate that support.
06:04It's a very fine line, though, to ensure that directors understand that although they may be appointed by the party in power, it's not politics.
06:16It's really about achieving the mandate of the organization and serving to the best of their ability.
06:21But is it that governments, incoming governments, will just assume that those who were appointed under a previous government will offer them some level of resistance to the initiatives and policies that they wish to implement?
06:38I think that varies. It varies from person to person.
06:43There are really good examples of directors who have served through several administrations.
06:49Even though some of them may have been political in the past.
06:53Let's take, for example, Mr. Anthony Smart.
06:57Anthony Smart, you may recall from the 1986 government under the NAR, was a politician.
07:04He's a previous attorney general for Trinidad and Tobago under that administration.
07:08But he has served on the Board of First Citizens Bank as a chairman through several administrations.
07:17And so you really can't take a clean sweep and use the same broom on everyone.
07:23You know, you need to assess the situations.
07:26There are some persons who may be very political and who are not in support and therefore can present a problem,
07:35you know, in terms of being able to follow the policies of the new government.
07:40But I would say that that's not a broad brush that you can apply to everyone.
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