The trouble with state boards

PAOLO KERNAHAN

CURIOUS observers could be forgiven for thinking this is the first time a new government had been sworn in. There was a narrative in some news coverage implying that switching out state boards upon a change of government is a previously undescribed political phenomenon.

It’s almost as though some media houses have no institutional memory…or any memory of what happened when the PNM ousted the PP government and regained possession of the seat of governance. That the convention of state boards demitting office needed to be explained by countless homespun scholars on Facebook is one of those head-scratching moments this nation produces prodigiously.

The suggestion from some holdouts that they’d be staying put – doing the Occah Seepaul – was a confusing source of vicarious embarrassment. A state board is a creature of the ruling party; an extension of the governance mandate giving the government a multi-tenacled reach into the vastness of the administrative apparatus.

Embattled board rebels had to know how untenable their positions were, such that they were either provoking a showdown with respective line ministers or they would have to eat their words shortly after having uttered them. Thankfully, the latter option prevailed; better to eat humble pie than have it thrown in your face.

Also introduced were suggestions that board positions should be permanent, immune to the vagaries of electoral politics. The UWI Arthur Lok Jack Global School of Business strongly argued against dissolving state boards, particularly at state-owned enterprises or where the government has a significant shareholding in what is ostensibly a private sector entity.

It’s a compelling case – continuity and execution of a vision for growth and expansion in the interest of those enterprises can, at times, take far longer than the lifespan of an administration. However, the school and others were rightly questioned about their advocacy for retaining boards in 2015. How many spoke as passionately in defence of directors appointed by the PP government?

As the PP was getting ready to go to the polls, I was approached by a businessman interested in a communications campaign to support the coalition. He reasoned that the continuity of the government was crucial to the stability and prosperity of the private sector. A change in government would be like starting from scratch. While that thinking might sound acutely Machiavellian, is it so different from the philosophy of the UWI Arthur Lok Jack Global School of Business – continuity for the sake of market equanimity and confidence?

Lok Jack said that although board appointments can sometimes be “perceived as politically motivated” they should be based on merit, expertise, and in alignment with the company’s strategic goals – not political loyalty. Well, if ifs and buts were squirrels and nuts…

Let us be as clear as puncheon, governments will pick people who are at least sympathetic or indifferent to the ruling party. Inevitably, there will be names chosen based on outright political loyalty because the board is an organ through which the party ticks several boxes. Board seats can be used to reward fealty, cement authority, exert the line minister’s influence and favour, etc.

Consider, if you will, the nature of our society, deeply influenced and divided by politics. Thousands of citizens are self-radicalised political agitators, far more committed to the defence of their party than folks in the executive.

Arthur Lok Jack places a premium on appointing appropriately qualified candidates to state boards. Some of the most qualified, "respected" people in this society subvert their perceived intelligence and credentials in favour of their political faiths. Removing politics from the governance of state boards is like pulling hair out of honey.

It’s also virtually impossible to inoculate these instruments against influence-peddling. Reports of undue influence and incestuous alliances at state-owned enterprises are well documented, with an orgy of feeding among inner-circle business operatives with close ties to the party in power. With billions on the table for the provision of goods and services, state boards are an entirely imperfect mechanism for the execution of the extraordinarily complex task of running a country.

There is no institutional remedy for the problem with state boards. Which government will be the one to break the automatic resignation convention and keep the boards appointed by their political predecessor? That would be like getting remarried and having your ex sleeping at the foot of the bed.

The only answer for a flawed system is the unflinching scrutiny of the media and the willingness of more citizens to champion critical thinking and holding the government and its operatives to account, regardless of their political loyalties.