Governance vs Performance in SoBE’s


By governance I mean good governance as a process as an attitude and as a mechanism to do business. Specifically, this relates to concerns raised during discussions with state owned business enterprises (SoBE) on how public institutions should conduct public affairs and manage public resources for the benefit of the country. This write up centers around the need for the government and governing bodies to improve governance aspects to meet the needs of its people as opposed to looking after the wants of a select group in society.

In Sri Lanka, public sector plays a significant role in economic growth and contributes a major portion to GDP. As a result public sector also consumes a significant portion of resources and due to bad practices, waste is also very high. Good governance in the public sector can encourage the efficient use of resources, strengthen accountability for the effective use of those resources. Transparency in managing resources will improve confidence in those organizations, lead to efficient and effective management practices and thereby contribute to improving peoples’ lives.
However, transparency, integrity and accountability are not norms in many public enterprises. Many can relate to the several negative comments heard about Boards of many government bodies, as listed below;
↗️ Political stooges with no knowledge of business are appointed to Boards as a favour.
↗️ Every time the minister changes, a new chairman is appointed to SoBE without any evaluation
↗️ Persons are appointed to positions to enable politicians to collect their harvest(?)
↗️ Management is capable of serving the public but those at the top are interested in making money for themselves.
↗️ When management follows rules and does something, those above will stop that to the detriment of the organization and the society.
↗️ When the Board does not see personal benefit, they use good governance as an excuse to delay or defer the decision.
↗️ As the Board is incapable of making decisions, performance is affected due to significant delays in decision making.
↗️ Timeliness of decisions is not considered, due to the fear of being blamed later.

Reducing such negative impressions of pubic sector boards is key to making them great. Aspects of governance in the public sector have been addressed by the Committee on Standards in Public Life (the Nolan Committee (U.K.)), the first report of which was published in May 1995. The report (the Nolan report) identified and defined seven general principles of conduct that should underpin public life, and recommended that all public sector entities should draw up codes of conduct incorporating these principles. These “principles of public life” are:
* selflessness;
* integrity;
* objectivity;
* accountability;
* openness;
* honesty; and
* leadership.
These principles along with the purpose of achieving transparency and effective use of resources for social benefit should balance governance and performance in state owned enterprises, through good structures, policies and procedures. Over a period such good governance practices will lead to better performance.


About surenraj

“Views expressed are my own”
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