Editorial | More board blunders

Jamaica is not short on examples of the negative effects of patronage appointments to public-sector boards. Many high-profile boards have fallen by the wayside because of members’ failure to carry out their fiduciary duties and provide effective oversight.

Two standouts among them are the National Housing Trust and the Petroleum Corporation of Jamaica. Now the Students’ Loan Bureau is under the microscope for poor decisions, indicating that no lessons have been learnt from previous fallouts. In this case, we applaud Minister Dr Nigel Clarke for the unprecedented step of immediate remedial action.

Traditionally, it has been the practice that politicians name appointees to serve on boards that fall within their portfolio when they are appointed ministers of government. Appointees are volunteers who have term limits and who serve at the pleasure of the relevant minister of government.

Increasingly, too, we see where failed political candidates without the requisite qualification are being tapped to head important public-sector agencies. It is wrong when the People’s National Party does it. It is wrong when the Jamaica Labour Party does it, and it should come to an end.

Ethical and efficient

The expectation is that persons called to serve on boards, commissions, or foundations would possess the requisite credentials, experience, and qualifications that would make them assets in overseeing the proper running of these entities. By accepting their appointments, the members are indicating that they understand their responsibility to act in good faith to be ethical, transparent, and efficient.

Recently, additional requirements for board membership from the various regulatory authorities seemed to be sending a signal that membership comes with great responsibility and liability.

But we have come to realise that this may not happen in practice. There appears to be no specific qualification for service on these boards and commissions, and members are rarely scrutinised by the public.

Campaign donors and party loyalists are often the ones rewarded, robbing the organisation of a matrix of skills, experience, and backgrounds, which would add valuable diversity to the board. Some board appointments add significant clout and are highly regarded, for they hold the promise of lucrative contracts, and offer opportunities for influence peddling, which is why they are colloquially termed ‘fish head’ boards.

Managing conflicts

We submit that in the world of business, conflicts may arise, but they should be managed appropriately. For example, there ought to be a clearly articulated and documented conflict-of-interest policy statement. When these conflicts arise, they ought to be properly documented and abstentions recorded as a way of managing potential conflicts.

Many who have a genuine interest to serve and whose appointments are merit-based sometimes have no experience in how a board member should function. Although well-intentioned, their ignorance could well lead to ineffectiveness on the board.

These greenhorns need to have a thorough orientation. They should be briefed on the mandate of the organisation and given insights into how it is run, and be reminded of their liability for failing to perform.

For even though there may be no specific qualification for appointment, there are specific legal requirements for board membership, including demanding good financial stewardship.

What will it take for Jamaica to establish a fully independent appointments committee to ensure that qualified, diverse, non-partisan individuals are selected for these important assignments in the public sector?

The practice of rewarding loyalists and donors will continue, we surmise, until the will is found to fix the way we pay for funding political campaigns, bearing in mind that the continued reliance on private money comes with a price.