House Approves Regulations To Improve Corporate Governance Of Public Bodies

The Public Bodies Management and Accountability (Nomination, Selection and Appointment to Boards) Regulations was approved in the House of Representatives on December 7.

Piloting the legislation, Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, said the Regulations represents a seminal tool towards achieving good corporate governance in respect of public bodies.

There are approximately 146 public bodies in Jamaica, which are responsible for significant resources.  In addition, there are 54 self-financing public bodies that have revenues that exceed $325 billion per year.

“So, public bodies have significant responsibilities. With this level of revenues and this level of capital expenditures, public bodies have significant procurement and contracting responsibilities. We depend on the Boards of public bodies for governance and stewardship that oversees the preparation of their budgets and their corporate plans and the achievement of public policy objectives,” Dr. Clarke said.

He added that failures in governance, therefore, can have grave consequences.

“The regulations are not perfect, they represent a work in progress towards a more perfect system of governance,” Dr. Clarke argued.

He informed that the Financial Secretary will be responsible for the creation of a database of prospective Directors.

“This is pivotal towards meeting the need for transparency in the selection and appointment of prospective directors. Information contained in this database, such as the name, the knowledge, the skills and experience of prospective directors will be subject to due diligence check to determine the veracity of the information,” Dr. Clarke informed.

This database will be established within the Ministry of Finance and the Public Service and will be an electronic system. Appropriate staff will be recruited and designated to carry out the duties related to the administration of the provisions of the regulations.

Dr. Clarke said the Financial Secretary will have ultimate responsibility for the administration of the database, adding that the database should be kept in a secure, reliable facility.

He noted that any member of the public may have access to the information, through a request in writing to the financial secretary, but this will be limited to only current directors.

Dr. Clarke informed that a person may be included in the database by nomination by certain interest groups, but this will be subjected to due diligence.

“But it’s not limited to groups such as professional bodies, business associations, trade unions, public-sector agencies representing special interest groups, such as gender affairs, children, youth, consumer affairs and the disabled community,” he stated.

“So, not only can people nominate themselves, but professional bodies can put names forward and provide the competencies. What happens, and what has happened over the past several decades, is that public bodies boards are constituted from the minds and the rolodex of the particular minister, and that is a limited basis on which one can be nominated to a board,” the Minister added.

Persons can also be nominated by political parties registered under the Representation of the People’s Act, members of academic communities, and civil society groups.

“This provision demonstrates our commitment to a participatory form of government, to inclusiveness and diversity and highlights the government’s recognition of the need to have a wide cross section of Jamaicans involved and represented in important decision-making towards growth and development of Jamaica,” Dr. Clarke said.

He noted that being in the database “doesn’t mean that you’re automatically on the public body board, you’d have to be selected from the database and then appointed”.

The Minister said each board will have a competency profile that outlines the core competencies required.

“The selection procedure will require the financial secretary to prepare a list of all eligible prospective directors from the database who meet the competency profile for the respective boards,” he stated.

Meanwhile, the Regulations do not apply to the boards of educational institutions, and they do not apply to ex officio members of boards, who are persons, by virtue of their office, named to be appointed to the boards of public bodies.

Both Leader of the Opposition, Mark Golding and Opposition Spokesperson on Finance, Julian Robinson, supported the legislation.