By Deogratias Mmana
The Statutory Corporations says it is against corporate governance for a Director General of a statutory institutions to nominate members for their boards.
Comptroller of Statutory Corporations Peter Simbani said this to Malawi News Friday.
He was responding to the nomination by Director General for the Malawi Communications Regulatory Authority (Macra), Daud Suleman, who has nominated names for consideration to serve on the Authority’s board.
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According to Simbani, it is the line ministry that is supposed to make the nominations and submit them to the Office of the President and Cabinet for further processing.
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Minister of Information and Digitalization Moses Kunkuyu said Friday that he was not aware of Suleman’s letter to the Comptroller of Statutory Corporations.
Analysts have also been critical of Suleman’s conduct, describing it as an anomaly.
But Suleman has defended the move. He says it is within Macra’s mandate to make a recommendation to the appointing authority.
In a letter dated September 19, 2023 addressed to the Comptroller of Statutory Corporations with reference number MACRA/DG/2/2/11/2, with the headline ‘Motivation for board appointments’, Suleman gives justification for the nominations of the officers who served on the previous board.
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“As your office begins to process the appointment of a new board members of the Authority, allow me to make the following nominations for consideration,” the letter begins and gives the nominations of Stanley Khaila (former board chairperson), Isaac Songea, Malla Kawale, Stella Chuthi, Reverend Father Henry Saindi and Alekeni Menyani.
This is the board whose tenure has expired.
Suleman gives five motivation drivers for the nominations. He says during the tenure of office for the board, the performance of Macra was impressive.
“Performance assessment conducted by your office scored the authority 85 percent. Between 2020 and 2023, the authority’s revenue base has grown by 40 percent, from K17bn to K23bn. Compliance levels of licences, in terms of both licence obligations and levy payments, have grown to 90 percent as of August 2023,” the letter reads.
He also argues that the board developed the reputation and status of Macra to a level of high regard amongst international partners including the International Telecommunication Union which has selected Macra to be one of the 17 centres of excellence and innovation in the world.
He also says the Macra is in the process of redeveloping the legal and regulatory frameworks which seek to align with the current digitalization efforts of the government and the intent of the agenda 2063.
He further argues that there are key regulatory projects that are in progress and will require institutional memory to ensure timely closure. These include Revenue Assurance System, once termed as the “spy machine”, which he says is at implementation stage with all operators aligned and now directly connected to the system for automatic submission of data.
He also cites several projects such as the Central Equipment Identification Registry, broadcasting monitoring systems and refarming the FM band and the National ICT Survey.
“The current membership of the old board has been sufficiently capacitated on issues around telecommunications regulation and digitalization matters. The amount of funds and time spent by Macra in training and exposing the members is quite substantial and we have not fully obtained the value back,” says Suleman in the letter.
He adds: “Consistency and continuity maintaining the past board in the next appointments will ensure that the authority carries on its ongoing projects and exercise without many gaps, which will be valuable to the sector and the digitalization agenda of the government.”
In an interview Friday, Suleman said:
“The confidential letter you have seen, is making a recommendation to the Comptroller. It is within our mandate to make a recommendation to the appointing authority. We are not choosing, we are recommending reasons why we believe the proposed names should be considered.”
He argued that the nominations were in line with governance principles, arguing further that the office of the comptroller works directly with statutory corporations on matters to do with board performance.
“As a controlling officer, I am duty bound on behalf of management to make a recommendation to the controller for their consideration,” he said.
When put to him that it is the line ministry that is supposed to make nominations, Suleman said: “The line ministry can write, but the Communications Act guides on how and who appoints board members; the President through OPC and administratively executed by the Comptroller. Our recommendation to the Comptroller is copied to the Principal Secretary of the ministry for their noting.
“It doesn’t stop the ministry from putting forward their names. We are making a recommendation based on the facts presented on why the board must be retained. No shortcutting the ministry, both lines are open for use,” he said.
But the Comptroller of Statutory Corporations said what Suleman has done is wrong because executive management of Macra or any government company does not have the mandate to take part in the appointment process of board members because that would compromise the work of the board.
Simbani said he made it clear in his communication to controlling officers whose boards were expiring not to consult management for the nominations.
“What has happened there is against corporate government principles. The minister responsible is the one who is supposed to make nominations and submit them to the OPC [Office of President and Cabinet] and that is where my office comes in,” Simbani said.
He added that he will ignore Suleman’s letter.
On his part, Kunkuyu said what he knows is that the Comptroller wrote to his ministry “in line with the law” to make nominations and “my ministry is in the process of complying with that.”
“The Comptroller of Statutory Corporations will be better placed to comment as you say he is the addressee,” Kunkuyu said.
Centre for Human Rights and Rehabilitation Executive Director Michael Kaiyatsa described the development as an anomaly because it is the line ministry that is supposed to submit nominations.
“Essentially it is the role of the board of directors to hire the Director General or renew his contract. Therefore, from a corporate governance perspective he cannot be the one proposing names of members who will have a role in his appointment or reappointment,” Kaiyatsa said.
Another governance expert, Mabvuto Bamusi, also described the move as a serious travesty of corporate governance principles.
“There is a deep conflict of interest on the part of Macra management with a high likelihood of bias in the nominations. Macra is demonstrating managerial imperialism which may later make the Board less powerful and less effective.
“The action by Macra management threatens the independence of the Board. Macra management should be condemned and disciplined for such a travesty and violation of codes of public sector ethics,” Bamusi said.
