SOEs: Salaries of CEOs, board members should be tied to performance – Economist
An Associate Professor with the University of Ghana Business School [UGBS], Lord Mensah, is urging the government to tie salaries of CEOs and board members to the performance of various state owned entities.
His comment comes at the back of the direct losses incurred by some SOEs in 2020.
In terms revenue losses, SOEs recorded some GHS 2.61bn losses in the year under review.
The recorded loses for 2020 represents a 49.2 percent improvement on the 2019 aggregate net loss of GHS 5.16bn.
He added that it is about time the country developed a corporate governance framework for the SOEs, which will allow for oversight responsibilities by the Parliament.
Speaking in an interview, Prof. Mensah indicated that CEOs and managers of the various SEOs need to stop giving excuses to losses incurred.
‘’For me I think, with the SOEs we have a lot of work to do in that area. We need to put down measures that will require those who are appointed be it the CEOs, board, some benchmarks and possibly look at how we can even tie their salaries. I know most of them are taking more than 5 digits figures, you know, when it comes to salary compensation. And so lets look at all this things, tie your performance with some of these indicators and stop giving excuses like the environment has not given provisions for it’’.
‘’It’s about time we sit back as a country, develop some kind of corporate governance framework, for our state owned institutions and ensure that they go by it and they stick to it and look at possibly the parliament oversight on some of this state owned institutions. Lets compare, if you look at parliament, some of the things that are being done by the state, it goes through parliament for approval, but why is it that at the state level, the state owned institutions level, we don’t ensure that there is a balance when it comes to political divide, when it comes to the appointment of the board of those various state owned institutions’’, he added.
Meanwhile, Executive Director of the Policy Initiative for Economic Development, Dr. Daniel Amatey Anim, has urged government to set targets for state owned enterprises if they are to become profitable.
He noted that lack of set targets plus effective monitoring and evaluation is a menace to growth for most of the state institutions.
He added that if government allows the SOEs to operate independently, without their support, the SOEs will live up to expectations.
“I’m of the view that if we should have targets set for them and those targets are being monitored closely, they can live up to expectations and so basically they are making losses because they know at the end of the year there will be interventions from government,” said.
“But if they are allowed to generate their own revenue and to support their own budget and even make some revenue for the state, I’m of the view that they will do right thing and be able to make more revenue for the state. So principally because these measures, these mechanisms are not in place, that is the reason why most of our SOEs are not doing well,” he said.
Aggregate revenue outturn from State Owned Enterprises (SOEs) to government for the 2020 review period amounted to GHS 45.23bn.
