LAHORE: The boards of directors (BoDs) of some state-owned power sector companies are flouting corporate governance rules-2013 by indulging in day-to-day affairs required to be handled by the executives under the law.
The situation is worst at the National Transmission and Despatch Company (NTDC) — the country’s premier entity handling power evacuation, high-powered transmission lines and grids system.
“Most of the executive powers are being used by the boards in NTDC and power distribution companies (Discos) allegedly in violation of the public sector companies (corporate governance) rules, 2013.
“Being ex-officio members, bureaucrats [BoD members] conduct frequent meetings and handle issues like hiring and firing. For each meeting they charge fee, TA/DA and use official vehicles unnecessarily, etc,” deplores an official source.
“In fact, they [bureaucrats] are controlling BoDs and taking decisions related to day-to-day affairs of the companies after succeeding in getting people of their choice inducted into the boards,” he added.
Under the corporate governance rules 2013, chairmen of the boards are required to ensure that all the directors are encouraged to fully participate in the deliberations and decisions of the boards.
“The chairman shall not be involved in day-to-day operations of the public sector companies,” reads section 4 of the CG rules. But, contrary to these rules, the boards are issuing directions in affairs related to service matters, hiring/firing, etc.
“The BoD in its meeting held on February 17, 2021 has decided and approved that the service matters pertaining to the deputy managing directors, c-suite and general managers positions (recruitment and appointment, promotions, internal transfers and postings including stopgap arrangements, additional charge, current charge, deputation, salary, perks and benefits) shall be decided by the BoD,” reads an NTDC letter issued by the then GM (HR).
On September 23, the company in another notification said: “The NTDC BoD in its meeting on Sept 22 has unanimously resolved and approved to assign the look-after charge for the post of GM (HR) Dr Naveed Ahmad Faraz, Deputy Manger, purely on temporary basis with immediate effect till further orders in addition to his own duties.”
Similarly, the NTDC management accepted resignation of the GM (HR), who was reportedly forced to resign allegedly by the BoD after the former resisted giving a clean chit to an officer who was charged with corruption in an inquiry.
Under the rules, the boards are responsible for the management of the companies and for its procedures in financial and other matters, subject to the oversight and directions of the boards in accordance with the ordinance.
The Power Division’s additional secretary was not available for comments. It is pertinent to mention that the Senate Standing Committee on Power also reprimanded the relevant ministry over the appointment of 42 former officials of K-Electric as chairmen and members of BoDs in most of the Discos despite the ministry earlier calling the officials incompetent to hold such positions.
Published in Dawn, October 11th, 2021