Amongst the many issues under discussion, the public and the politicians both consider that public sector enterprises (PSEs) cannot run as usual and the only solution to the current woes is through implementation of a stringent process of reform.
The Pakistan Business Council comprising of nearly all of the Pakistani and foreign corporate sector (operating in Pakistan) through its expensive and colored advertisements has also resolved to reform and re-structure the PSEs, starting with the transparent appointment of capable/professional top management and (professional) BoDs, which are (then) empowered to take the necessary steps (to take the PSEs out of their morass). On the other hand, everybody but primarily the MLDAs, consider that the first step would be the notification of fully empowered professional board of directors for the PSEs, which in turn would select the CEOs and then oversee the operations on behalf of the GoP.
The BODs are then envisaged to act as firewalls against possible political and administrative intervention - primarily, from the federal ministries concerned. That the composition of the existing BoDs could be upto mark and that these could carry on, if provided the required support and independence, has never been considered as important and in all probability has not been looked into at all. This is so because the current abysmal performance of the PSEs is wrongly attributed just to the existing BoDs.
Accepting the above solution, the most important question that agitates the discerning mind is as to what should be the composition of the new BoDs. In order to come up with an answer, it will be appropriate to delve into the present working of the PSEs and particularly the Power Sector Corporatized Entities (PSCEs). More so, when the power sector and its operations have a deep impact on the economy and even on the day to day life of the common citizens. That the GOP has since notified the new BODs of at least the NTDC and the DISCOs (ten of the companies amongst the fourteen under the to be soon dissolved PEPCO's umbrella) hastens the requirement for an in-depth analysis.
A little scrutiny reveals that the power sector is facing the worst of its crisis. So much so, that it is basically not able to recover its cost of service (as determined by NEPRA) and is haemorrhaging every day. Unfortunately, the cost of service has been blown out of proportions because of the negative generation, fuel and customer mix. The sector further faces even greater issues of depleted human resources, capacity shortfalls, inability to stop wastage and adopt conservation as the way of life, lack of investments for renewals and replacements, extremely poor customer discipline, a large population indulging in illegal abstraction of energy, lack of bills payment culture, conflicting demands of various areas of the country, a serious disconnect between the expectations of the public being served and the service being offered and lastly a clear cut lack of co-ordination between the various arms of the government. Consequently, besides arranging for the desired level of managerial oversight, the new boards must bring in expertise and qualifications that are needed to counter and then mitigate the above ten areas of conflict.
How do we come up with these core competences for the professional BODs? Simply speaking, it will depend upon listing of gaps in the present proficiency of the PSCEs. Considering the ten areas of conflict listed in the earlier paragraphs and converting these into distinct core competencies, we see that presently the PSCEs are deficient in corporate and regulatory affairs, legal expertise, accounts and finance, audit and operational oversight, public sector management (completely different from the private sector), media and public relations, induction of new technologies (surely needing the appointment of chief technology officers in the companies), human resource development, including training and lastly in the realm of change management. As the BODs of the PSCEs have to be nominated and not elected, the GOP should nominate only those persons whose core competences pertain to the above listed nine facets. It has to be assured that there are no half-baked or inexperienced flunkies on board, that there are no wannabe Ralh Naders or Al Gores and lastly that the nominations do not reek of nepotism.
Additionally, gender balance should not be considered as any over-riding feature-rather, is to be considered only in case the required expertise is available through the balancing act. The nominees should then possess the right level of hands down experience, should have served at the top or reached the top slots, have the educational depth and the commitment to serve. There has to be no conflict of interest (nominations from consultancies should thus be shunned); the nominees should necessarily add on to the existing expertise of the company resource etc. Incidentally, generic compositions or copy book suggestions will not work for the PSCEs.
Additionally, another issue that needs deliberation would be the penchant of certain quarters to nominate academicians on the boards. This may be beneficial in case of the developed world where academia and the industry operate in tandem, but it is nearly infructous in the local context where a great disconnect is evident between these two distinct and as yet separate areas. Consequently, in the Pakistani context, baring a few exceptions which do not make or break the rule, academicians normally will not be able to support the working of PSCEs and rather would enter into the learning mode thus putting more burden on the already burdened companies. At the best, the academicians can bring in some dignity which may not be the goal alone. Similarly, representatives of NGOs (completely busy in pursuit of their own agenda that could attract funding for them) would also not be able to add on to the expertise of the particular company.
Chairpersons of various chambers representing commerce and industry and agriculturalists, on the other hand, are most welcome; not for their expertise, but for the fact that they represent sectors that are greatly effected by the power sector. Such nominees can also represent the general customer. On the other hand, in case the above basic requirements are not met, then surely the very idea of having new boards will be frustrated. And the poverty of expertise being already felt by the PSCEs will further aggravate. Actually, in this case the situation would be akin to the capture of the whole scene by interested parties surely leading to catastrophic results.
Further explaining the subject matter, it is seen that the above list of core competencies would easily set the standards for nomination of the BoDs for the public sector enterprises and especially the power sector companies. This standard can then be used to scrutinise the nominations made by the authorities concerned and also propagated/released to the press lately. In case, the nominations have the required core competencies to their credit and that too of the highest possible level, then the BODs are in order, otherwise more scrutiny would have to be undertaken.
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