Board director cuts to save $1 million in fees

The Government plans to significantly reduce the number of directors on Government boards, a cutback that is expected to save an estimated $1 million tala a year in directors' fees each year. 

The Government currently spends $3.6 million on director fees per annum.

In legislation to be tabled before Parliament, the size of the average Government board will be reduced from seven to five across all 27 Government agency boards. 

The total reduction of 54 directors is forecast to reduce Government expenditure on directors' allowances by some $1 million tala each year. 

The compensation for a Government Board director is currently $18,500 a year. A chairman receives $22,500. 

The Ministry of Public Enterprises oversees all agencies' Boards. 

According to the proposed bill that’s tabled in Parliament, it seeks to amend various legislation establishing public trading bodies and public beneficial bodies.

“The objects of the Bill are [to]: (a) to reduce the number of membership of Boards to be not less than three (3) and not more than five (5) members," the legislation read. 

"[The legislation is also designed to (b)] to allow Chief Executive Officers of all Public Bodies to [serve as] ex-officio of their Boards; (c) to allow discretion of Cabinet to appoint a Chief Executive Officer of a Government Ministry or a Public Body to become a director or an ex-officio on the Board of Director of a Public Body.” 

To date it is unclear as to what prompted the move to cut back on board members. 

Earlier this year, the M.P.E. put a stop to the end-of-year bonuses for Boards following a controversy following revelations that $25,000 Christmas gifts were given to a Minister and board members of one Government agency, according to an Auditor's report first revealed by the Samoa Observer. 

"Directors are not entitled to nor should expect the payment of any end of year bonus for their services,” the new guidelines state. 

According to the Ministry for Public Enterprises C.E.O., Elita To’oala, the handbook was drafted after the bonus payments were made. 

“The Handbook was developed in 2018, published in July 2019 and posted on the Ministry’s website on the 7 August, 2019,” she said at the time.

The C.E.O. cautioned that directors are not entitled to any bonuses, just annual directors' fees. 

The purpose of the handbook is to provide guidance to directors about the expectations for standards of Governance of a public body.

The handbook says directors' fees are to be paid for services provided. Directors are expected to attend all Board meetings and actively contribute to work of the Board. 

The handbook also prohibits advance payments of directors' sitting fees.

“Directors are not entitled to any other form of financial reward for carrying out the duties expected of them as Board members," the guidelines read. 

“Any accommodation, transport or meal expenses associated with project reviews, site inspections and other Board approved events are to be paid by the Public Body directly to the service provider. 

"The same principle applies to overseas promotional activities and meetings unless there is a Cabinet directive stating otherwise."

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