Board cutbacks not about cost: M.O.F.

A reduction in the number of directors on Government boards is not about cutting back expenditure but establishing consistency, the head of the Finance Ministry says.

In late December the Samoa Observer reported that the Government was reducing the number of directors serving across the boards of state-owned enterprises (S.O.E.). The move, which, if passed, will affect a total of 27 S.O.E.s and was forecast to save up to $1 million a year in directors' fees. 

But the Chief Executive Officer of the Ministry of Finance, Leasiosiofaasisina Galumalemana Oscar Malielegaoi, denied that the reform was intended to reduce expenditure in an interview with this newspaper. 

The bill, which has been tabled before Parliament, would reduce the size of the average Government board from seven to five. The new regulations would apply to the boards overseeing all 27 Government agencies. 

“We can’t have three board members for one [state-owned enterprise] and five or seven for the other boards," Leasiosio said. 

"For consistency purposes, the number of board directors [has] to be the same across [Government agencies]. 

"It has nothing to do with finances". 

The Government currently spends $3.6 million on director fees each year. 

The total reduction of 54 directors is forecast to reduce this budget by up to $1 million tala each year. 

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

"The numbers will remain as odd numbers given there should be [the possibility of a tied] vote. Revising downwards [...] is the right decision," said Leasiosio. 

The C.E.O. said annual assessments were conducted for state-owned enterprises, a process that is being made independent. 

“They were [until now] a division under [the Ministry of Finance] and they are developing their own [assessment team] and at the same time they’re now experts in their own field," he said. 

"The positive note is that they are able to [promote] efficiencies in their line of work as they are focused on their mandates. Their recent study found there is no need to have seven board members."

Leasiosio said the Government reforms were suited to the times. 

“The reforms will continue to happen while this serves the purpose of today; tomorrow may change but it is a [continuous] process,” explained Leasiosio. 

The Ministry of Public Enterprises oversees all Government agencies' boards. 

The proposed bill tabled in Parliament would 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.” 

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