Permanent 'superboard' planned to supervise state enterprises

[webfact]

Permanent 'superboard' planned
Achara Deboonme
The Nation


Bandid

Independent organisation could be tasked with overseeing state enterprises

BANGKOK: -- Thailand's reformers are envisaging a permanent "superboard" to supervise state enterprises, a key part of the administrative branch, which is experiencing deterioration in governance, posing great risks to the country's competitiveness.

According to Bandid Nijathaworn, president and chief executive of the Thai Institute of Directors, who is advising the current junta-initiated superboard, there is talk of the establishment of an independent organisation that specifically oversees state enterprises.

Unlike the State Enterprise Policy Office, which would be reassigned to concentrate its oversight on operations, the new establishment would focus on policy planning and execution. Its main task would be to block political interference, which has been blamed for past failures of several state enterprises.

"Unlike the superboard, this new organisation would be set up with a clear strategy," Bandid said, adding that legislation for its establishment should be enacted soon as part of the junta's reform agenda. "This government is biased towards public-sector reforms."

Several state enterprises, particularly financial ones, have been used as tools to carry out political campaigns regardless of possible losses and possible conflicts with their main purposes. They have experienced frequent changes at the top level because of political intervention.

Ideally, ministries will have no direct control over state enterprises. All policies will be given to the new body, which will evaluate whether the policies are in compliance with the state enterprises' mandates.

The new organisation will also have oversight on directors' appointments. All will then have to work according to a key performance index, allowing the state enterprises to improve their governance practices.

Should any state enterprise agree to implement a policy that could incur losses, the government must shoulder those losses. Likewise, if the government wants them to offer products cheaper than market rates, it must shoulder the subsidies.

Aside from the Office of the Auditor-General, outside auditors will also be brought in.

Bandid noted that state enterprises could not be assessed only through financial aspects, given that many were assigned tasks that contradict their mandates. Corporate governance (CG) practices widely adopted by listed companies should be deployed to ensure transparency, disclosure, and checks and balances among these enterprises.

"All directors must be accountable, for example to shareholders' rights," he said.

According to the World Economic Forum Competitive Ranking 2014-2015, Thailand's overall competitiveness improved six notches to 31st. However, in the public-institutions sub-pillar, Thailand was ranked 93rd. "Considerable challenges remain in other areas: first and foremost these relate to governance," the report said.

Bandid noted that governance in the administrative branch - consisting of the government, state enterprises and local governments - had deteriorated in the past 10 years, against the continued improvement in the private sector. The reasons for this are the patronage system, weak law enforcement, and poor checks and balances.

"Thailand is full of potential. But this deterioration causes three disadvantages. We have lost opportunities to accomplish something accomplishable. Some projects entail excessive costs. People are wrongly motivated," he said.

For the country's sake, he urged all to focus on three things in future election campaigns - corruption, competitiveness, and sovereign ratings.

"CG involves behaviour. It's not a luxury that we should possess only when we can afford it. It's now the global competitiveness factor," he noted.

From his perspective, in this interconnected world, the costs of doing business - whether financial, labour-related or technological - have been brought to quite the same level. Only CG and innovation would differentiate the attractiveness of countries.

"I'm convinced that CG will be the tool to pull Thailand out of the middle-income trap," he concluded.

Source: http://www.nationmultimedia.com/business/Permanent-superboard-planned-30250856.html


-- The Nation 2014-12-29

[NongKhaiKid]

Independent and blocking political interference !

What here ? Good luck with that which will start with who appoints the members.

[canuckamuck]

Just another mouth to feed, this time it's a super mouth.

[rametindallas]

"All policies will be given to the new body, which will evaluate whether the policies are in compliance with the state enterprises' mandates.

The new organisation will also have oversight on directors' appointments. All will then have to work according to a key performance index, allowing the state enterprises to improve their governance practices.
Should any state enterprise agree to implement a policy that could incur losses, the government must shoulder those losses. Likewise, if the government wants them to offer products cheaper than market rates, it must shoulder the subsidies.
Aside from the Office of the Auditor-General, outside auditors will also be brought in.
Bandid noted that state enterprises could not be assessed only through financial aspects, given that many were assigned tasks that contradict their mandates. Corporate governance (CG) practices widely adopted by listed companies should be deployed to ensure transparency, disclosure, and checks and balances among these enterprises."

So this new 'superboard' will act as a clearing house and watchdog with experts brought in make the enterprises accountable. As of now, state enterprises are little fiefdoms and can make their crooked deals directly with individuals or corporations. Now this nosy 'superboard' will be looking over their shoulder, telling them what they can and can't do, and auditing their books. This is not 'how it's done' in Thailand.

The SRT will be the biggest test.

[worgeordie]

I am sure it will be filled with ex Generals,ex Admirals,

and ex what ever you call high ups in air force.

regards Worgeordie

[ChrisY1]

Oh good.......a Superboard to extract truth, transparency and donations!!

[yellowboat]

The word "permanent" is a huge worry.

Also, it seems that the board will be a Thai only club. They are not excited by new blood or outsiders in Thailand. It should be open to anyone who can have a positive influence. Also, if competitiveness slips, the board members should be replaced.

[Lupatria]

Sounds like a super trough to me. I just wonder how much the membership fee is.

[Anthony5]

So they were right when they said a few days ago that it wasn't true that they want to extend the NCPO indefinitely.................it will now be called NSBO

[Baerboxer]

I am sure it will be filled with ex Generals,ex Admirals,

and ex what ever you call high ups in air force.

regards Worgeordie

Air Marshals.

Don't forget all the ex-CEO's (who failed originally), academics and socially elite.

Jobs for the boys and gals.

[Thai at Heart]

So how to reconcile this with policies and discounts given to state employees.

Plenty of loss making state escapades, but will this super committee bother to remove benefits to.state employees

If the committee did its job, it would start slashing state payrolls to raise efficiency and reduce costs.

[rickirs]

"This government is biased towards public-sector reforms."

This government seems also biased towards irrational economic common sense. If it wants these state businesses to be fully accountable to the shareholders, then make them fully owned by the shareholders with NO STATE OWNERSHIP. Then it doesn't need any superboard. The sale proceeds from state ownership can then be invested in the nation's infrastructure to help grow the economy instead of borrowing the funds.

[Briggsy]

"This government is biased towards public-sector reforms."

This government seems also biased towards irrational economic common sense. If it wants these state businesses to be fully accountable to the shareholders, then make them fully owned by the shareholders with NO STATE OWNERSHIP. Then it doesn't need any superboard. The sale proceeds from state ownership can then be invested in the nation's infrastructure to help grow the economy instead of borrowing the funds.

Nice idea but. This will never happen here. At least not in my lifetime.

[tominbkk]

More accurate if you put an 'o' at the end of his name.

[ikke]

So they were right when they said a few days ago that it wasn't true that they want to extend the NCPO indefinitely.................it will now be called NSBO

Which was already an extension of the PDRC

[timewilltell]

All these ideas great if you accept Thailand needs State Enterprises which it probably does given its current stage of development. But it is the corruption in implementation that destroys every good idea and there is still no clear proof that there is any serious attempt to tackle it. So the cause is lost.