Organisation of Public Corporations

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Organisation of Public Corporations

Organisation of Public Corporations
Organisation of Public Corporations

Public Corporations are created by government and are, therefore, responsible to the government through the minister in charge of the corporation’s supervising ministry. That is, a minister has ultimate responsibility for the public corporations in his ministry and he is accountable to the government or legislature for their performance.

In general, the minister is only responsible for the formulation of broad, or generaI policies for the corporations and for providing them with funds. The minister delegates the day today administration of the corporation to board whose members are appointed by himself.

The board, as the highest decision-making organ of the corporation, formulates and implements policies affecting the corporation, awards major contracts and deals with the appointment, promotion and discipline of its senior officials. The board, at least in theory, is unfettered by political or civil service control. In reality, the board is a subject of intense pressure from the government, politicians and the civil service who often interfere in its management. The members of the board themselves are usually appointed by the government and their appointment is based more on patronage than competence. As such, the board members cannot, in all honesty, insulate themselves from partisan influence. The minister may sack the board for non-performance or where public opinion is against it. Perhaps, the greatest problem facing government parastatals in developing countries, like Nigeria, is that the members are generally self-serving and easily kowtow to the wishes of the chief executives of these corporations who dispense a large measure of favour. A board usually has ten to twelve members under the leadership of a Chairman.

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The Managing Director / Director General who is also a member of the board is the head of the management of the enterprise. He handles the routine business of the corporation and implements the board’s decisions as they affect the corporation and its staff. The chief executive is assisted by directors and other management staff in the discharge of his duties. The corporations chief executive may be so powerful that the systems of checks and balances established in the organisation are rendered redundant. This partly accounts for the high rate of corruption in government perutatale. For instance several top officials of the Nigeria Ports Authority were jailed in 2008 for inflation of contracts and corruption. In 2011 the Director General of NIMASA was charged in court by the EFCC for similar offences. In 2009 several top officials of the Nigeria Electricity Regulatory Commission were indicted for corruption.

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The officials of the corporation are public servants and are employees of the corporation. They have security of tenure and can only be removed in accordance with the laid down procedures.

The problem with the board is the difficulty of attracting suitable officials due to such matters as salaries, and image. As such, the commercial freedom of public corporations may be a fiction.


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