Before 2004 companies and any other corporate incorporated were regulated by the Companies Act, 61 of 1973.
During 2004, parliament enacted a law called the Companies Act, 28 of 2004 and its purpose was to provide for the incorporation, management and liquidation of companies.
This act defined a director as any person occupying the position of director or alternate director of a company by whatever name that person may be designated.
In terms of the old act, the business and affairs of a company must be managed by or under the direction of its board of directors who has the authority to exercise all of the powers and perform all the functions of the company except to the extent that the act or its articles of association provide otherwise.
There were no state-owned enterprises up until 2006 when parliament enacted a law called Public Enterprises Governance Act, 2 of 2006 as amended by State-owned Enterprises Governance Amendment Act, 5 of 2008 and lastly the Public Enterprises Governance Act, 1 of 2019 which seems to be repealed.
The purpose of the Public Enterprises Act was to make provision for the efficient governance of public enterprises and monitoring their performance, and provide for the powers and functions of the minister of public Enterprises.
In 2022, the Ministry of Public Enterprises was disbanded and since then such power and functions now rest under the minister of finance.
The Public Enterprises Governance Act defines a board as the board of directors of public enterprises, by whatever name called, holding positions comparable with those of the board of directors of a company.
In terms of the common law principles, directors of a company have a fiduciary duty of care and skill.
It’s weird to note that the Public Enterprises Act did not state the functions and powers of the board of directors of public enterprises, but it states the functions and powers of the minister (minister of public enterprises).
Corporate governance is a good practice designed to ensure orderly running of company businesses, ensure equity, ethical standards, and principles of good corporate governance.
The Namibia Securities Exchange adopted the Corporate Governance Code for Namibia (NamCode) to ensure that companies comply with the common law principles and Companies Act.
In terms of NamCode, the board of directors is responsible for corporate governance and has two main responsibilities namely, to determine the strategic direction of the company and to exercise control over the company.
Importantly, NamCode states that the board of directors requires management to execute strategic decisions effectively.
This article was triggered by reported events bemoaned by some of state-owned enterprises executives as reported by The Namibian in that some ministers appear to be bossing chief executive officers of state-owned enterprises.
If true, then such administrative actions by such ministers begs a question of constitutionality and lawfulness of the powers exercised by them over such public enterprises executives.
This is despite provisions in the Namibian Constitution under Article 40 which states that the functions of Cabinet members are to direct, coordinate and supervise activities of ministries and government departments including parastatals enterprises to advise the president and parliament.
Then that means Cabinet members have a duty of policy making and directives to public enterprises, but not to be involved in the day-to-day management of such public enterprises.
It is trite that ministers serve as representatives of the shareholder (state), but their powers are limited to policy making and directives.
An example of overreaching is that of the Namibia Airports Company (NAC) board of directors reportedly removed from office by the transport minister.
Such removal is debatable as it is not clear to which legislative provisions the minister applied to remove such a board of directors as the enabling act, Airports Company Act 25 of 1998 only requires the minister to give directions to the company regarding national security.
The minister is thus not empowered to remove any board of directors from serving on the board of a state-owned enterprise on its own.
In the premise, if it is true that certain ministers boast to chief executive officers of public enterprises by telling them that they are their ministers, and display attitudes of personalities, then I implore such ministers to take cognisance of the Namibian Constitution provisions under Article 1 which states that Namibia is a sovereign, secular, democratic and unitary state founded upon the principles of democracy, the rule of law and justice for all.
- Lucas Tshuuya is a legal practitioner and corporate governance expert. Follow him at tshuuya@iway.na
