{UAH} Highest-paid government directors revealed

Highest-paid government directors revealed

Written by Alon Mwesigwa

 Last Updated: 15 May 2015

 

MP David Bahati with some the board and management of National Planning Authority

Leaked parliament report shows how parastatals splash cash on their board members and the disparities involved

A draft parliamentary report shows that some board members of public enterprises earn a monthly retainer of as much as Shs 14m in addition to about Shs 2m in sitting allowances.

National Planning Authority, Post Bank Uganda Limited, Uganda Electricity Transmission Company, NSSF, National Housing and Construction Company are some of the government entities paying their board members staggering amounts of money monthly in retainers and allowances, The Observer can reveal. 

The leaked report, prepared by parliament's Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) shows that National Planning Authority leads the ways when it comes to over-the-top board members' earnings.

According to the law that set the institution up, NPA board members are regarded as employees. Consequently, they are paid a salary and allowances just like other staff. 
NPA chairman Dr Kisamba Mugerwa earns a salary of Shs 14.4m every month without a sitting allowance. His deputy, Dr Abel Rwendeire, earns Shs 13.8m.

The other three members of the board earn Shs 13.3m each. The drivers of the five board members earn at least Shs 1.1m each. The Post Bank Uganda Ltd board chairman is the second highest earner among board members across the board, followed by his counterpart at Uganda Electricity Transmission Company (UETCL).

Cocase examined the performance and audited accounts of public enterprises for the financial years ended 2011, 2012 and 2013. The committee's final report is to be released sometime this month, according to sources close to the team.

The report shows that Grace Bakunda, the Post Bank Uganda board chairperson, earns Shs 8,330,000 in monthly retainer fees and an additional Shs 500,000 every time the board sits. The other board members – Oode Obella, Hawa Lule Nsubuga, Henry Mbaguta, Grace Isabirye, and Sebastian Okot Ondoga –earn Shs 7.5m each and an additional Shs 400,000 every time they sit. For most public organizations, boards sit at least once a month.

At UETCL, the board chairman, Peter Ucanda, earns Shs 3.5m in monthly retainer fees and an additional Shs 714,000 every time the board sits. The other five board members earn Shs 2.9m each and Shs 500,000 each for every sitting. Other public authorities with high-earning board members are NSSF, where the chairperson earns Shs 2.5m while the other eight members earn Shs 2m each in retainer fees.

Every time they sit, the chairperson is paid Shs 500,000 while other members earn 450,000 each. Bank of Uganda, Uganda Revenue Authority, Uganda Development Bank (UDB), PPDA, and National Housing have their board members earning at least Shs 1.5m or above every month. The members also earn between Shs 500,000 and Shs 1m per sitting.

National Housing has the highest amount – at Shs 1.6m – paid to each board member per sitting. The retainer fee is often paid monthly, but also an organisation can decide to compute it and pay an annual fee. Most organizations sit at least once a month and the board chairperson can call meetings as and when he/she feels it appropriate.

For instance, the URA Act says the board meets "at least once every month at such places and at such times as may be decided upon by the board."

On the other hand, according to the BOU Act, Bank of Uganda board members must meet at least 10 times a year. But also, "the governor may convene a meeting whenever two directors request for a meeting."

This, according to a source familiar with board operations, gives members of boards a leeway to sit as many times as they wish –sometimes twice a month with sitting allowances very much part of the motivation. The report found that some of "the board members are not in gainful employment, making the situation even worse, when the entity they are supervising is the only source of income."

This is not surprising because many of the boards are filled by politicians who lost their seat in parliament or a place in cabinet. This, the committee's report states, has resulted in the "approval of unnecessary local and international travels which management is directed to implement without delay."

This perhaps explains why, according to our sources, most of the enterprises were reluctant to reveal how much they pay their board members. Indeed the Cosase report also reveals that most entities were reluctant to reveal all monies paid to their board members apart from NSSF, which offered full disclosure.

"The findings revealed that there was limited disclosure of remuneration of boards for statutory corporations," the report says. 
"Only NSSF out of the 32 statutory corporations surveyed, explicitly indicated board remuneration to the consultant," it added.

The public organisations that did not submit anything regarding their board members' remuneration include National Curriculum Development Centre, Uganda National Cultural Centre, Dairy Development Authority, Cotton Development Organisation, and National Drug Authority.

DISPARITIES

The report describes the findings of the remuneration across entities as "disturbing" - with huge disparities in the retainer fees and sitting allowances for the different boards yet they have the same mandates.

For example, the PPDA board chairman earns Shs 2.5m in retainer fees but his counterpart at Uganda Property Holdings earns Shs 0.5m. The Uganda Development Bank board chairman earns Shs 2m while the Uganda National Bureau of Standards chairman gets zero pay, the report said.

The report further states that the absence of a board charter to guide the operations of the boards has left many with unclearly-defined roles, sometimes leading to duplicating or clashing with those of management.

"Many boards have ended up abusing or assuming more powers with negative consequences," the report notes.

The report cites the board of the Uganda Electricity Generation Company Ltd, which sent its CEO John Mugyenzi on forced leave for refusing to implement a board order to send the company's finance manager, Emmanuel Lubandi, on forced leave. 

amwesigwa@observer.ug

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Gwokto La'Kitgum

"Even a small dog can piss on a tall Building", Jim Hightower

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