Nile-Pet needs an Independent Board of Directors
By Machien J. Luoi
November 16, 2008 — On November 13, 2008, Sudan Tribune reported that a Board of Directors was appointed by H.E the First VP of Sudan and President of the government of Southern Sudan (GOSS) Salva Kiir Mayardit to “properly manage” Nile Petroleum oil company owned by the GOSS. The report named prominent GOSS Ministers as members of the Board of Directors with Minster of Mining & Energy Hon. John Luk Jok as the Chairman of the body. In my opinion this gesture is both noble (have our own Oil company) and puzzling (top GOSS Ministers as Board of Directors).
Honestly speaking, it is a noble idea for Southern Sudan to have its own oil company and GOSS to have an oversight and some control over its own oil company. However, a big portion of Southern Sudan’s population including the “Honorable Ministers” would also agree that having the “Honorables” in the Nile Pet Board of Directors while actively serving as heads or deputies of major Ministries in GOSS will pose major threats to the work ethics of Nile Pet and indeed the very intentions of GOSS in the oil sector. My concern rises from the role of the Board of Directors, accountability and transparency and profit verses social responsibility of the Nile Pet. If I had a right to voice a suggestion, I would have asked the FVP and the GOSS President to hire experts, competent and independent individuals to the Board of Directors of Nile Pet.
The Nile Pet Board of Directors is expected to “achieve maximum economic benefits for the people of Southern Sudan in the oil Sector.” Details of specifics of the Board’s duties and responsibilities are not yet disclosed. Nonetheless, the Board will bear the cross of Nile Pet’s legal responsibilities, management of resources and major decisions. It will act to the best interest of those they serve (Southern Sudanese) at all times; appoint executives of the company; monitor decisions by the executives, assess their performance, set strategic direction, ensuring oversight, control and accountability; and most importantly Board members will carry the ultimate authority for the organization’s effectiveness and efficiency. My concern in this area is that Nile Pet needs to be run like any other company that operates in Southern Sudan or internationally and not like a government bureaucratic agency. This is where I think the “Honorables” will be torn apart. They will neither maximize the efforts to achieve the “Maximum economic benefits” nor execute their Ministerial obligations in the GOSS to their abilities. There will be too much in the Board members’ plates to perform. If duties at both ends can’t be maximized, meetings adjourned or right decisions won’t be made because there is too much to do by one person then there is no progress (which we direly need).
Because of so much to do and more than one task to be perform by individual member of the Board, issues of accountability and transparency will arise and conflict of interests in the decision making will limit independence of the Board of Directors. Legal controls will be strained as the “Honorables” also have significant decision making powers in the GOSS leave a lone getting foxy accordingly as it fit their interests. Lack of comprehensive reviews of the company’s legal and regulatory controls and internal compliance with its own policies may result into misappropriation of funds, illegal hiring, nepotism and tribalism taking over the Nile Pet. Moreover, shall the Nile Pet Board members be paid or not? The “Honorables” are already getting paid through their respective Ministries but as members of the Board of Directors of Nile Pet, their labor will be paid for. In this regard, they will be the highest decision making of the Company’s leadership. This is where I am afraid the Board may occasionally vote to raise their salaries unopposed, give blind eye to their own internal missteps and once in a blue moon some may prefer to act on their Ministry’s interest instead of assuming neutrality. Independence of the Board is significant for accountability and transparency of the entire organization and its whereabouts.
Like any other company in Southern Sudan or internationally, the Nile Pet is set to the path of profit making as its ultimate goal. In fact that is how it will “achieve maximum economic benefits for the people of Southern Sudan in the oil Sector.” To remain competitive in the today’s profit making universe, Nile Pet will have to compete with regional, national and world oil companies. Not only will it need to compete, it will have to win economic battles. The Board will have to maximize efforts to exploit every opportunity that will help the company achieve competitive advantage against the other oil marketing competitors. This is where knowledge, competence and expertise in the business sector will be vital. In that path, issues of human and environmental concerns will arise, conflicts of concessions will ensue and natural and legal rights of employees, consumers and competitors will sometimes be compromised. The Board of Directors will bear the burden of company’s social responsibilities (observe norms, standards and expectations) with regards to protection of consumers, employees and the entire population within the company’s jurisdiction of operations. Only knowledgeable experts in the areas of commerce, business and marketing sectors can gain competitive advantage during difficult and good times of company’s operations. The Nile Pet needs business and marketing specialized and independent experts to spearhead its profit making initiatives as well as observing its social responsibilities.
Finally, Nile Pet ought not to be governed like a bureaucratic agency. H.E President Salva Kiir and GOSS need to hire local (Southern Sudanese) business experts, competent and able entrepreneurs who will bring diverse perspectives into the Board’s strategic debates and discussions. The Company needs Board members who can sell its activities to local and external consumers. It is understandable that there is scarcity of skillful business administrators in Southern Sudan, but, hiring top Ministry office holders will not help the organization. An independent Board of Directors other than the “Honorables” for Nile Pet will represent GOSS at its highest ethical consciousness and consequently the best way to “achieve maximum economic benefits for the people of Southern Sudan in the oil Sector.”
Author is a Southern Sudanese residing in the United States of America. He can be reach at [email protected].