Monitoring And Evaluation Of The Effectiveness Of Board Accounting Essay

As per the Code, the Board is responsible for the entire procedure of hazard direction and should guarantee that the company develop and put to death a comprehensive and robust system of hazard direction. In add-on, the Code ( 2004:34 ) provinces that the board must pass on its hazard direction policies to direction and all other employees as appropriate to their functions within the administration and must fulfill itself that communicating has been effectual and understood.

As for internal control, the Code ( 2004:35 ) specifies that the board is responsible for the system of internal control and must put appropriate policies to supply sensible confidence that the control aims are attained and that direction is responsible for the design, execution and monitoring of the internal control system.

From the analysis, it has been found that there is a low degree of execution with regard to the reappraisal and monitoring of the internal control system by direction in most of the parastatal organic structures. With regard to put on the line direction, which is a agency to continue and make value, it is found that equal attending is non being given to this issue in most administrations. As pointed out in the literature reappraisal, hazard direction is a procedure which involves designation, minimisation and turning away of hazards and the Code clearly spells out that it is the duty of the board of managers to hold an inadvertence on hazard direction.

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5.2 Corporate Social Responsibility

Overall, it has been observed that most of the parastatal organic structures are largely involved in philanthropic activities instead than set abouting corporate societal duty activities. This is expected in position of that these maps are being undertaken by specialist authorities bureaus in the populace sector e.g poverty relief, environmental protection, etc.

As for private endeavors, the Code recognises that they should travel to a new degree of duty as respects their responsibilities to society. More so, they should non be perceived to be merely net income oriented.

5.3 Monitoring and Evaluation of the Effectiveness of Board

The other country in which parastatal organic structures are weak relate to the monitoring and rating of the public presentation of the Chairperson and managers. The Code ( 2004:22 ) provinces that one of the common nucleus maps which should be performed by the president is guaranting that monitoring and evaluating of board and manager assessments are carried out. Besides, the Code ( 2004:27 ) recommends that managers should be assessed both separately and jointly as a Board. It should be pointed out that parastatal organic structures have already implemented a Performance Management System ( PMS ) for employees merely. As such, it can be considered that it is just that PMS should non be applied merely to employees but it should include the Chairpersons and managers who, among others, are responsible for giving strategic way to the administration.

5.4 Executive Directors

In add-on to the above, the analysis shows that most parastatal organic structures do non hold two executive managers. Harmonizing to the Code ( 2004:18 ) , all boards should hold a strong executive direction presence with at least two executives as members. It should be pointed out that direction construction of parastatal organic structures is defined in their several Acts and none of them require that the administration should hold at least two executive managers. As such, it can be concluded that this construct is no more applicable to the private sector administrations, as managers are besides involved in the twenty-four hours to twenty-four hours direction of their companies and at clip, they are besides stockholders in their companies.

5.5 Board Committees

The survey besides reveals that most parastatal organic structures have non yet established a Corporate Governance Committee but some of them have already established an Audit Committee of the Board while the ( Code 2004: 28 ) requires that all administrations should hold, as a lower limit, an audit commission and a corporate administration commission.

5.6 Awareness of the National Code including the Guidance Notes

Another of import point that has come out from the analysis is that respondents are non to the full familiar with the National Code of Corporate Governance ( 2004 ) including the Guidance Notes on Corporate Governance for State Owned Enterprises ( 2006 ) . In add-on, it is found out that the Code has non been to the full implemented in all parastatal organic structures. As respects be aftering its continuity and sequence, it has been found that respondents have given a hapless evaluation to this issue. This is explained by the fact that the composing of the Board has been codified in the several statute law. Most of the board members are public functionaries who rotate between ministries and when they are transferred to other ministries, they are replaced by their co-workers to move as the official representative of the ministry. Another point is a few board members are campaigners ( member of the populace ) of the several Minister and in instance there is alteration in authorities, the new Minister will name his/her ain campaigners. As such all these factors do non guarantee continuity of the Board and as such sequence planning is made hard in parasatatal organic structures.

5.7 Positive Findingss

Overall, it is noted that positive responses have been given to the demand for the Chairperson of the Audit Committee to be an independent non-executive manager ( Code 2004:29 ) , the demand for managers to avoid struggle of involvements ( Code 2004:20 ) , timely publication of Annual Reports ( Code 2004:41 ) , attending at Board meeting ( as per several Act ) , etc. However, the analysis shows that the positions expressed by the respondents are the same in all the sectors in which the administrations operate. In add-on, variables such as the size of the Board, the age of the administration, place of the respondents in their administrations, the sector in which they are runing, size of the administrations, are non factors which have a bearing on the responses received from the respondents.

5.9 Benefits of Adopting Good Governance Principles

In general, respondents have given a high evaluation in regard to the benefits achieved by an administration which has adopted corporate administration rules There are no major difference in the responses between the two questionnaires with regard to the followerss: part of good administration patterns in the fulfilment of economic, environmental and societal duties, entree to authorities support and as a vehicle of efficiency of concern operations.

5.10 Constraints to Good Administration

As respects the restraints faced by administrations, it is noted there is no major difference in sentiments with regard to the factors that hinder the acceptance and application of good corporate administration such as broad political intervention in internal direction, command of non good policies by parent ministries, limited grant and support for administration sweetening and the nomination of Chairperson and some managers entirely on political footing.

5.11 Recommendations

This portion makes recommendations in the visible radiation of the findings and the decision that have been reached.

5.11.1 Awareness Programme

The Office of Public Sector Governance ( OPSG ) , a freshly created division at the Prime Minister & A ; acirc ; ˆ™s Office, should, in coaction with the Mauritius Institute of Directors ( MIOD ) , develop and implement a comprehensive preparation programme for all board members.

5.11.2 Board Committees

As already pointed out, some parastatal organic structures have neither set up an audit nor a corporate administration commission. It is recommended that OPSG should help these administrations to put up those commissions. In add-on, one officer of OPSG should be nominated to sit on these commissions in the involvement of independency every bit good every bit moving as fiscal expert to those commissions. It should be pointed out that all staffs of the OPSG are professional comptrollers.

5.11.3 Changes to Legislation

In order to be in line with Code ( 2004 ) and the Guidance Notes ( 2006 ) , it is recommended that all Chief Executive Officers ( CEO ) in parastatal organic structures should go managers as executive managers. Although it is understood that the Code is non compulsory but a statement of good patterns, it is therefore recommended that relevant alterations be made to statute law i.e. the Chief executive officer should go a manager of the board and a Senior Manager be besides promoted to the Board.

5.11.4 Succession Planning

In order to guarantee that representatives of Ministries are familiar with the administration, it is recommended that all Ministries should put up an officer to move as alternate managers in the board of parastatal organic structures and to replace their co-workers when the latter is unable to go to board meetings.

5.11.5 Corporate Social Responsibility ( CSR )

As already mentioned, CSR is non to the full applicable to parastatal organic structures. However, it is recommended that all parastatal organic structures should see traveling from the present philanthropic towards CSR activities within the following five old ages.