The Minister of Labour, Employment and Job Creation, Emmanuel Kwadwo Agyekum, has said the proposed Independent Public Emoluments Commission (IPEC) that will be established will not take away the powers of boards of state-owned enterprises (SOEs).
He said IPEC was the way to go, adding that the government wanted to establish a structure in line with those in the developed world.
"It is not a structure that is going to take anyone's power.
We are coming from different sectors.
"We also want you to at least have a state enterprise that would be able to compete and get talents that other people are getting.
It is not coming to take your powers; it is not coming to take the board's powers," he said.
Transition
Mr Agyekum said this last Friday (Sept.25) at a Fair Wages and Salaries Commission (FWSC) Stakeholder Engagement on Transition from the FWSC to IPEC.
The event, which was the second of consultations with stakeholders, was attended by personalities including chief executive officers (CEOs), deputy CEOs, finance directors and heads of organisations.
System
Mr Agyekum urged the heads of state institutions to contribute to the engagement to ensure that the IPEC became the best system.
"Let it be the best system.
We are not just lifting something from the United Kingdom or lifting something from another country and bringing it to the country.
"We want you to support, we want you to contribute.
We want you to give any other input that would be able to help us to bring in something new," he said.
He said the President was in full support of the IPEC, thus the need for all to embrace it.
“From the side of Cabinet, we know what is happening; that is why we are in full support of what is happening today,” the Labour Minister stated.
Objective
The CEO of the FWSC, Dr George Smith-Graham, emphasised that IPEC was not intended to weaken boards, undermine corporate governance or prevent
SOEs from attracting and retaining the talent required to operate successfully.
Neither, he said, was the intention to impose the same regulations on every chief executive, irrespective of the size, complexity, commercial orientation, financial position or strategic importance of the enterprise.
"Such an approach would neither constitute sound compensation management, nor good corporate governance.
What government seeks to address is the absence of a sufficient, coherent national framework governing the monuments across institutions that are ultimately owned or substantially financed by the people of Ghana," he said.
He said where government was the majority shareholder, it equally had a responsibility to safeguard the public investment entrusted to it and that the shareholder, therefore, had a legitimate interest in how enterprise resources were deployed, including executive and employee compensation.
"I particularly want to assure our chief executives that boards will continue to have an important role in the remuneration matters under the proposed IPEC," he said.
Business models
Boards, Dr Smith-Graham said, knew their business models, financial positions, operating environment, labour markets, strategic priorities, and the competencies required to lead the organisations.
Under the proposed framework, therefore, Dr Smith-Graham said boards would continue to develop and submit remuneration proposals to IPEC.
"Boards will assess the circumstances of their enterprises and submit evidence-based remuneration proposals.
IPEC, as an institution representing the shareholders' interest in public remuneration, will consider those proposals within an established national framework that will be known by all.
Such consideration will take into account objective factors including the size and complexity of the enterprise, profitability and financial sustainability, capacity to pay, productivity and organisational performance, market complexities, and scarcity of skills, internal and external pay relativities, and long-term interest of both the enterprise and the shareholder, that is, government," he said.
The FWSC CEO said IPEC would work closely with SIGA and that its establishment was not intended to duplicate or undermine SIGA’s important corporate governance and shareholder oversight responsibilities.
Article 71
Dr Smith-Graham dismissed the perception that IPEC was being established primarily because of Article 71 office holders.
That, he said, was not the case.
In a presentation on the Legal and Institutional Evolution of Public Sector Emoluments and Lessons for Developing the IPEC Bill, the Director General of the Value for Money Office, Dr Abdul Baasit Aziz Bamba, said there would be more transparency with the establishment of IPEC.
