How did NOCAL ever get into the pickle it is in? I keep asking myself. Part of the answer is in the governance arrangements that attend our state-owned enterprises. When Steve Tolbert set up public corporations in the 1970s, it was his intention that they would be a contributor, not a burden, on the public exchequer. The National Port Authority used to contribute millions of dollars to the government back then. But today, most of our public corporations survive thanks only to subsidies from the government.
State-owned enterprises, or “public corporations” as we incorrectly refer to them (a public corporation is a corporation that floats shares on a stock exchange for sale to the public), are supposed to be self-sustaining businesses. But that’s not the way they are viewed by our politicians and indeed by much of the public. They are viewed, and treated, as extensions of the government, as part of the political spoil system. People are appointed to management positions in our public corporations who have little or no management or even business experience. Is it a wonder, then, that they fail?
If we want our public corporations to succeed, we have start with a reform of our governance arrangements. Under current arrangements, the President of Liberia appoints both the board of directors and the senior management of our public corporations. That is the problem right there. The President represents the shareholders of our public corporations, who are us, the Liberian people. In the real world, the appointment powers of the shareholders of a corporation are limited to the board of the directors. It is the board of directors, not the shareholders, who appoint senior management.
So, that is the first reform that is needed. The President should not appoint the managing directors and deputy managing directors of public corporations. That should be done by the board of directors. The reason is simple. The President is too far removed from the day-to-day workings of a public corporation to know whether the management is performing satisfactorily or not. The board is held accountable for the performance of the management team of a public corporation. Well, how can they effectively perform this oversight role when they do not have the power to hire and fire the senior managers? Under current arrangements all a cynical managing director has to do is just to suck up to the President and he/she can get away with murder. If they knew that they could be fired by their board, managing directors would pay much more attention to their boards.
Next, the board of directors of a business should consist primarily of business people, not politicians, not clergymen, nor civil society types or cronies of the President. When I took over as managing director of LPRC, I insisted with the President that I did not want any ministers or politicians on my board. She acquiesced, and till this day LPRC is the only public corporation with no ministers or politicians on its board. The language of business is financial statements—-balance sheets, income statements, cash flow statements. That is how businesses keep score. To be able to exercise proper oversight, directors need to be able to read and interpret financial statements. If they cannot, then what are they doing on the board?
Then we come to the question of the calibre of managers that are appointed. We need men and women of sterling character to head our public corporations. And they need to have strength of character. They need to be able to say no, even to a President. And that brings me back to NOCAL. Randolph McClain, the chief executive officer of NOCAL is no dummy. He is an alumnus of the Steve Tolbert School of Management. I served with him the Mesurado Industrial Complex in the 1980s. He is a chemical engineer. He invented a detergent called “Eze” that we used to produce and sell along with Omo.
Some years after the 1980 coup d’etat he went to work for DuPont and toiled in the DuPont vineyard for decades. DuPont is not some two-bit company. It is a marquee organization, founded by the DuPont family who own the State of Delaware. So, how could Randolph McClain allow the shenanigans that went on at NOCAL to go on? Those things would never have been tolerated at DuPont.
Then there is the chairman of NOCAL, Cllr Seward Cooper. Seward is again no dummy. In the 1970s he was a student leader of no mean proportions. He was upright and strong. He too spent decades working for a marquee organization, the African Development Bank. Why did he not take a stand?
When I was at LPRC, I acquired the nickname “Dr. No” amongst certain people at Fish Market because I did not have a problem saying no if I was asked to do something that I felt was unethical or wrong. My admonition to NOCAL’s CEO and chairman and all public servants is that there is no job in the world which is so important that keeping it should cause you to compromise your integrity or say “yes” to any directive, even if it’s from a President. That is the lesson here.
The writer is a Certified Public Accountant and businessman. He can be reached at