Effective control of organization’s suppliers d. Better cost control e. Higher productivity f. Reduction in wastage and rework 5. Public Enterprise Governance Index (PEGI) The techniques for improving PE performance have been around for a long time. However, they have not been implemented with any seriousness. The blame for this lacuna can not be placed at the door steps of PE mangers. They are like any other manager, merrily pursuing their self-interest. The responsibility for designing and implementing an adequate system lies squarely with the owners. In fact, it can be argued that owners get the public enterprises they deserve. That is, poor performance of PEs is a reflection of poor gover- nance of the PE sector. While governments are willing to pay huge sums of money to management consultants as success fee for a single privatization transaction, they are most miserly investing in governance of PEs. Most of the reforms that are implemented are cosmetic in nature. They amount to rearranging various boxes in the name of re-structuring and reforming. The endless debates on the desirability of holding company versus other forms have been a great waste of time because they never touched the core issue of accountability. This meeting can make a very valuable contribution by agreeing on an index to measure the quality of governance efforts made by policy makers to manage the PE sector in their respective countries. This paper proposes a simple index given in Figure 10. Designing and Implementing Mechanisms
´8 Public Enterprises: Unresolved Challenges and New Opportunities The first column of Figure 10 list the two categories of approaches men- tioned above. Column 2 lists the specific approaches under these two broad categories. Column 3 gives relative weights to these approaches. Performance Agreements are given a high weight as they are the most concrete manifes- tation of accountability in the long-run. Without them, other approaches would have a transient benefit. Column 4 gives the implementation status of these approaches. For example, for Performance Agreements, we could use the scale given in Table 5 below. Figure 10: Public Enterprise Governance Index Implementation Status System Weight 100% 75% 50% 25% 0% Trickle Down Performance Agreements 50 Strategic Plans 10 Direct Attack Performance Budget 7 E-Government 7 E-Procurement 6 ISO 9000 Certification 6 Citizen’s Charters 6 Quality Marks 4 Knowledge Management 4 TOTAL = 100
´¶ It is important to note that a PA implemented with wrong methodology is at best useless, at worst can be a big waste of time an d other resources. The bottom line for an acceptable methodology is its ability to rank various PEs objectively as depicted in Figure 11 (following page). Appendix II (see Annex) includes an example of the best-practice meth- odology for arriving at the ranking in Figure 11.
- Spring '17