SOEs can be operated by effectively and efficiently

Currently State owned enterprises (SOEs) in Sri Lanka are going through issues due to a lack of vision and corporate strategies to achieve goals and objectives. More than everything, the tone at the top does not demonstrate honesty and ethical behavior when conducting its operations. SOEs need to be governed by a strong Board and be led by a Chairman with extensive business acumen and who could demonstrate commitment to honesty, ethical strength, reliability, and fairness through action.

 Laksala’s current Chairman (Mr. Muhammed Hamza) and the Board which comprises with representative from the Treasury and the Line Ministry have set the tone by defining management’s leadership and commitment towards openness, honesty, integrity, and ethical behavior.

Laksala’s Chairman is adopting all best practices in the corporate sector to ensure it run as a profitable organization which functions with a set of processes to create, communicate and deliver value to the customers and manage customer relationships so as to benefit the organization and the stakeholders.  

SOEs that are carrying out commercial operations are provided with all the support by the Treasury and the Government Auditors. Treasury officials and the Government Auditor understand the nature and type of the operations the SOEs are conducting. However, if the management team is weak and if they do not lead by example, then the SOEs are unable to comply with the required laws and regulations by the Government. Nobody can blame red tapes and the auditors for inefficiencies in SOEs. If the management is planning its activities, identify and manage risks, the SOEs can be operated by effectively and efficiently by complying with laws and regulations.

Many SOEs do not have standard operating procedures (SOPs), due to this boards who get appointed through the ministry with political changes, do conduct operations according to their whims and fancies. Therefore the best course of action the SOEs should adopt is to appoint SLIDA to draft SOPs for the SOEs. Laksala has taken initiatives to appoint SLIDA to draft its SOPs already.

Further, when state owned enterprises initiate and attempt to operate with a vision by devising strategies to execute the corporate goals and objectives, the external forces especially the competitors attempt to sabotage the internal operations and bring disrepute to the organization by applying all hostile methods. It is true that SOEs conduct its operations under strict guidelines with many red tapes. However, when SOEs are carrying out commercial operations and taking initiatives to run as a corporate by adopting best practices, the internal and external forces who cannot withstand change suddenly remember all guidelines and taking action to remind the management and general public of all such guidelines to sabotage the operations.

I strongly believe that all SOEs in Sri Lanka should appoint Chairmen and Boards with business acumen to run the operations with a clear long term vision with properly laid down corporate plans. Further, the policies related to human resources (HR), especially performance evaluation should be KPI driven and not to adopt departmental and ministry HR practices to SOEs.

By Madhura De Silva, CEO/ Director General, Laksala