House approves bill redefining boards’ authority

The House of Representatives has approved a bill that aims to streamline public corporations by limiting the authority of boards and reducing membership to five except for the Marianas Visitors Authority board.

The House approved Monday House Bill 14-154, which gives the authority to manage and operate agencies to executive directors.

A report submitted by special committee chair Rep. Clyde Norita, said the bill would prevent the board from micromanaging corporations, and dismissing department heads “on baseless grounds.”

“It would enable the public corporations to operate in a more business-like manner. Insulating principal executive from dismissal on baseless grounds by the board or the board chair also guards against the politicization of the public corporations,” the committee said.

Under the bill, the board may also remove the agency head for cause by a unanimous vote of the members.

“The benefit is to streamline the management and administration of the public corporations and limit unnecessary interference by board member in the daily operations of the corporation,” said the committee.

The committee cited the recent debacle involving the Marianas Public Lands Authority board members as a case in point of “a worst-case scenario of a board meltdown.”

It said that decisions on key issues such as land compensation, land leases, land designations, were left unresolved “as board members engaged in a tawdry display of power grabbing and the fate of its commissioner, the single most important position within the agency, made uncertain.”

It said that the MPLA incident “makes the most compelling argument that enabling statutes must specifically provide that the management and administrative functions of the public corporations is vested with the principal executives and not with the board.”

The committee said it has revised the bill following input from various boards.

Overall, the committee received opposition from the boards of the Commonwealth Development Authority, Marianas Public Lands Authority, Commonwealth Ports Authority, Commonwealth Utilities Corp., Retirement Fund, and MVA.

The MVA board, in its comment, favors maintaining the present MVA board structure saying that “we are comfortable with being able to select our managing director to manage and operate MVA, especially with one we can all work with.”

The legislative panel agreed to MVA’s position as “its unique organizational component of a private membership justifies a larger board so that the private membership may elect private members to serve on the board.”

In summary, the revised bill provides a standardized number of board members (five members each except MVA), vests the board with the policymaking function of prescribing rules and regulations consistent with the enabling statute of the corporation, require all boards to be appointed by the governor and confirmed by the Senate, require all appointed members to have an Associate of Arts degree and five years of management experience, require members to be paid for attendance only at board meetings, and require all principal executives to be appointed by the board but subject to dismissal only for cause and by a unanimous vote of members.