Is your Social Security money being well managed and in the public interest? After the succession of investment scandals that forced a Senate probe into Social Security, public confidence in the institution was shaken. But a new board with a new Chairman and eventually a new CEO hope to change the public perception of the Social Security Board. And a lot of that has to do with what's good governance practices - how an institution is run for the greatest benefit of its shareholders - or in this case, stakeholders - the regular folks who must make that monthly contribution.
For the past three days - the members of the board of directors and managers have been learning all about corporate governance from Valda Henry, a regional expert on Social Security. She told us that managing Social Security requires a special kind of corporate vigilance and we asked the Chairman if his Board is up to the task.
Valda Henry, VF Inc.
"It is truly an important issue and the reason is because of all of the scandals that have taken place worldwide. But even in our own communities we have our own small scandals but it is a recognition of the important role of board members, the role that they play in ensuring that the organizations that they govern are managed effectively, are governed effectively and that there is accountability, transparency to stakeholders and for Social Security, as I often say, may be the most important institution in any of our communities. Social Security institutions hold money in trust and that gives them a duty of care over and above the normal duty of care where they must operate, board members, managers, and staff, must operate in the sole best interest of Social Security and so the best interest of the stakeholders of Social Security."
Jules Vasquez Reporting,
The Social Security Board of Directors isn't serious about the prudential management of the fund. How would you answer that criticism?
Michel Chebat, Chairman - SSB
"Jules certainly I don't want to say that there is some merit to the criticism but the criticism is out there. The board has implemented new policies so that we have guidance as to how monies are going to be invested. We have guidance as to procurement and these things have been put in place so that we ensure that particularly in investments that proper due diligence is conducted before we invest our money."
And now particularly as Social Security's Board of Directors and its senior management team sits in on this workshop, we wondered for those five government appointed directors, that control the majority votes on the Board, where does their primary allegiance lie.
Michel Chebat,
"Jules I don't think that any prudent Chairman could be blind to the fact that the Social Security Board plays an important role in the macro economy of the country. However, above and beyond any political influence or any political control, I think as the Chairman of the Board, and I can say the Directors of the Board, it is important that we maintain that our primary responsibility is to the Social Security Board and to the stakeholders of the Social Security Board."
But is the $10 million investment that Social Security is about to make in the NHI rollout really in the best interest of stakeholders?
Jules Vasquez,
Would you discuss that and how that is not corporate raiding or is not raiding of the fund for an electioneering stunt?
Michel Chebat,
"Jules I don't see how it can be raiding of the fund. It is unfortunate that everything that the SSB will do this year, simply because we have election scheduled for next year, will be seen as an election gimmick or as a ploy by the government of the day to use the SSB to accomplish these things. But when you look at what NHI has done for this country, I don't see how anybody can have any argument as to the effiectiveness of it so far and how necessary it is to provide primary healthcare in this country."
Jules Vasquez,
But it is sort of a red herring to argue the value of NHI. I don't think anyone argues that but is it within the ambit of Social Security to set up a NHI. Social Security is an insurance fund.
Michel Chebat,
"You have to recall that NHI is a tripartite organization, if you may, or a tripartite initiative with the Ministry of Finance and the Ministry of Health as the other two parties. So that two thirds of this project is being funded, if you may, by the government and I think that is critical. I think that is part of the information that is not out there. Everybody sees this as just a SSB issue, it is not. SSB is only a third party in this whole program and I think it is important for the public to know that."
Jules Vasquez,
But its not Social Security contributing $10 million in the first year when it was originally envisaged to do only $5 million staggered over three years but instead to give it the initial push, $10 million is being put.
Michel Chebat,
"No, no, no. An agreement was signed between the three parties for the entire program and the SSB would have invested $15 million, $5 million per year. There was a decision by the board and by the NHI Committee that we were going to advance the rollout and the Board decided that instead of spreading the $5 million yearly, $5 million had already been given so there was $10 million remaining and we felt that there was a need to try and get out as much throughout the country as we can as quickly as possible to start providing healthcare. And as a result of that, we decided that instead of waiting for next to contribute, that we would advance, if you may, that $5 million. So that was already part of an original agreement."
Jules Vasquez,
But isn't that a political decision, to meet political expediencies of the election cycle?
Michel Chebat,
"I beg to differ Jules. As a matter of fact because we have only rolled out in the south and south side Belize City, there has been a clamoring for people from the north and the west as to why is it that they have not received those services. So I mean obviously if you want to put a political spin on it, this is the time to do it, this is the year to do it."
We should note that this corporate governance workshop was held without the key functionary of the corporate structure which is a CEO. But Chairman Chebat assures us that they will commence interviews with applicants for that post later this week.
