MfD: State firms' supervisory boards have too many members

Prague, Feb 18 (CTK) - Czech state firms' supervisory boards have up to twice as many members as private firms', yet the state has never exacted any damage incurred, even though it would have a reason to do so, Mlada fronta Dnes (MfD) writes Monday.

It writes that the largest Czech firm Skoda Auto can do with six members of the supervisory board, including head of the Volkswagen concern Martin Winterkorn, while the many times smaller Cesky aeroholding (CAH) aviation holding is controlled by 12 people.

They include veteran politicians, such as former Czechoslovak finance minister and later first deputy Czech finance minister Jan Klak and the freshest arrival, former defence minister Alexandr Vondra (Civic Democrats, ODS), MfD writes.

Recently, two lawmakers for the senior government Civic Democratic Party (ODS), Marek Snajdr and Ivan Fuksa, who gave up their deputy mandates and so enabled the government to push through parliament a key bill with which they did not agree, became members of state firms' supervisory boards.

MfD writes that the differences in the strength of supervisory boards are even bigger in comparison with other large private firms.

It mentions, for instance, the Agrofert farm-food giant that has three members of the supervisory board and the metallurgical company Arcelor-Mittal with six members, while the state Czech Rail (CD) is controlled by nine people and one post is vacant, and the CEZ energy company by 11.

Deputy Finance Minister Zdenek Zajicek says the number of members of supervisory boards is regularly assessed and that many people on state firms' supervisory boards, including him, do not get any remuneration even though he thinks even civil servants should be paid for their work, MfD writes.

It quotes economist Jan Kohout, who lost his post on the CAH supervisory board, as saying if the supervisory board is too strong, one relies on that some other member may cope with problems.

"On the other hand, more heads know more," Kohout said. He said, however, experience should be the main criterion in choosing people for the supervisory boards.

"It is necessary that supervisory board members have solid experience in the fields of analysis of accounting statements, evaluation of firms and of company economics as such," Kohout said.

CAH has one of the most lucrative supervisory boards. The pay of 50,000 crowns monthly is combined with cheap air tickets from the CSA national carrier, MfD writes.

It writes that Zajicek defends the level of remuneration on supervisory boards.

"The level of remuneration of members of corporate bodies is not only tied to how much time they spend processing various material, but also their responsibility for the decisions made. True, members are liability insured, but yet they are liable with their property," Zajicek said.

However, the state has never even made an attempt to exact liability for the decisions made by the supervisory boards even if there was a good reason for this, MfD writes.

It gives CSA as an example. If it were not for an injection of 2.5 billion crowns from another state firm, the air carrier would have gone bankrupt.

The supervisory board then included former finance minister Ivan Kocarnik and MP Ivana Rapkova (both ODS), MfD writes.

Barbora Tomsovska, top managers hunter from Touchdown company, told MfD the nomination of a politician to a state firm is always a sort of political recompense.

"If gentlemen like Vondra are such experts, why do not firms like Procter&Gamble or Coca-Cola take them on, why is it always a state firm?" Tomsovska asked with a slight exaggeration.

Psychologist and personal coach Tomas Vasak told MfD that he sees the biggest problem in the habits that former politicians bring to supervisory boards from politics.

"When you have a look at how ministries work, how difficult it is to push through and complete projects there, how ineffectively they direct employees, such people can only harm commercial firms," Vasak said.

MfD writes that Foreign Minister Miroslav Kalousek recently said laughing the post on the supervisory board of the Cepro state-run fuel distributor for Snajdr, who receives about 30,000 crowns monthly, is really not a "lucrative" one.

The paper writes, however, that even the 30,000 crowns for one meeting of a couple of hours a month that Snajdr even does not have to attend, plus a car, a mobile phone and an office are a super reward for a veteran politician.

The average pay in the country is some 24,500 crowns gross a month.