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Difficulty: MediumPublic Enterprises: Rationale, Features, Management, and Control

The supervising Minister of a statutory public corporation holds regulatory powers over the organization. Which of the following functions falls strictly within the executive scope of the Board of Directors rather than the supervising Minister?

  1. Managing routine internal operations and executing day-to-day administrative policiesAnswer
  2. B
    Transferring state ownership and equity shares of the enterprise to private investors
  3. C
    Classifying the utility operations as non-commercial direct personal services exempt from public accounting
  4. D
    Drafting Articles of Association to regulate profit dividend distribution among private shareholders

Answer

Managing routine internal operations and executing day-to-day administrative policies
In public enterprises, particularly statutory public corporations, control is divided between ministerial oversight and board administration. The supervising Minister exercises external control by issuing broad policy directives, appointing board members, and approving major capital expenditure. The Board of Directors, however, retains internal autonomy to manage day-to-day administrative operations and implement routine policies.

Step-by-Step Solution

1
Analyze the division of control in public statutory corporations.
Ministerial control operates at the macro/policy level, whereas the Board of Directors operates at the operational/administrative level.
Public corporations are given administrative autonomy so that executive officers and the Board can manage daily affairs efficiently without political micro-management.
2
Differentiate Board responsibilities from Ministerial and Legislative duties.
The Minister approves major capital expansion and issues general policy directives, while the Board oversees daily administrative operations.
Interference by the Minister in daily routine management defeats the purpose of creating an autonomous public corporation.

Key Concept

Distinction between Ministerial Control and Board Management in Public Enterprises
Estimated Time:1m 0s
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Topics

Public Enterprises: Rationale, Features, Management, and Control

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