TREASURY REGISTRAR’S CORNER: What 46 per cent cut in public entities without boards means

DODOMA: THE steady strengthening of Boards of Directors across public institutions marks one of the most consequential governance reforms being implemented under the oversight of the Office of the Treasury Registrar (OTR).

The OTR currently oversees 308 institutions, including 252 public entities and 56 companies in which the government holds minority shareholdings, highlighting the breadth of its governance mandate.

As part of its commitment to strengthening governance, the OTR has significantly reduced the number of public entities operating without Boards of Directors.

In the 2019/20 financial year, 52 institutions were without boards, but by 2024/25, this number had fallen to 28 a 46.2 per cent improvement and a clear reflection of OTR’s proactive efforts to enhance oversight and institutional performance.

Beyond the numbers, this reform reflects a deliberate effort to align Tanzania’s public sector with internationally accepted standards of accountability, transparency, and value creation.

At the centre of this effort is a renewed emphasis on the role of boards as the primary guardians of institutional governance. According to the Treasury Registrar, Mr Nehemiah Mchechu, Boards of Directors are not a procedural formality, but a foundational pillar of effective governance.

They are responsible for setting strategic direction, overseeing management performance, safeguarding public assets and ensuring institutions operate within legal and policy frameworks.

As management thinker Peter Drucker once observed, good governance is not about rules, but about outcomes—a principle that places boards at the heart of translating public mandates into tangible results.

Without boards in place, however, these outcomes can be compromised, as decisionmaking authority tends to concentrate within management, weakening the checks and balances that are essential in public institutions.

This risk is echoed by American leadership expert Jim Collins, and author of the bestselling books Good to Great and Built to Last, whose research on corporate performance highlights the importance of disciplined leadership and accountability in achieving long-term success.

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Recognising these structural weaknesses, the OTR prioritised the reconstitution and establishment of boards as part of broader public investment and governance reforms. Through closer supervision, coordination with line ministries and structured board appointments, these governance gaps began to narrow.

By the 2024/25 financial year, the number of institutions operating without boards had declined to 28, representing a 46 percent improvement. Mr Mchechu said the progress reflects a deliberate effort to restore governance structures that clearly separate oversight from day-today management.

This reform trajectory mirrors international practice. Global experience consistently reinforces the centrality of boards in the governance of public enterprises. In countries such as Singapore, Malaysia and South Africa, Boards of Directors serve as the critical link between government ownership and institutional performance.

They are entrusted with setting long-term strategy, approving budgets, monitoring results and managing risk. British corporate governance expert Sir Adrian Cadbury, whose work shaped modern corporate governance frameworks, once noted that a well-functioning board is the single most important differentiator between success and failure.

Against this global backdrop, attention has increasingly shifted from the mere existence of boards to their effectiveness. Mr Mchechu explained that the OTR has continued to apply professional criteria by implementing Key Performance Indicators (KPIs) and conducting regular performance evaluations of Boards of Directors.

This approach, he said, ensures institutions deliver measurable results while strengthening transparency and accountability across the public sector. Conversely, global evidence shows that institutions without boards often struggle with inefficiency, weak financial discipline and policy drift.

In such environments, the absence of oversight becomes a governance failure in itself. As a widely cited governance principle observes, the absence of governance is governance itself—and usually a bad one.

This reality explains why international bodies such as the Organisation for Economic Co-operation and Development (OECD) emphasise Boards of Directors as the cornerstone of effective oversight in state-owned enterprises. Within Tanzania, early outcomes suggest that this emphasis is beginning to pay off.

Mr Mchechu noted that institutions with functional boards are better positioned to evaluate management performance, enforce compliance, respond to emerging risks and pursue long-term sustainability rather than short-term operational fixes.

This aligns with global best practice, where public enterprises are expected, as the OECD notes, to be governed as well as the best private companies, if not better.

Beyond efficiency and performance, the reform also carries broader implications for public trust. Former United Nations Secretary-General Kofi Annan once observed that transparency, accountability and oversight are not optional in public institutions—they are essential.

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By restoring Boards of Directors, the OTR is reinforcing these principles and strengthening confidence in how public resources are managed. While notable progress has been made, the Treasury Registrar acknowledged that the task is not yet complete.

The remaining institutions without boards still represent a governance gap that the OTR continues to address. At the same time, the focus is gradually shifting from simply establishing boards to enhancing their effectiveness through stronger skills, professionalism and performance evaluation.

“The objective is not just to have boards in place, but to have boards that add value,” Mr Mchechu said.

“Strong boards are essential for protecting public investments and ensuring institutions deliver on their mandates.” As Tanzania continues to reform the governance of public institutions, the strengthening of Boards of Directors stands out as a structural reform with longterm impact.

By reinforcing oversight, reducing risk and aligning practice with global standards, the initiative is laying a firmer foundation for accountable governance, sustainable performance and value creation in the public sector.

● Prepared by the Office of the Treasury Registrar