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Lithuanian President set to root out «eternal» state company CEOs

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULinas Jegelevičius for the BNN

«Eternal» heads of state and municipal companies, who’ve been at the helm for years and years, must go, insists Lithuanian President Dalia Grybauskaitė.

And, importantly, the Peasants and Greens-led ruling coalition is nodding to her proposition, arguing it is timely and will help fight corruption.

The president has come forward with legal amendments setting a limit of two five-year terms for chief executive officers of state and municipal enterprises and state-owned public and private limited-liability companies.

«In a further effort to increase the transparency of the public sector, President Dalia Grybauskaitė proposes to stop the tradition of «eternal»CEOs. The president proposes to establish limited terms of office for CEOs as an additional safeguard against corruption, nepotism and abuse of office,» Lina Antanavičienė, the President’s advisor on economic issues, said in a statement on Wednesday, January 11.

The amendments come in the wake of media reports that the state railway operator Lietuvos Geležinkeliai (LG) (Lithuanian Railways) had allotted aid to institutions linked to politicians and had been engaged in non-transparent procurement practices.

The Lithuanian railways‘ former CEOStasys Dailydka has been heading Lietuvos Geležinkeliai for a decade after serving as the chief of the company‘s Passenger Transport Board in 2002-2006. He also held a leading position in Lindra company and headed Lietuvos Avialinijos airline for five years.

«Actions of certain groups targeted directly against me affect one of Europe‘s strongest transport companies, thus damaging its image and reputation. In the current situation, I do not see a possibility to continue the work that has been started,» LG cited leaving Dailydka as saying in a press release.

The resignation followed Dailydka‘s conversation with Rokas Masiulis, the new Government‘s Minister of Transportation, who previously headed the Ministry of Energy and has earned the name of a leader with an impeccable reputation and a far-reaching vision.

Lietuvos Geležinkeliai has long been dubbed by Lithuanian media as «a bird table» for the country‘s Social Democrats. It is no secret that many SD members out of the active politics would find green pastures at the company.

LG has contributed to the party‘s electoral campaigns in the past, too.

Yet with the new state authority in Vilnius, the LG distribution of support and internal deals were subjected to a new scrutiny. Not without a yield: it turned out that Lietuvos Geležinkeliai purchased locomotive parts from Russia without any tenders.

If the head-of-the-state‘s proposal is enacted, heads of state companies, including LG, would be made more accountable to the boards and, importantly, the end would be put to ill practice of «eternal» leadership.

Explaining Grybauskaitė’s legislative initiative, the advisor argued that the President «continues» efforts aiming to make the public sector more transparent.

In her words, some of the state companies have become employment agencies for «entire kins» of (retired) high-ranking politicians and have turned into «wallets» for the political parties.

«The most vivid example of ineffective management of a state company has become Lietuvos Geležinkeliai. The practices have caused a big loss to the state and harmed the state’s reputation,» said Antanavičienė.

If the Lithuanian Parliament validates the presidential amendments on fixed five year-terms, they will go into effect from July 1, 2017.

According to data from the President’s office, the state in 2015 owned 123 companies and local authorities controlled 233 companies. The CEOs of 20 state-owned companies have been in their posts for over 20 years, some of them for as many as 30 years. Around 40 have held the jobs for more than 10 years. Forestry enterprises and road maintenance companies have the largest numbers of long-term CEOs. «Eternal» heads are especially spread among forestry enterprises, according to the President’s Office.

The heads of forestry offices in the municipalities of Anykščiai, Prienai, Šiauliai ir Telšiai have worked as their executives over 30 years and their counterparts in the Marijampolė and Radviliškis municipalities have held the office for 26 years.

Upon the law, all CEOs with the experience in the office extending over 10 years will have to leave the company within year since the law enactment.

The President also finds intolerable that a staggering number of state companies, 45, to be exact, do not pay any dividends and proceeds from their profit.

«Only eight of them have reached the set profit return mark,» the advisor noted.

Asked by BNN, Vitalijus Gailius, a Lithuanian parliamentarian and the chief of the Lithuanian legislature’s Anti-Corruption Commission, welcomed the idea of setting fixed terms for state companies’ CEOs.

«I’ve long been calling all to do that,» he suggested, adding that, though, it’s up to a discussion what limitations ought to be introduced.

«Whether it has to be the barrier of two consecutive terms or another form, I am not sure. What I know for sure that, in many cases, with some of the CEOs’ bad-management practises made public, they continue (working) as if nothing had happened. This should be a concern for all,» Gailius underscored.

Before, the Lithuanian President proposed limiting school headteachers’ terms. She has submitted amendments to the Law on Education, which, if enacted, would allow headteachers to direct the school not longer than two four-year terms.

In addition, the President s wants headteachers’s evaluation on an annual basis. If the principle does not pass the test for two consecutive years, he or she will be sacked under the law.

Jurgita Petrauskienė, Lithuania’s new Education minister has endorsed the presidential initiatives, claiming they would do «good» for Lithuanian schools.

Many of the principles across Lithuania are cronies of local mayors, who, with the expanded authorities, can appoint school headteachers directly, without the approval from the municipal Councils.

«If the head-of-state thinks that such changes are necessary, I’m not in a position to question her. My bottom point is simple: there are no irreplaceable people and the same goes for the school headteachers. Let’s admit that a new broom often is more effective than the old one,» Laimute Benetienė, the headteacher of Vladas Jurgutis secondary school in the resort town of Palanga, told BNN.


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