Draft bill 60.

Summary.

The draft bill proposes to regulate the payment of board meeting allowances, promote governance practices, and increase the accountability of the boards of decentralized institutions, state-owned and mixed-ownership companies, and state financial intermediaries in the Republic of Panama. Its obligations would apply to state-owned companies, mixed-ownership companies in which the State holds 51% of the shares, state financial intermediaries, and decentralized institutions. It excludes higher education institutions and institutions that enjoy autonomy under the Constitution of the Republic of Panama.

It defines a board meeting allowance as the stipend paid for attending meetings of a board or other collegial body. It distinguishes state-owned companies, whose shares are 100% State-owned, from mixed-ownership companies, which have State and private ownership. It includes financial oversight bodies, the National Bank of Panama (Banco Nacional de Panamá), the Savings Bank (Caja de Ahorros), the Agricultural Insurance Institute (Instituto de Seguro Agropecuario), the Agricultural Development Bank (Banco de Desarrollo Agropecuario), and the National Mortgage Bank (Banco Hipotecario Nacional) among state financial intermediaries. It defines decentralized institutions by their administrative and financial autonomy and their own assets.

For appointments assigned by law to the President of the Republic, it establishes independence, merit, integrity, and transparency as guiding principles. Appointments must avoid incompatibilities and conflicts of interest and allow officeholders to perform their duties impartially and autonomously. Selection must objectively assess candidates’ merits, competence, experience, and qualifications. Appointees must act with integrity and put the general interest ahead of personal benefit. The public administration must disclose the selection criteria and procedures, including the reasons for each appointment.

Ministers, deputy ministers, members of the National Assembly, directors, managers, and heads of State institutions serving on these boards would receive no board meeting allowance for that role. Except as provided for ministers, deputy ministers, directors, managers, and heads of State institutions, other public officials could not be appointed by the President of the Republic to more than one board. People who are not State employees also could not hold more than one position. Only public servants could serve on the boards as State representatives. Board meeting allowances could not exceed 250 balboas (B/.250.00) per month, and entities would have to request them through a detailed form submitted to the Office of the Comptroller General of the Republic (Contraloría General de la República).

Entities would also publish a quarterly report on the resources allocated to their boards on their official websites, in accordance with Law 6 of January 22, 2022. Failure to publish would result in a fine of up to the amount of the allowance received and, if repeated, could lead to removal from office; Codes of Ethics and Conduct would establish the procedures. Each entity would adopt one of those codes. The draft bill would take effect 1 year after publication. Its provisions concern the Office of the Comptroller General of the Republic and the named financial intermediaries, as well as the management of companies with State ownership and decentralized entities.